Japan is undergoing many cultural, business and political changes simultaneously.  For a nation that once was touted as would be No.1 in national GDP, it must be very painful to see China surpassing it and getting the World’s attention.  This blog observes that the emerging theories of organizational DNA that purport to relate a company’s leadership, strategy, culture and structure to its business success might throw some light on the current Japanese business plight.  For example, disruptive innovation is currently playing a big role in reshaping the market place by Apple and Intel in mobile and cloud computing.  Once very successful, in borrowing and copying innovation, can Japan compete with China and India in the future?  Should the Japanese companies alter their DNA to change the game in the future? Can they leverage their still preserved technical organizations, R&D Labs and investment capital? After all, even if Japan is No.3, their GDP per capita still is about 10 times that of China or India.  Here are some thoughts based on my observations over past two decades.

(日本は今、文化面、経済面、そして政治面でも多くの変化に直面している。日本 は、かつてはGDP世界第一位になろうかと賞賛されもしたが、今やGDPでも中国が 日本を凌駕し、世界を席巻しつつある状況を、痛みを伴いながらも指を咥えて見 ていなければならなくなっている。

本ブログでは、ビジネスの成功と関わりが深い企業のDNA(企業におけるリーダ シップ、戦略、文化さらには構造)について考察し、日本が現在置かれたビジネ ス面での苦境を紐解く新たな理論について示していきたい。 一例を挙げると、モバイルやクラウドコンピューティングにおいて、Apple や Intelが新たな市場形態を作り出したように、今日では破壊的イノベーションが 大きな意味合いを持つようになってきている。 かつてイノベーションを模倣することで大成功を収めたように、今回も日本は、中国やインドとも競い合えるのではないだろうか? また、日本企業が自らのDNAを変革することで、近い将来、Appleのように競争形態を変化させていけるのではないだろうか?さらには、日本企業は技術指向の組織構造をこれまで維持してきたが、Intelのようにもっと積極的に研究所や投資資本を活用していけるのではないだろうか?結局のところ、日本は例え世界第三位に甘んじていても、国民一人当たりのGDPでは依然として中国やインドの10倍近くも維持しているのである。本ブログでは、日本を過去20年以上見てきた経験に基づいて、幾つかの私の考えをまとめていく)

Kabuki Theater

The famous historic theater, Tokyo Kabuki-Za which opened in 1889, closed its curtains in the end of April 2010.  It will be torn down and become a theater and office complex with direct connections to the subway station.  According to Encyclopedia Britannica, Kabuki is a “Popular Japanese entertainment that combines music, dance, and mime in highly stylized performances. The word is written using three Japanese characters — ka (“song”), bu (“dance”), and ki (“skill”). Kabuki dates from the end of the 16th century, when it developed from the nobility’s ‘no’ theatre and became the theatre of townspeople. In its early years it had a licentious reputation, its actors often being prostitutes; women and young boys were consequently forbidden to perform, and kabuki is today performed by an adult all-male cast. Its texts, unlike no texts, are easily understood by its audience. The lyrical but fast-moving and acrobatic plays, noted for their spectacular staging, elaborate costumes, and striking makeup in place of masks, are vehicles in which the actors demonstrate a wide range of skills. Kabuki employs two musical ensembles, one onstage and the other offstage. It shares much of its repertoire with Bunraku, a traditional puppet theatre.”

A. C. Scott [1] writes that the Japanese and Chinese classical dramas have many points in common, yet differ widely from each other.  “The Kabuki, like the Chinese theater, lays great stress upon the virtuosity of the actor.  He supplies the motive for the whole drama.”  The actor must play to a knowledgeable audience within the constraints of tradition but also must display individual style that takes the symbolism to go beyond imitative repetition.  While the Chinese drama emphasizes on the actors singing, Kabuki actors do not sing at all.  “The Kabuki stage is a complex affair with elaborate settings and effects which have been developed to a high pitch of artistry through the centuries.”

For a nation that is very proud of their centuries old tradition and agrarian cultural roots, the symbolism of the Kabuki-Za transition to a modern office complex is just a portrayal of the many changes that are rapidly descending on their culture, business and political landscape.

According to the World Policy Journal [2], “Japan, once considered an economic superpower and potential contender for global pre-eminence, finds itself slipping down the rankings of leading states. Although still the second largest economy in the world (at the time this article was published), it is absent from most realpolitik discussions about the global redistribution of power that is shaping the new world order, which highlight the emergence of Russia, China, and India. China’s rise in East Asia is now eclipsing the land of the rising sun, but Japan’s slippage is not all due to China’s growth. Japan’s maladies stem from three causes largely of its own making: its loss of a distinctive national identity, its international leadership deficit, and its continuing economic and political travails.”

National GDP

According to an estimate by Japan’s Cabinet Office, Japan’s second-quarter in this fiscal year, unadjusted GDP totaled $1.2883 trillion on a nominal dollar basis, against China’s second-quarter unadjusted GDP of $1.3369 trillion.  In the first six months of 2010, Japan’s GDP before seasonal adjustments totaled $2.5871 trillion, surpassing China’s $2.5325 trillion.  “People have been expecting the Chinese economy to grow at a rapid pace and become physically larger than Japan for many years, so it is not a surprise,” said Robert Feldman, chief economist at Morgan Stanley MUFG Securities in Tokyo. [3]

“The issue is whether this will be a trigger for policy changes in Japan,” he said, and he added that in the short-term, domestic political considerations were paramount as prime minister Naoto Kan struggles with a hung parliament and a potential leadership challenge from his own party.  Given the history, being surpassed by China may be not palatable but Japan still leads China in per Capita GDP by more than a factor of 10!

Table 1 shows both nominal and per capita the GDP [4] in 2009.

Japan’s GDP surpassed that of West Germany in 1968 and became the second biggest in the world, topped only by the United States. This achievement was credited to a national effort that supported the Japanese industries who established leadership in exporting automobiles, telecommunications and consumer electronics. Today, the illustrious Toyota is saddled with quality issues [5].  Fujitsu’s ambition in the 90’s to be number one in Information Technology [6] has proven to be totally elusive.  NEC’s leadership in supercomputing has all but vanished and the company is struggling today to find its niche while selling its various assets globally.  Once considered legendary, Sony’s innovation in consumer electronics has been usurped by Apple.  Nintendo’s attempt to change the game with Wii does not seem to be sustainable.  The Samurai business men (even today, there are no significant Samurai business-women) have proven to be not invincible.  What can Japanese businesses do to prevent further decay even if they cannot completely re-engineer to regain the past successes?  How can they leverage their still preserved technical organizations, R&D Labs and investment capital?  After all, Japan is still no. 3 in GDP and No 2 in Per Capita GDP among the top three GDP leaders!

