China National Building Materials Technologies (CNBMT) is a high-tech subsidiary of China National Building Materials Group. Specializing in IT, CNBMT first stepped into the cloud computing arena at the end of 2014. Wang Qiaochen, the company’s IT Business Group VP, believes that the upstream and downstream ends of the cloud computing ecosystem will become mature when the market experiences explosive growth.
Just not mature enough
According to Wang, a mature cloud computing supply chain consists of a complementary relationship between users and the ecosystem, which is the key to stimulating enormous market growth. However, he contends that “customers lack sufficient technical understanding about cloud computing. They’re also unprepared for the changes to business models and other areas that cloud computing will bring.” Many people still view cloud computing and virtualization as interchangeable, but virtualization simply pools IT resources – it’s not nearly as flexible or agile as the cloud.
When it comes to cloud computing, especially public clouds, customers care most about data security. “Would you place your money in a safe at home or in the bank?” asks Wang. “If you have high demands for security on the public cloud, which security precautions do you take with your own home or data center? In truth, most companies would say none.” This is why he believes that users today lack a sufficient technical understanding of cloud computing.
Business models are another area where Wang decries a lack of preparedness: “The reason cloud computing has become so popular so quickly is that it revolutionizes business models. Previously users had to purchase physical IT resources to serve as fixed assets for building onsite IT infrastructure. They now simply subscribe to the IT services they need.” He feels that the choice of either a private cloud or public cloud still requires a revolution in approval and management processes compared to onsite systems. If customers don’t think it through clearly, they will have a difficult time using the cloud properly. In Wang’s words, “They’re not ready to move to a cloud service model because they are not yet mature.”
Additionally, certain issues with the technical and service guarantees delivered by cloud service vendors indicate that these enterprise types also lack maturity. An SLA is crucial for cloud services to engender trust, while a strong price-performance ratio is vital for the market to prosper.
Maturity will come from customer acceptance, providing that cloud service vendors endeavor to deliver high-quality services. In turn, customers must do their part and be proactive in providing feedback and pressure when necessary.
Opening the ecosystem up to success
Global digitalization is transforming IT systems from support systems into production systems. Moreover, mature cloud computing technology has moved IT systems toward the cloud, and defined a major new trend in corporate IT construction that influences enterprises’ core competitiveness. Individual cloud vendors cannot meet demand alone, and must learn how to build sustainable partnerships that can create an open ecosystem.
Several roles are already well-defined in the cloud computing ecosystem: IaaS and PaaS vendors such as Huawei provide cloud infrastructure or platform services. Cloud service partners serve as cloud integrators, delivering personalized services such as consulting, migration, and provision based on the offerings of different cloud IaaS and PaaS vendors. SaaS developers and SaaS vendors develop cloud-based software for different kinds of customers.
In addition to the above roles, Wang defines a new role in cloud computing: the cloud distributor. They exist to recruit, enable, and connect cloud service partners, and help traditional IT partners become cloud partners.
“Cloud computing has made everyone feel the urgent need to transform and innovate,” says Wang. “Many companies from traditional industries need to reposition themselves in the new cloud ecosystem, whereas new industries and new positionings create new requirements for skills and operating models.”
Wang aims for CNBMT to serve as a bridge for sharing cloud computing capabilities and technologies, including the ability to design and implement cloud data centers and cloud computing technologies. He foresees integrated capabilities that cross product lines based on cloud computing plans alongside the ability of users to run their own private or public clouds. Wang has identified a few preconditions for cloud distributors: “First, they need to have an excellent command of these capabilities themselves. Then they need to share them with their tier-two partners. This will empower tier-two partners to make smoother transitions [to the cloud].”
The second role is “to consolidate tier two partners’ abilities, and then jointly create solutions based on individual customers’ needs”. Although cloud vendors provide relatively standardized products and services, customers have individual needs that do not change. Cloud distributors can focus on providing standardized IaaS and PaaS service solutions for partners. Tier-two partners and independent software vendors (ISVs) can focus on the personalized demands of customers, and distributors can help them construct total solutions for customers without worrying too much about cloud infrastructure and the technical aspects of platforms.
The final role of a cloud distributor is to replicate successes in vertical industries in different regions. In the cloud era, the function of finance and logistics will not be as important as the role of traditional IT hardware distributors, and cloud distributors will strengthen service ability. Traditional distributors should invest more heavily in enabling cloud services and accumulating experience. Then, cloud distributors will help tier-two partners transform, and work with cloud vendors to increase their market share.
To develop the cloud ecosystem and garner success for all stakeholders, Wang pinpoints the nature of a true ecosystem: “Why do we call this an ecosystem instead of simply tier-one partners or tier two partners? Because they rely on each other for survival, and their net-like, non-centralized connections and relationships form an extremely complex system.” The capabilities and clients targeted by each player in the ecosystem are different, with each player holding its own resources. “From this we can conclude that the effective and flexible use of resources is a key factor in building a prosperous cloud computing ecosystem,” says Wang. “To achieve this vision, CNBMT hopes to construct a platform that cloudifies, connects, and effectively allocates the resources of partners and manufacturers.”
Transitioning services to the cloud
According to Wang, CNBMT has extensively researched digital transformation: “First, we looked at the organizational structure of human resources by establishing a cloud computing technical team,” which he says reflects the huge difference between traditional IT teams and cloud computing teams: “When CNBMT was involved in traditional distribution, technical personnel focused more on the pre-sale, sale, and post-sale of products, that is, they focused on the product itself. However, cloud computing teams focus on designing and implementing system architectures, which has higher requirements.” Due to the fact that cloud service-based sales create many new requirements on operation support systems in the background and the processes that provide traditional distribution services, Wang states that the “[Cloud computing] team uses technical measures to increase the company’s capabilities at platform operations.”
Second, he asserts that, “We must first use the cloud. CNBMT’s information system architectures are transitioning towards cloud computing in everything from design to use, and so it can use its own practical experience as a template to show to users and partners.”
In 2014 CNBMT jointly established a solutions center with Huawei, which Wang believes will help the company solidify its positioning and maintain its momentum in the cloud ecosystem. “It’s important that platform-level cross-product cloud computing solutions do not stop, as they often seem to do at the PowerPoint stage. They need to proceed to the design and implementation stages,” says Wang. “We’ll establish a sound foundation for ourselves at the center. Our client-based personalized services and solutions with partners will be based at this center.” He is confident that the center will prove to be an effective training ground for partners, display the results of collaboration to end users, and help promote partners’ solutions.
Wang recognizes that most users have questions about how to make cloud solutions viable, a fact that CNMBT will convey at the group level. He pledges to use the subsidiary’s experience to show how easy it is to go cloud, and thus encourage the group’s cloud transformation. As Wang says, “The benefits we provide with the cloud really are things of beauty.”