The DevOps Disruption
Simulation shows how a DevOps strategy can lead to competitive advantage.
Why invest in DevOps? Can a DevOps transformation lead to competitive advantage — or even market disruption? We sought to answer those questions by simulating DevOps transformation scenarios and comparing them to known business innovation patterns. Our key finding was that DevOps transformation can not only lead to competitive advantage, but under the right conditions, it can also create market disruption.
by Jerry Overton and Gene Kim
In other words, when we can convert our systems of innovation into systems of disruption, the value of DevOps may be far greater than we previously thought.
Simulation modeling is the basis of our latest report on DevOps. We have also published this model as an interactive Web application (csc.com/devopsmodel) for companies that would like to run their own simulations.
We simulated two business models under the same conditions — an experimental model and a control model. The simulator allows us to plug in different values for factors such as innovation, efficiency in execution, and number of potential consumers.
Long-term advantage in market competition
Efficiency in execution is based on the time it takes to get through a production cycle and how much is learned in each cycle. The shorter the cycle times, the faster that learning occurs.
Flickr’s DevOps transformation led to a 10x decrease in development cycle time. Following that example, we assume that DevOps transformation in the experimental model reduces the production cycle of a working prototype from 30 days to 3 days. The IT development benefit from DevOps is shorter development cycle times; the operations benefit is greater productivity at larger scales.
We model this in our simulation. The simulation predicts a slightly higher ROI at most levels of investment, and a stable, long-term competitive advantage.
Suppose we introduce a more innovative product into our simulation. Although the same change applies to both business models, the shift to a more innovative market disproportionately benefits the experimental model, increasing its ability to learn and produce new features.
This makes a big difference in markets more sensitive to new features. In fact, the simulations tell us that, under these conditions, a successful DevOps transformation introduces disruption — a new competitive environment where the control model cannot survive.
Creating systems of disruption
A successful DevOps transformation is expected to provide a competitive advantage. However, when it is aligned with a strategy of market innovation, we find that the result is potential market disruption. A strategy of innovation changes buyer behavior, and customers place a premium on new features. Under those conditions, companies capable of learning fast and releasing new features quickly can dominate their market.
A DevOps transformation allows an enterprise to produce features faster as the enterprise scales. When competing on innovation, new features strongly affect customer adoption. This increases the enterprise’s ability to scale and creates a virtuous cycle where the winners win more.
JERRY OVERTON is a data scientist and distinguished engineer with CSC’s ResearchNetwork.
GENE KIM is co-author of The Phoenix Project: A Novel About IT, DevOps, and Helping Your Business Win and the upcoming DevOps Cookbook.