The answer may lie in revisiting the tradition of renewal practiced by the Japanese at the Ise Jingu [7], ”the most sacred shrine in Japan, with great spiritual and historical significance.  One of the most amazing things about Ise Jingu is that the wooden sanctuaries are rebuilt and rededicated to the enshrined goddesses every 20 years in a process called “shikinen sengu”. This tradition began with the first rebuilding in 690, and is still being practiced. The sixty-first rebuilding was completed in 1993, with the sixty-second scheduled for 2013. Ise Jingu is actually divided into two large shrine compounds, containing over one hundred and twenty smaller shrines in addition to the two major shrines: Naiku (Inner Shrine) and Geku (Outer Shrine). The Inner shrine enshrines the sun goddess Amaterasu Omikami, who is believed to be the ancestor of the Japanese imperial family. For this reason, the Emperor visits this shrine when he assumes office, and on other important occasions. It is said to have been erected roughly 2000 years ago, and its location was chosen by the 11th Emperor of Japan, Suinin. The Outer Shrine enshrines Toyouke no Omikami, the goddess of harvest, and was erected in 478 A.D. It is customary to visit the Outer Shrine first, but if you don’t have much time on your hands a visit to the Inner Shrine is recommended.  The entrance to the Inner Shrine begins at the Uji Bridge, which passes over the sacred Isuzu River. There are two large torii gates at either end of the bridge, and it is said that by crossing the bridge one’s mind and heart are purified.  The Uji Bridge is also rebuilt in this ceremony.  What strikes visitors to Ise Jingu the most after passing through the gates is the sense of nature and life around them. The grounds are comprised of 5500 hectares of natural forest as well as young hinoki (cypress) trees, which were planted in 1926 for future harvesting. The trees tower over one passing through the grounds. Along the way to the main building in the Inner Shrine, one can wash their hands and mouth with the water from the Isuzu River at the Mitarashi. This is also done for purifications purposes.”

A Japanese friend of mine says “change or renewal from time to time itself is in the DNA of Japan. We think preservation of old things is important, at the same time, we like new and fresh things as the Ise Jingu demonstrates.  Probably, we have it in our DNA not to stick to the materials much and want to see beyond it.”

Disruptive Innovation and Japanese Business Conundrum

There are now a few theories emerging which identify an organizational DNA [8, 9, and 10] and its impact on business success.  These theories deal with how to identify the DNA and change it to meet the evolving business needs.  While each theory attempts to claim that their model identifies the patterns that have evolutionary advantage, one stands out.

According to the website of DNA Global Network Inc.,  [8] a management consulting firm in the Silicon Valley, a company’s DNA consists of four building blocks – Leadership, Strategy, Structure and Culture.  Leadership has the responsibility to define the strategy and align the structure and culture of the organization to shape the core DNA building blocks.  Evolution it seems, has defined a set of successful patterns for each building block.  Every organization either by choice or happenstance evolves by following a path where they define the core DNA that determines their success or failure.  Leadership’s ability to shape the strategy, culture and structure determines their destiny.  The right alignment of strategy, culture and structure results in creating the value to all stake holders and a sustainable organization.

Various components of the building blocks they discuss in their website are shown in Table 2.  The claim is that certain patterns formed by a combination of these components are more successful than other combinations.

Figure 1 shows my attempt to understand the relationship patterns of the key components in the three building blocks that they claim (on their website) have proven to be successful in today’s business environment:

An organization’s DNA perceived by its customers, R&D experts, Product business units and operational groups can be measured using appropriate surveys to create clear patterns.

If this is the case, using these patterns, we can examine various companies on how close they are to the winning patterns.  Notice that the strategies have to be matched with right culture and structure to gain evolutionary advantage.  For example, a control culture to create disruptive innovation may not be ideal.  On the other hand, a control culture may be just what the doctor ordered for achieving operational excellence.  Similarly, we know that a hierarchical structure works well to achieve operational excellence whereas a matrix style works well in establishing product leadership with cross-functional coordination.

It would be very interesting to analyze individual Japanese company’s DNA and identify its current state.  If we represent each component with a color green if the organization measures high, yellow if it measures medium and red when it measures low, we can depict the DNA of an organization as a pie-chart.

The pie chart on the left shows a low scale on disruptive innovation, medium on cultivation culture and Program and functional matrix characteristics required to harness disruptive innovation.  The pie chart on the right shows a market leader with a well-balanced strategy.  Similar analysis can be performed on various component relationships.

Another way of describing the DNA-print of successful strategies is shown in Figure 3:

Different organizational DNA is required to execute a different strategy and successful companies either develop these organizations within or collaborate with others who have complementary DNA to successfully compete in the market place.  Examples of successful companies with disruptive innovation as part of their core DNA are Apple and Intel.  What would be the patterns for Japanese Companies?  How are they different from other world-class companies?  Given the differences in these patterns, can one company organize itself to create different groups with ideal patterns to deliver on all four strategies?

Twenty years ago, I concluded (in a thesis submitted as JMP-17 student at JAIMS, Japan American Institute of Management Science, Hawaii and Sophia University, Tokyo) that the Japanese companies were good at incorporating innovative technologies that are borrowed from US in hardware but were not so adept in borrowing innovation in software [11 and 12].  With the advent of Chinese and Indian competition in borrowing innovation (both in hardware and software domains which was virtually absent twenty years ago) the pressure is now on to adopt disruptive innovation in both hardware and software to differentiate.  Will Japanese companies step up to this challenge or embrace mediocrity while watching China and India surpass them in borrowing and improving innovation.  The economics of communication, collaboration and commerce at the speed of light levels the playing field in product leadership, operational excellence and customer intimacy, and China and India will no longer be Japan’s customers.  They will be more Japan’s competitors to become number One; After all, there is room at the top for only one number One.  As every one starts to battle in establishing product leadership, operational excellence and customer intimacy using same technologies that get commoditized, only choice open for nations to be number one is to bring disruptive innovation to differentiate.  Time and again, evolution has proven that architectural simplification through disruptive innovation brings orders of magnitude productivity. Life forms survive and thrive by changing their DNA and adopting to external changes.  Will the differentiation in the future come from organizing yourself to excel in disruptive innovation?  What are the limits?

