Aug 23, 2016 by DROdio
Daniel and Ben discuss how software platforms are disrupting industries, why it’s important for executives and decision makers to be aware of it, and what they can do to compete in this new software-first world.
Here’s the Transcript:
DROdio: Hi and welcome to Armory. Let’s talk about how to dominate your industry by deploying software with speed and confidence. I’m your host today, Daniel.
Ben: And Ben.
DROdio: And let’s just jump right into it. Let’s do a little analogy here and talk about the buffalo versus the lions. If we think about these buffalo, each one of these being a Fortune 500 company, you can see they’re all running from something and fast. So what are they running from? What are they so scared about? Well, if you think about the back of the herd here, these are all Fortune 500 companies that have ceased to exist. Something kept them from being able to innovate along with their industry.
And one good example here is Borders. Let’s just talk about what Borders did. In 2001, Borders agreed to hand over its online business to Amazon under the theory that online book sales were non-strategic and unimportant, oops. This is a famous article by Marc Andreessen called Software is Eating the World, published in 2011. And he said what I think is pretty obvious to many of us today, which is that Amazon is a software company. Its core capability is its amazing software engine. So the key phrase here is that Amazon is a software company. None of these companies thought of themselves as software companies. In fact, many of the Fortune 500 companies today still don’t think of themselves as software companies.
But I’ll tell you who does think of themselves as a software company. It’s these guys. What’s happening is these software platforms are coming in and just completely disrupting entire industries. So why is that? Well, it’s because they play by a different set of rules. Airbnb doesn’t have to compete with Marriott. It doesn’t have staff. It doesn’t have maids. It doesn’t have rooms it has to turn over. All it focuses on every day is being the best software marketplace platform it can be. And it’s the same for all these other companies. Wealthfront is a robo advisor. Instacart allows you to order groceries from your phone. In our household, we hardly ever walk into stores anymore. We’re just using Instacart to order groceries because the experience is so much better.
And that’s really what it comes down to. These are the lions and these are the buffalo. And if you’re a CIO or a CTO or an engineering manager at one of these big Fortune 500 companies, you have to ask yourselves do you want to be buffalo or do you want to be lions. Do you want to dominate and just completely disrupt industries through software? Or do you want to be the ones that get disrupted?
Ben: Another example of Fortune 500 companies not being as agile as they need to be is a Black Friday example with Target. So they deployed code to their site which ended up breaking their site. And it ended up going down for some period of time. In large companies, especially e-commerce companies, this can be a very expensive problem to have – in fact, as big of a problem as a million dollars an hour for some e-commerce sites. Even having a slow deployment where the service deployed is lagging or causing latency can be millions of dollars per year in yearly sales.
What we’re showing here are the number of deployments for the low-performing companies, the mid-performing companies, and the high-performing companies. And the low-performing companies deploy code about every other month. These are the buffalo. Whereas the high-performing companies are deploying code multiple times per day. And you take a company like Amazon or Netflix. They’re actually deploying code thousands of times per day. Netflix, for example, is deploying code over 4000 times per day, and as a result, they were able to disrupt an industry. And we know what happened to Blockbuster.
DROdio: So what are a couple of the trends that make this possible? And why does this turn these companies into lions that can disrupt industries? Let’s go back to 2000. 16 years ago, the average cost to deploy a web app was really expensive, $150,000 a month [unintelligible – 04:23] on servers. Well, today, that’s all changed. It’s literally 100 times cheaper today to spool up a web application at scale using AWS, using Google GCP. These cloud platforms allow anybody, literally anybody, to deploy web applications at scale without having to do all this manual work. So before, [where – 04:45] enterprises were the only ones that could do this and could afford to do it poorly. Today it’s very inexpensive to do it in the cloud. In fact, many enterprises are trying to figure out how to move to the cloud. And you may very well be as well.
It’s even more important because of another big trend, which is mobile. There’s the great slide, Moore’s Law. All of these devices are now encapsulated in this one phone. And look at the new Pope in 2005 versus 2013, everybody has a mobile device. And this is what allows… Everyone is walking around with this basically supercomputer in their pocket. This allows a company like Instacart to be a lion, to dominate an industry by allowing the user to interact with a grocery store through the phone. These trends are only accelerating. These are not going away. If you want to be a lion, you have to figure out how to capitalize on this.
Ben: So what’s the opportunity for you? You may have already subscribed to the Agile development process. You may believe in lean startup philosophies. But you can only be as Agile. You can only be as lean as your ability to deploy quality code to your customers. It doesn’t matter how fast you’re writing code. But getting that code into your customer’s hands is what matters because when your customers see and feel your product, they can provide feedback, and they can tell you what they like, what they don’t like. That’s that critical feedback loop that your company needs to be successful.
DROdio: This is especially true on a mobile device. People are on their phones all day long. They’re interacting with software all day long. Another great example of this is the Internet [of things – 06:19]. As devices around us become smarter and run software, this trend only gets more huge and more important to you.
Ben: So what’s our solution? We’ve taken an open-source project called Spinnaker that was released last year by Netflix. Again, Netflix deploy software 4000 times per day, and they do it using Spinnaker. But Spinnaker is not built for enterprise companies. It’s built internally by Netflix, and they built it to their own specifications. For example, Netflix only uses one instance of Spinnaker. And we’ve heard from many enterprise companies that they want the ability to create multiple instances per team. They want the ability to spin up and tear down instances and manage users and roles and permissions in a secure way. So Armory has taken all of the benefits of Spinnaker, the best-in-class deployment platform, and we’ve wrapped it with enterprise-grade security, enterprise-grade functionality.
DROdio: And if you want your teams to be able to focus on creating amazing deployment pipelines to get code in front of users, you need to use armory to host a Spinnaker or manage a bulletproof, enterprise-ready Spinnaker platform for you so that your application developers and your DevOps teams can focus on turning your business into a lion instead of a buffalo.
Ben: This is what our dashboard looks like. Once you create an account, you have the ability and the power to spin up as many instances as you need. A common practice within enterprise companies is to create one Spinnaker instance per team. And then we have a way for you to provision access to different groups within your organization. So your DevOps team or your infrastructure team will likely need access across all the instances. Whereas individual members of teams – let’s say engineers, product managers, QA – will likely only have access to one or more instances.
DROdio: So we would love to talk to you about how to become a software-first company. If you’re not thinking of yourself that way, we encourage you to do so. That is what would differentiate the lions from the buffalo in these examples. The companies that win in the next decade are going to be the ones that have software at their core as a competency, and they’re not using it as some peripheral technology. You can reach us at [email protected]. Feel free to give our platform a spin at armory.io. Again, I’m Daniel.
Ben: And I’m Ben.
DROdio: And we’d love to talk to you more about it. Thanks for the time.
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