This is the subject of my current research and I would like any one with appropriate insights to participate.  I am interested in listening to what the Japanese business leaders today will say about these observations.  Twenty years ago, I concluded my thesis with these remarks. “The differences in approach from hardware and software are large enough at this time, that it will be difficult to gain the competitive advantage in software as in hardware. The management is well aware of this situation and will be looking in the future to rectify it. For example the new president of Fujitsu Mr. Tadashi Sekizawa (who will start his term in June 1990) has recognized the importance of software and his motto for the future is ‘Sofuto de rieki wo koujou’ (Kogyo Shinbun, 1990).”  However, history has proven that changing at least one company’s culture in Japan was not so easy and the focus of the company still remains on hardware.   The profits from software are still elusive.  May be it is time for Japanese companies to adopt the tradition of the twenty year renewal “shikinen sengu.”  Toki wa ima.


[1] A. C. Scott, “The Kabuki Theater of Japan”, The Dover Edition, Published 1999



[4] 2009 World Economic Outlook Database-October 2010, International Monetary Fund.  Accessed on October 6, 2010. (reproduced from Wikipedia)

[5] Bunraku, Toyota Quality Woes, Japanese Hardware/Software Prowess and Management Lessons

[6] Lyne, Jack. “Fujitsu PC Corp. CEO Akio Hanada: Coming to America . . .And Just about Everywhere Else” 1996,






[12] Current Issues in Japanese Management – A Second Look – “Is Japanese Software Thrust As Powerful As Their Hardware Thrust? Or Does It Really Matter Anymore?”


 The moon glows the same:

It is the drifting cloud forms

Make it seem to change.

Attributed to a Japanese Priest [1]


Hot Springs and Hadaka no Tsukiai

Most memorable part of doing business in Japan during early 1990 was engaging in a heated discussion on the future of Japanese software industry while moon gazing in a very hot rotenburo (an outdoor hot spring)  in Kusatsu, with some Japanese colleagues,  and, drinking warm sake on a cold winter night.  The discussion was about a thesis that the Japanese manufacturing prowess will catapult Japanese companies into leadership in software.  While process innovation and human network management in a factory approach has helped develop, with high efficiency, a host of software such as compilers, databases and telecommunication software where standards are well developed, Japanese management had difficulty in rapidly adopting new innovations such as object oriented programming and graphical user interfaces.  Some of my Japanese colleagues wanted to find ways to transfer software innovations faster as they did with hardware innovations. Later this would translate into Japanese foray into object databases, video service networks and service management systems with 3D graphical user interfaces and so on.

Tsuki mi (moon gazing), Onsen (hot springs) and collectivism in Japan are closely woven into the fabric of Japanese culture. According to Scott Clark [2] “Japanese have transformed what was once considered a mundane though important and pleasurable practice into an expression of Japaneseness and tradition.  The bath and bathing are today both a familiar daily practice and an act of exoticism, the transformation of the ordinary into the extraordinary in a reflexive discourse on being Japanese.”  Japanese use sake and hot springs to build individual and collective relationships.  As Kuniko Miyanaga describes [3] “In Japan, two strangers, when introduced, go and drink together as a means of investigating one another.  Using alcohol as an excuse, they become outspoken about themselves, ask questions of each other, and, in general, deviate, from normal etiquette, by “exposing their bare selves.”  This is called hadaka no tsukiai, or having a naked relationship without formality or social ornamentation.  In doing this, the two have entered into an extremely informal situation; an important social rule is that such drinking occasion remains separate from all other occasions.  The two people involved remember what has transpired during the drinking occasions, but they do not reveal this when they have returned to more formal settings.  The mutual exploration will continue on the next informal occasion, again by drinking together.  In this way, the process of building intimacy is accelerated.”

Hot springs have played an important role in Japanese business.   A hot spring hotel in Hakone called Hotel de Yama, in a picture post card setting with Mount Fuji and Lake Ashi in view from its beautiful gardens, became very famous in the year 1950 by being associated with Dr. Deming’s lecture given to almost 80% of Japanese business leaders during that period [4].  That historical event changed the course of management in Japan and the rest of the world through the Total Quality Management (TQM) movement that followed.  In the mid 1990s, when we were implementing TQM at US WEST to improve telecommunication business processes, I appreciated its far-reaching impact in shaping the culture and behavior of management itself.

De Yama Hotel

L’Hôtel donne sur le lac Ashi

The Hakone hot spring in Hotel de Yama hosted the most powerful hadaka no tsukiai of the century that changed the course of history.  According to Jerry Bowles, [5] “A more likely reason for Ichiro Ishikawa’s Deming dinner is that he wanted Japan’s new industrial leaders to hear, from this tall, loud, terrifying gaijin–a slightly derogatory word used to connote anyone who isn’t Japanese–what has been Deming’s central message for the past 60 years;  that they–management–were the problem, and that nothing would get better until they took personal responsibility for change. And on that score Deming delivered.”  Ichiro Ishikawa not only founded JUSE but also chaired Keidanren, the country’s largest trade association, which exerted great influence in post-war Japan.  Deming’s message to substitute educated human power to compensate for lack of access to raw materials was music to the Samurai business leaders attending Deming’s lecture.

An interesting email, in 2007, from Tedd Snyder from Wisconsin, [6] points out the irony of cultural changes in Japan since 1950.  He had hoped to see the actual location where Dr. Deming met with the Japanese leadership. Unfortunately, the hotel staff that he spoke with was unaware of this aspect of the hotel’s history.  Mr. Snyder was curious whether any pictures exist from Dr. Deming’s sessions at the Hotel de Yama.  I am sure the Union of Japanese Scientists and Engineers (JUSE), which organized the conference in Hakone has preserved the historical memorabilia but the significance seems to have been lost at the hot spring site.  I wonder if Deming and Ishikawa discussed the importance and the significance of that event during a hot bath. What were the discussions that followed the meeting during dinner conversations?  Whatever they were, the event had a significant impact not only on the Japanese economy but also on the rest of the world.

Current Issues in Management

The world is a different place today.  There is a debate on the role of management in both Japan and the US.  The deep and painful “Lost Decade” Japan endured and the recent Wall Street “Melt-down”, both have in common, the busted real-estate and stock bubbles resulting from management failure.  Collusion between government policy makers and big business interests, loose credit policies, lack of regulatory oversight from government bureaucrats and short term easy profit pressures from stock market gamblers have all fueled a move toward deep scrutiny of the role of free markets, managed economies, individualism, collectivism, private greed and public good.  With their cultural biases toward individualism and collectivism respectively, USA and Japan are reacting in different ways.

Japanese people reacting against the government policies, bureaucrats and status quo chose to throw the ruling government out.  The new government has promised to focus on people’s interest as opposed to the business interest. A recent article by DPJ leader Yukio Hatoyama sharply criticizes the U.S. business model for growth that Japan had emulated during the postwar period, and promises a Japan free of what he calls the “unrestrained market fundamentalism and financial capitalism, that are void of morals or moderation” to better protect the finances and livelihoods of the Japanese people.  As Japanese population is graying and the employee pool is decreasing, Japan has started to expand its borders through outsourcing. Japanese businesses are embracing outsourcing to India, China and Vietnam in very large scale.    As exports start decreasing, business focus is turning inward as opposed to global ambitions.  R&D efforts have drastically reduced which is in total contrast to the days when Japan believed in increasing R&D budgets during recession.  The mood in R&D labs, where institutional knowledge exists to meet the challenges of the new world, is very depressing unlike that which prevailed in the early 1990s.  Participation of Japanese engineers in international conferences is noticeably less compared to the 1990’s.

USA has reacted to the recent crisis by the government taking a more active role than ever before. There is also growing momentum toward retracting from large outsourcing forays and focusing on new green, healthcare and IT initiatives inside the US.  Businesses are taking minimal risk. Even the Venture Community, whose raison d’être is to focus on high potential, long-term ventures, are focusing more on short-term sure-shot revenue generating ideas. One VC in Silicon Valley pointed out that the VC community is frozen with fear focusing more on incremental less-risky solutions rather than long-term solutions with potential 10X opportunity even though they think that the idea will happen in the long term.

While the first and second largest economies are struggling with tighter resources, and figuring out better management strategies, the evolution of networking technologies from POTS (Plain Old Telephone System), Internet based PANS (Pretty Amazing New Services) [7], and SANs (Storage Area Networks) to “Computing Clouds” is presenting a unique opportunity to radically improve the next generation IT infrastructure.  It is a new technology opportunity that requires convergence of telecommunication Next Generation Network (NGN) and IT infrastructure. Such an infrastructure will fundamentally alter the way executable business workflows are globally designed, developed and distributed, and radically improve the service economies worldwide.  The scope of such transformation exceeds the TQM impact that Deming and Ishikawa facilitated at Hotel de Yama.

The purpose of my blogs, is to suggest that the Japanese management today is at crossroads, very similar to the situation when they faced Deming in 1950 in Hakone.  Today, they have the accumulated institutional knowledge that they have preserved from their forays into POTS, PANS and SANs. They are equipped with the human resources and experience to create convergent computing cloud infrastructure, which requires both NGN expertise and current IT infrastructure hardware and operating systems expertise.  For example, large companies such as Hitachi, Fujitsu and NEC have both telecommunications and IT R&D groups that they have preserved while such institutional knowledge has been dismantled in the US by free market forces.  Another advantage these companies have is their hardware, systems and  human network management expertise.  This is in contrast to US companies that are making headway in cloud computing today such as Amazon, Google and Microsoft, which are purely software companies.  History shows that networking technologies evolve with a combination of hardware and software technologies making tradeoffs to meet the requirements of massive scaling and global interoperability.  My analysis suggests that a paradigm shift with 10X improvement can be achieved with slight modifications to server and storage devices to replace the current system administration model with real-time dynamic device management.  With these modifications along with NGN switching and mediation concepts, the computing clouds will be able to provide massive scaling, global interoperability and telecom grade “trust”.

However, the cultural, political, and economic changes that have occurred since the days of Deming and Ishikawa are profound and I would like to pose the question “Is current Japanese management up to the challenge?”  Will they be able to break the organizational barriers between telecommunications, server, network and storage silos within the same company and develop the convergent architecture?  They failed to do so in the past in bringing their telecommunications and computer divisions to work together and successfully compete with Cisco’s foray into the telecommunication-grade router market.  Will Fujitsu, Hitachi and NEC be able to collaborate with each other and service providers such as NTT to create the required mediation and management interface standards for the convergent Computing Clouds?  Will the Kasumi ga Seki cloud project provide a good opportunity to create and test the ideas of convergence.  This is the theme of my study, as a sequel to my thesis published in 1990 on current issues in Japanese management. I am looking for input, comments, and collaboration. I invite anyone with appropriate insight to participate.

In order to understand the requirements to make a profound change beyond the current incremental approaches of the Silicon Valley VCs and established server, networking and storage vendors with their vested stakes in the status quo, we need to examine the history and the evolution of networking technologies.  We also must acknowledge the economic and political realities that drive management behavior.  As Deming and Ishikawa, demonstrated, true leadership that causes paradigm shifts and enables global transformation by decreasing global entropy, usually transcends the political and economic realities and identifies true value for all the participants they rally to their cause.

From POTS, PANS and SANs to Computing Clouds – Current Issues in Information Technologies Management

POTS, PANS and SANs provide a fascinating study of the power of networking, scales of economies and the impact of global interoperability and massive scaling.  The evolution of switching, transmission and access technologies associated with POTS, PANS and SANs, the politics of their penetration and global impact on the economies of nations have taken different routes but with equally profound economic consequences.  POTS altered the communication landscape by connecting billions of humans anywhere any time at a reasonable cost.  It provided the necessary managed infrastructure to create the voice service, deliver it on demand and assure the connection to meet varying workloads and individual preferences with high availability, optimal performance and end-to-end connection security.  The service assurance set a standard known as “telecom grade trust”.

The Internet enabled the connection of billions of computing devices using the Internet Protocol (IP) network and enabled PANS that support today not only businesses but also a large consumer segment through the World Wide Web.  The growth of e-commerce and social networks are a direct consequence of this evolution with global impact.

The resulting explosion of data put a strain on the Information Technology (IT) infrastructure and the management of petabytes of data required a networked shared storage strategy that was addressed by the storage networking introducing custom hardware and software technologies.

With the advent of multi-CPU, multi-Core servers and server virtualization technologies, a new networking architecture called computing cloud is evolving that allows shared CPU, memory, IO, bandwidth and storage via the Internet or the Intranet to create and deliver services on a massive scale.  Virtual servers allow computing and storage resources made available to service developers for developing and delivering business and consumer applications to their customers using the computing clouds.  The computing cloud technologies are just evolving with several benefits already demonstrated but also many enhancements that are still lacking to make them massively scalable and globally interoperable with telecom grade trust [8].

Telecom grade trust today is the result of a long history of evolution of technologies and processes starting with AT&T.

According to AT&T [9], during 1894 to 1904, over six thousand independent telephone companies went into business in the United States, and the number of telephones boomed from 285,000 to 3,317,000. Many previously unwired areas got their first telephone service, and many others got competing companies. However, the multiplicity of telephone companies produced a new set of problems — there was no interconnection, subscribers to different telephone companies could not call each other. This situation only began to be resolved after 1913.  Theodore Vail in 1907 the then President of AT&T believed “that the telephone by the nature of its technology would operate most efficiently as a monopoly providing universal service. Vail wrote in that year’s AT&T Annual Report that government regulation, “provided it is independent, intelligent, considerate, thorough, and just,” was an appropriate and acceptable substitute for the competitive marketplace.”

From those monopolistic beginnings of AT&T to its remaking into today’s at&t through cycles of regulation and deregulation (accelerated by down-right fraud from its competitors such as MCI Worldcom), much has changed, but two things that have remained constant, are the universal service (access on a global scale) and the telecom grade “trust” (providing reliable, secure and high performance connection at a reasonable cost) that are taken for granted.

The Internet on the other hand evolved to connect billions of computers together anywhere, anytime from the prophetic statement made by J.C.R. Licklider [10] “A network of such [computers], connected to one another by wide-band communication lines [which provided] the functions of present-day libraries together with anticipated advances in information storage and retrieval and [other] symbiotic functions.”.  Starting with three computers connected in 1969, the network grew to 213 by 1981.  The IETF was formed in 1985 and used the Request for Comments (RFC) process to develop and promote the standards that drove the growth of the Internet transforming the “send and pray” network to become reliable, secure and high performance network.  However, government support from DARPA and the telecommunication Act of 1996 played key roles again in nurturing and fostering innovation.

Storage networking and resulting NAS and SAN technologies have changed the dynamics of the enterprise IT infrastructure in a significant way to meet business application needs but were not able to meet the cost constraints dictated by the mass services market.  Wild fluctuations in the workloads make it impossible to provision for meeting peak-load requirements cost effectively.  This created a new class of service providers such as Amazon, Google and Microsoft to abandon the expensive and management intensive SAN strategy to develop an alternative storage strategy using commercially off the shelf (COTS) hardware and distributed web based service oriented software architectures.  The resulting divergence between IT infrastructure supporting Internet based consumer services such as social networking, email and video streaming applications and mission critical business applications requiring high performance and low latency tolerance is currently providing a new opportunity to reexamine the economics of IT management.  The divergence between the mass-market service infrastructure and traditional business application infrastructure took a wider turn with the introduction of server virtualization that allowed dynamic server provisioning, application migration, dialup, and dial down of application performance to meet wildly fluctuating workloads.

cloud evolution

Figure 1 shows the two divergent paths.  While the business application infrastructure (shown in the left) provides visibility into application availability, performance and security, the control is still labor and knowledge intensive.  The human latency in diagnosing and addressing application specific workload variations and varying business priorities often cost hundreds of thousands of dollars in software and service costs [11].  The silo approach the vendors provide is often called the Viagra approach with point solutions propping up old rickety systems that are not meeting the application centric management requirements demanded for mass scale deployment. Many of the software management tools end up as shelf-ware and service consultants swarm customer data centers to provide measurement, correlation, diagnosis and implementation services to optimize resource allocation to applications and address any contention issues with shared resources.  Often, best practices provided by server, network and storage vendors only optimize resources within their Silos.  These solutions often conflict with end-to-end optimization goals and business priorities that are different for different applications.  Diagnosis becomes even more complex (thus increasing the human latency) with virtualization layer in the server and virtualization in the storage to mask heterogeneous management systems and vendor devices.  While the Viagra approach provides recurring service revenues for equipment, software and service vendors and allows them to sell point solution software, it also increases the cost of visibility and control for the data center operators.  The Return on Investment (ROI) and Total Cost of Ownership (TCO) calculations the vendors demonstrate using their calculators often, drive local optimization in their silos while resulting in end-to-end optimization cost increases.

In addition, the server virtualization introduced to take advantage of multi CPU and multi Core servers to reap the benefits of energy conservation and better utilization with consolidation, adds another layer of I/O virtualization that neutralizes all the optimization strategies that expensive SAN storage vendors provide.

For these reasons, the new cloud providers have opted for cheaper Commercially Off-The-Shelf (COTS) hardware coupled with software approaches for simpler databases that are distributed, and service oriented software development environments for creating web based service applications.  However, while this approach reduces the management complexity, it does not address the visibility and control required to manage shared resource environments with telecom grade trust.  Application specific availability, performance and security management are wanting and piece meal solutions are being attempted which will again lead to similar issues with increase in complexity.

Recent announcement of virtual private clouds by Amazon is a first step in the right direction by allowing secured access to their virtual resources and infrastructure.  However, it addresses only access issue to hosted virtual servers.  For a computing cloud to go beyond being a pool of hosted virtual servers, and provide telecom grade trust at application or service level, it must address end-to-end connection management of computing resources from the CPU to the spindle.  While virtual servers have provided consolidation, flexibility, mobility, performance management and Disaster Recovery (by instantly replicating virtual servers) taking advantage of the new multi-CPU and multi-core physical servers, it has:

  1. Reduced visibility within a virtual server, through layers of virtualization increasing indirection between logical and physical resources,
  2. No control of application to spindle resources (dial-up or dial-down resources on demand) within each virtual server at run time to address changing workloads and business priorities, and,
  3. Increased cost and latency of diagnosing and resolving shared resource conflicts between multiple virtual servers

One question is which vendor cloud approach and lock-in is preferred?   As pointed out by Tim Bray [12],

“The small problem is that we haven’t quite figured out the architectural sweet spot for cloud platforms. Is it Amazon’s EC2/S3 ―Naked virtual white box‖ model? Is it a Platform-as-a-service flavor like Google App Engine? We just don’t know yet; stay tuned.”

Virtual server sprawl and their management have become more complex than physical server farm management. No cloud vendor has addressed virtual server sprawl management by providing visibility and control to assure telecom grade trust to both service development and service delivery.  Three factors raise two important questions:

  1. The inability, today, to easily dial-in or dial-out a virtual server from one cloud to another with telecom grade trust,
  2. The inability to dial-up or dial-down resources used by a single virtual server at run-time based on workloads, and
  3. The lack of visibility and control to resolve contention between shared resources dynamically, among many virtual servers, based on business priorities.

When management issues are accounted for, is the cloud (whether private or public) using current virtualization technology that depends on a whole virtual server replication and or migration, cost effective?  Are there better alternatives?

Paradigm Shift to Eliminate Waste in Information Technologies Management

While current state of the art has not yet assured confidence with telecom grade trust, if approached correctly, I believe that computing clouds present the last frontier in information technology revolution that will reduce complexity, provide global interoperability and telecom grade trust to networked computing resources.  Based on POTS, PANS and SAN experience, it is easy to see that reducing waste and providing telecom grade trust for accessing computing resources globally will have profound economic consequences.

The key to a paradigm shift is to recognize that the current administration and management paradigm that originated with server architecture is static and assumes that the resources (CPU, memory, bandwidth, storage capacity, throughput and IOPs) are allocated to an application at install time.  Changes to workloads and business priorities are assumed to occur at longer time scales, and administration can be performed off line.  This assumed that there were maintenance and administration times that are scheduled and the services the application provides can be interrupted during this period.

With high-speed networks and global connectivity, this assumption broke down and many management systems were added on to improve, the availability, performance and security as shown in the left side of figure 1.  However, the cost and flexibility required for mass scale deployment of services with wildly fluctuating workloads and business priorities has created the alternative computing cloud architecture on the right side of figure 1.

However, even the cloud architecture shown in figure 1 (on the right hand side), still assumes a static administration paradigm and still requires virtual servers to be provisioned at install time.  Configuration cannot be dynamically changed based on changing application workload profiles or business priorities at run time.  This makes application specific performance management, and storage administration very cumbersome, labor and knowledge intensive.  For example, when there is resource contention, one cannot stop one low priority application and divert its resources to another application with a higher business priority without disruption.  The complexity compounds when you have clustered servers (virtual or physical) with redundant paths to clustered storage devices.

Opportunity for New Approach to Develop Computing Clouds

Deming and Ishikawa taught us that removing waste and implementing far-reaching changes in an organization requires management collaboration that transcends organizational and geographical boundaries.

Return on investment must address not only the impact on share holders but also on impact on employment, customer intimacy and loyalty, impact on the ecosystem of suppliers, generation of tax revenues that facilitate better social fabric with national and global harmony and reduce entropy  through waste elimination.  The Japanese management understood this message very well when they started implementing TQM on a national level and global level.  Their emphasis on harmony (Wa),  Kyozon Kyoei (growing together) and their long term focus helped them become the second largest economy.

It is also interesting to note the contrast between 1950 and 2010.

In 1950, educated human resources were suggested to compensate for lack of access to raw materials at that time.  In 2010, the human resources are at a premium (especially in Japan caused by aging population and low birth rate) and it makes economic sense to eliminate IT management latency through automation that goes beyond incremental approach.  By creating the next generation server, network and storage infrastructure with dynamic resource control, the need for massive outsourcing is eliminated while creating a new paradigm for next generation computing clouds that will radically transform the services economy worldwide.

This will be analogous to Strowger’s switch eliminating many operators sitting in long rows plugging countless jacks  into countless plugs and reducing the cost of adding new subscribers that had risen in a geometric proportion. According to the Bell System chronicles, one large city general manager of a telephone company at that time wrote that he could see the day coming soon when he would go broke merely by adding a few more subscribers [13].  The only difference between today’s IT data center and central office before Strowger’s switch is that “fewer, but very expensive consultants, countless hardware appliances, and countless software systems that manage them” replace “many operators, countless plugs and countless jacks”.  In addition, we have to account for the shelf-ware and the human latency involved.

More recently, in a speech at the NASA Ames Research Center in California, federal CIO Vivek Kundra said that the government cannot continue to invest in traditional data centers to support its IT needs, citing a doubling in the energy cost at federal data centers between 2000 and 2006.  Of the $76 billion the government spends annually on IT, $19 billion he said goes toward infrastructure maintenance.

Both US and Japanese governments recognize the problem and are sincerely looking for solutions.

The question is  whether today’s Japanese corporate management and Silicon Valley VCs are ready to mobilize and remove waste and replace over-provisioning of resources with on-demand provisioning in current IT infrastructure with innovative solutions or continue their incremental approaches? Can they create next generation servers & storage to implement telecom grade trust through computing clouds with 10X improvement?  Who is the next Ishikawa with a vision to transform Japanese business in the time of need?  Will the changing political clouds in Japan nurture the seeds of innovation or will it take the planned economy such as China to drive the next wave of innovation?  Or will the Silicon Valley VCs beat them?  Is this an opportunity for a collaboration between individualism and collectivism to establish a balance  between corporate greed and public good, vendor-lock-in and choice fatigue with too many options, and unbridled free markets and fully regulated monopolies?  Did the Japanese management have a better working model with their collective approach before they followed American capitalism “that is void of morals or moderation” as Hatoyama put it?  Would the computing cloud also by the nature of its technology, operate most efficiently as a monopoly providing universal service with telecom grade trust, under government regulation, as Theodore Vail put it, “provided it is independent, intelligent, considerate, thorough, and just?”.  Who will lead the effort to tame the last frontier of computing clouds in Information Technologies by taking the risk and fighting current monopolies?  Is it the Silicon Valley VCs, Japanese Samurai business leaders or emerging technocrats in China?

Having participated in the POTS, PANS and SAN revolutions both in US and in Japan, I am keenly interested in watching how the current cloud revolution will play out.  One sure thing is that it takes a revolution – not an evolution to implement the productivity improvements that are possible and are absolutely essential.  If history is any guide, AT&T resisted digital switching and fiber optics revolutions and lost its technical leadership.  Japanese companies resisted IP networks preferring ATM (Asynchronous Transfer Mode) switches and missed leadership in Voice over IP revolution.  COBOL programmers resisted Object Oriented Languages which eventually led them to their extinction.  SAN franchises will resist commoditization of storage.   Server vendors will resist modifications to current virtualization strategy claiming that unified computing has arrived in bundled server, network and storage blades supporting pools of virtual servers with virtual I/O without addressing the management complexity issue.  Browser vendors will lead you to believe that the browser is the true distributed cloud operating system, Silicon Valley VCs will fund its research & development and Wall Street pundits will confirm it on Cable shows.

It will take another Deming and Ishikawa to convince management to go beyond their current franchises to harness the synergy of POTS, PANS and NGN and make real progress to reduce the true cost of IT management and reduce the entropy of the universe.  This means replacing current form of management intensive SANs and creating next generation servers and storage devices with dynamic FCAPS management and real time mediation.  This means creating real network centric distributed computing architectures and operating systems.  This means simplifying current management stacks by eliminating them.  This means creating new self discovering, self configuring, self monitoring, self healing and self optimizing distributed software systems replacing current high maintenance architectures that assume static resource administration patched with a string of evolutionary management systems.

I have spoken to data center managers who will discard their current SAN infrastructure if they had a better alternative in a wink.  In fact some have already started their transition plans:

“I don’t care who provides my infrastructure …even for my mission critical applications as long as I have visibility into the cloud and have control of my application response time, I/O, throughput, availability, latency and security…and I have the ability to adjust it based on my business priority and changing workloads”  – This quote is from an IT Business Alignment  Manager at a Large Energy Company who is actively re-architecting their datacenter to move away from their current storage strategy.  This is a strong invitation to create next generation computing clouds with telecom grade trust with visibility and control by next generation service providers.  This is a strong invitation to next generation infrastructure providers to commoditize servers and storage with network intelligence and real-time FCAPS management.  This requires expertise in not only Information Technologies but also POTS, PANS and NGN.

Will No 1 and No 2 leading economies recognize the strategic imperative and act as they did when Deming pointed out that the management was the problem or will they freeze with fear and watch, and wait to outsource their IT infrastructure as new players emerge after the current recession to take leadership, and run with it?  Only time will tell.  In the meanwhile, the moon will glow the same while giving the illusion of change through drifting cloud forms to the hot spring lovers practicing tsuki mi and hadaka no tsukiai.

Plus Ça Change, Plus C’est la Même Chose!

 References Used:

[1] James David Andrews, “Full Moon Is Rising”, p32

[2] Scott Clark. “The Japanese Bath: Extraordinary Ordinary”, Re-Made in Japan – Everyday Life and Consumer Taste in a Changing Society, Edited and with an introduction by Joseph J. Tobin, Yale University Press, 1994

[3] Kuniko Miyanaga, “The creative edge: emerging individualism in Japan”,


[5] Jerry Bowles, “obituary/tribute to W. Edwards Deming”, The Quality Executive, a monthly newsletter. January 1994


[7] Originally coined by Negroponte from MIT Media Lab “Pretty Amazing New Services are discussed in a book by Jean-Jacques Laffont, Jean Tirole, “Competition in Telecommunications”, MIT Press, 2001



[10]  J. C. R. Licklider (1960). Man-Computer Symbiosis.

[11] One company is offering a Health Check Service that will cost $25,000 to $50,000. It also plans to offer a product next quarter that will cost around $400 a switch port, plus the number of links being monitored.


[13] Almon B. Strowger and His Electric Telephone Switch

[a]Fault, Configuration, Accounting, Performance and Security management known as FCAPS has played a big role in reducing the Total Cost of Ownership and build Telecom grade “trust” in telephony.
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“First snow
on the half-finished bridge.”

– Haiku by Matsuo Basho

Photo:  Path to an open air Hot Spring bath (Rotenburo)


Snow plays a very important role in Japanese life.  People romanticize snow and雪国, yukiguni or snow country in enka singing. “Yuki mi” or snow watching, gives an excuse to drink sake and ponder about the impermanence of everything and nothing. The hexagonal shape of the body and roof of yukimi lantern is designed to capture the snow on its roof, and instill a sense of purity and serenity to the viewer. The Sapporo Snow Festival, one of Japan’s largest winter events, attracts about two million people to Sapporo to see the hundreds of beautiful snow statues and ice sculptures which line Odori Park, the grounds at Satoland, and the main street in Susukino.  For seven days in February, these statues and sculptures (both large and small) turn Sapporo into a winter dreamland of crystal-like ice and white snow. Yasunari Kawabata’s “Snow Country”, captures the Japanese “kokoro” in a novel that won the Nobel Prize.

Japanese snow also features in a trade controversy as the following excerpt states:“The oldest forms of barriers are tariffs (taxes or “duties” on imports) and non-tariff barriers, such as quotas (quantitative restrictions), both of which are imposed at the border.  Other less visible trade barriers include more indirect, inside-the-border practices such as official acceptance of collusion among domestic businesses, distribution systems that discriminate against foreigners, and restrictive government procurement practices.  One of the most notorious instances of unduly restrictive safety and health standards was the onerous set of technical specifications that Japan imposed on imported skis in the 1980s on the grounds that Japanese snow was different from that of other countries.” [1].“Japanese snow” since has become a euphemism for “collusion politics” and “crony-capitalism” that have been associated with Japanese business especially during the peak of Japanese success globally.  Often, western vendors complained that their products had to be validated to meet unreasonable demands that stem more from low risk tolerance of Japanese management or high reluctance to embrace anything that they are not used to.

Collectivism and the need to bring a whole group of people together who have disparate vested interests to agree upon any action, creates a natural barrier to innovative approaches, technologies and ideas from outside. Even within a company, “groups” exist and “soto and uchi” play a very important role on how decisions are made.  The telecommunication division views computer division as “soto”.  Domestic market division looks at the global market division as “soto”.  In reality, the collectivism is practiced as a hierarchy of groups who cooperate within the group but fiercely compete with outside groups.   At any level of the hierarchy, the subgroups are loyal to the main group but fiercely compete with outside groups even within the same company.  This is one of the reasons why the institutional knowledge dispersed in different subgroups of a company becomes ineffective in delivering synergy.  This also explains why every Japanese technology company that has communications, chip and computer expertise, has not been able to leverage the synergy to successfully develop convergent technologies inside Japan.  Ironically, in the US Silicon Valley, where individualism reigns supreme, companies collaborate with each other to harness complimentary expertise to create synergy in the products they develop.

History shows the uniqueness claim has been a double edged sword.  While it may have protected some interests in the short run, in the long run, it has isolated Japanese technology from global markets and also prevented efficiencies that stem from innovation to permeate in the Japanese fabric faster.  Example of the effect of “uniqueness” is the recent turmoil in Japanese mobile manufacturing sector.  By embracing their own unique way of implementing the mobile communications, they have missed out on global expansion and are now trying desperately to catch up on Iphone revolution. Is recent withdrawal of Japanese manufacturers from mobile phone business when Iphone is creating a record in growth a direct result of Japanese uniqueness play?

In my update of the “current issues in Japanese Management”, I am investigating how the current generation of Japanese leaders embraces innovation. I am especially interested in how the current generation is approaching IT management and what the west claims to be the “next big thing” called Cloud Computing.  Japan’s Ministry of Internal Affairs and Communications, plans to build a massive cloud computing infrastructure to support all of the government’s IT systems. The Kasumi ga seki (literally means the fort of fog) Cloud, named after a Tokyo district where the IT infrastructure will be housed, will be built in stages from now until 2015. The goal of the project is to consolidate all government IT systems into a single cloud infrastructure to improve operation efficiency and reduce cost.  The major components of IT operation costs are:

  1. Computing equipment,
  2. Communications equipment,
  3. IT operations management software and
  4. Processes and People who support IT

While the equipment costs have gone down dramatically over the last two decades, the software and people costs have not.  Ironically, while their hardware revenues draw fewer margins, the vendors who sell computing and storage devices have looked to increase their revenues and profits through selling software management systems and service offerings often at exorbitant rates in the form of systems engineers, process consultants and health check experts. Unless, the escalating software (often called shelf-ware because it is not very useful and gets stored on a shelf) and services costs are brought under control through new innovation similar to what happened with telecommunications network and service management automation, consolidation of IT in Kasumi ga seki only moves the problem from many places where it exists today to one place by 2015.

True cloud computing productivity improvements will only come from innovation in hardware and operating systems that allows application software to dynamically adjust its computing, network and storage resources to meet changing workloads and business priorities, software that is self configuring, self healing, self managing and self optimizing and processes that totally eliminate human latency involved in troubleshooting and diagnosis.  More self-serving vendor driven management systems (suggesting to put other vendor products behind their’s) and processes without a fundamental architectural transformation will not lead to drastic productivity improvement. If the Japanese management is not ready for such innovation, the kasumi ga seki cloud will be only a half-finished bridge before the first fall of snow.

I am looking for input, comments and collaboration and invite anyone with appropriate insight to participate in my research.

[1] Stephen D. Cohen, Robert A. Blecker, Peter D. Whitney, “Fundamentals of U.S. foreign trade policy: Economics, Politics, Laws and Issues”, Westview Press, 2003 Edition 2, p96

According to Geert Hostede, “Individualism is on the one side versus its opposite, collectivism, that is the degree to which individuals are integrated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty. The word ‘collectivism’ in this sense has no political meaning: it refers to the group, not to the state. Again, the issue addressed by this dimension is an extremely fundamental one, regarding all societies in the world.”

Figure 1 shows the Individualism Index for Japan, Germany and USA [1].

Individualism Index

Individualism Index

In my study of Japanese management twenty years ago, I found many arguments about how individualism and collectivism play key roles in business success.  One argument from Professor Robert Ballon of Sophia University struck me as very interesting.  His thesis is that the social characteristics of a group are related to the resource availability for the group.  If the resources are abundant, system allows individualism and also tolerates resulting duplication and resource wastage.  However, as the resources become scarcer, the group members tend to collaborate with each other to optimize available resources to meet the common goals for survival.  Even if the group starts with competition resulting in violence, eventually they learn that collaboration is a better way to assure the survival of the group as a whole.  This is especially true if the group coexists over a long period of time.  Business success depends on a balance of individualism and collectivism.  100% collectivism tends to foster tribalism and kills innovation thus reducing opportunities for business success.  100% individualism fosters cream skimming, greed, looting and eventual wastage of resources.

The quest for total resource optimization often leads to tradeoff of time against space and collectivism against individualism.  For example, in the days when global connectivity was limited, Japanese management evolved to optimize space that was a scarce resource and organized themselves to put the “group” first.  However, as the global connectivity broadened, people started to become more individualistic.  For example, playing golf in Japan is a very expensive proposition, but today, a Japanese business person can fly to Hawaii and play golf at a cheaper price.  Just-in-time inventory optimizes shelf-space.  However, it requires broadband transport to meet latency tolerance limits of consumers.

There are many theories on whether more dominant collective nature of Japanese management is conducive for success in global business in general and software business in particular which I discussed in my thesis.  However, more interesting aspect of collectivism is its ability to form human networks (humans networking as groups collaborating to achieve common objectives).  The human networks are considered intelligent because they accomplish their goals in multiple ways using information collected from the external world and using it to control it.  The human network consists of a group of individuals operating as a system [2]:

  1. Every system has a purpose within a larger system
  2. All of a system’s parts must be present for the system to carry out its purpose optimally
  3. A system’s parts must be arranged in a specific way for the system to carry out its purpose (separation of concerns)
  4. Systems change in response to feedback (collect information, analyze information and control environment using specialized resources)
  5. Systems maintain their stability (in accomplishing their purpose) by making adjustments based on feedback

According to Vancho Cirovski, [3], the effectiveness of the human network depends on the connections, communication and mastery (or specialization) of the individual human object.  Better the quality of mastery of the individual node, the quality of connection and communication, higher the effectiveness.  Human networks provide a perfect working model for distributed computing.  Malone [4] describes the distributed computing model:

  1. Organization consists of connected “agents” accomplishing results that are better than if they were not connected.
  2. An organization establishes goals, segments the goals into separate activities to be performed by different agents, and
  3. Connect different agents and activities to accomplish the overall goals.

Scalability is accomplished through hierarchical segmentation of activities and specialization. There is always a balance between the cost of coordination of the agents and economies of scale obtained from increasing the network size which defines the nature of the connected network.  Efficiency of the organization is achieved through specialization and segmentation.  On the other hand agility of an organization depends on how fast the organization can respond to changes required to accomplish the goals by reconfiguring the network.

Both efficiency and agility are achieved through a management framework that addresses Fault, Configuration, Accounting (utilization), Performance and Security (FCAPS) of all network elements (in this case the agents).  Project management is a specific example where Fault, configuration, accounting, performance and security are individually managed to provide an optimal network configuration with a coordinated work-flow.  Functional organizations, and hierarchical and matrix organizational structures are all designed to improve the efficiency and agility of an organization to accomplish the goals using both FCAPS management and signaling based arbitration of resources depending on system priorities and workload variations.

What does this have to do with Software, Computing Clouds, and Japanese Management?  Software is the electronically encapsulated human knowledge captured as workflows in executable form.  Therefore, the ability to rapidly develop software or translate domain knowledge into machine executable form is crucial to developing a competitive edge. Current efforts in developing manufacturing systems, banking systems, insurance systems, healthcare systems, and financial systems are just such efforts to translate the specific domain knowledge into executable form, establish interfaces to real world to synchronize the information and execute automated control.  To cope with the rapid increase of the velocity of information, we are depending more and more on complex software systems to manage information in many of these domains.  There are many implementations of the distributed computing model discussed above in developing workflow automation:

  1. Telecommunications network service creation, delivery and assurance
  2. The IP network and infrastructure management
  3. Transportation networks
  4. Power grid management etc.

All these implementations make use of distributed computing model to manage distributed shared resources to optimize the overall system availability, performance, security and utilization.

Computing clouds are emerging as vehicles to share distributed virtualized computing, network and storage resources to implement business workflows. Computing clouds in order to be massively scalable and globally interoperable must support dynamism and end-to-end connection FCAPS management.  Such management demands implementing distributed computing models that are as good as the human networking model.  Will the Japanese management that has successfully implemented distributed computing model in human networks, telecommunication system, be able to build reliable, scalable, secure and dynamically reconfigurable Computing clouds? This is the topic of my research and I invite anyone with appropriate insight to participate in an update to my thesis of almost twenty years ago.



[3] “Managing the Connected Organization” by Valdis E. Krebs