Reflections on a week in the cloud

We just returned from a great week in Austin, Texas after a conference that went far beyond the ordinary. eCloud Summit 2015 brought hundreds of senior tech executives from the world’s top enterprises, cloud service providers, and enabling technology companies together in Austin for two days of ideas and conversation about the move to the enterprise cloud. It is rare when so many senior people gather for such a conversation. Rarer still are the occasions when executives who could be considered competitors of each other are willing to share their thoughts on an important strategic imperative so openly. Lucky for us they did.

Maybe it was the quality of the speakers and panelists. Perhaps it was the strategic importance of the topic at hand. Or, it could have been the fact that rebuilding technology infrastructure and changing the way that organizations consume technology is really hard to do. Whatever the reason, some very bright people were willing to share in order to learn from each other, and it was a great opportunity to learn from those who are planning their path for cloud adoption, are currently on that path, or have already reached their destination.

It did not take long on the first day to recognize that there were several broad themes that would repeat themselves throughout the conference. In short, organizational changes of this magnitude can take significant time. The journey to the cloud still has numerous challenges and a future where the vast majority of enterprise computing is done in the cloud is a longer time away than a casual observer may guess. But, the potential gains are huge, and not just on the cost reduction side.

 


 

The business case is often strong and compelling but not automatic.

In his keynote conversation, Gary Reiner (Ex-CIO of GE) clearly laid out the themes of lower costs, better responsiveness, and greater flexibility as core drivers of this movement. The software-defined aspects of cloud infrastructure enable the use of much cheaper hardware and a much smarter allocation of work and consumption of resources. But the cloud also enables new and transformative business processes and better customer user experiences.

Rich Roseman (Ex-CIO of 21st Century Fox) told a story of being at the US Open and realizing that IBM was running countless systems and processes for the operations of the Open with 5 people and very little on-premise technology. That was when he decided to drive the vast majority of Fox’s infrastructure into the cloud. The results were the successful migration of 90% of 21st Century Fox’s infrastructure to the cloud, migration of 80% of the company’s global applications to SaaS, and the company running with much improved speed to market, agility, and operational efficiency.

But, despite the tempting advantages and success stories, many large organizations are taking a much slower approach to the cloud and, in fact, today only 10% of enterprise workloads are being run in the cloud. A large reason that came out in our panel discussions, as well as in Gartner Analyst Donna Scott’s presentation, was that for many applications, switching costs are just too high. And for certain apps, their usage patterns don’t need the flexibility and burst capacity that drive many of the cost advantages of the cloud. This combination of factors means that not all apps will move quickly to the cloud and many systems of record and homegrown custom apps will take years to make that move, outside of any considerations around data security.

 

Security, security, security

As Gary Reiner said, the three biggest challenges/roadblocks to cloud adoption are security, security, and security. But the challenge is not the actual level of security, rather it is that fears about security impact adoption rates. This was widely echoed across participants, especially those on the service providers panel, which included executives from CenturyLink, IBM, SunGard Availability Services, Tyler Technologies, and Verizon. The reality is that most cloud providers have more experience and greater resources devoted to security, and have a much better record at keeping data secure and free from breach, than do the average enterprise.

This reality is in conflict with the existing worldview in many organizations and is just one of the cultural barriers to greater cloud adoption. As mentioned by those on the enabling technology provider panel, which included executives from Arista, Citrix, IBM, Oracle, and Actifio, because security is so critical, it is easy for organizations to use it as an excuse for not moving to the cloud. At the end of the day, it’s the people, their mindsets, and organizational culture that need to progress in order to complete the move of substantial workloads to the cloud.

 

People, processes, and cultural mindsets

As with the adoption of most transformative technologies and business processes, change is hard for most organizations. Those recently founded consumer tech companies that use the cloud as their primary infrastructure did not have the legacy systems, existing business processes, and a workforce with legacy skills to transform. Someone on the enabling tech panel said that a new company of 1200 employees with 2 IT guys could be all in on the cloud because they started there. But change in people is hard.

This became especially clear during the enterprise panel with executives from Citigroup, Deutsche Bank, Nasdaq, Wells Fargo, Yahoo!, and the U.S. Government. Much of their advice to those early in their cloud adoption curves was to focus on shifting employees’ ways of thinking. They said people would need to change the way they work and that training them was key. Likewise, they suggested that the move would require sustained internal selling of the cloud to effect change.

In his service provider keynote, Andrew Eva of Verizon, reminded the audience that greenfield opportunities were easy, but moving legacy systems to the cloud both required and provided an opportunity to refactor business processes and ask hard questions about what was required to maintain and what could be changed. The result should be a clear set of requirements to bring to a service provider to enable that move.

Process changes require a culture that can embrace them, so it’s no accident that the closing keynote by Bill Taylor, the founder of Fast Company Magazine, focused on the nature of change and how winning organizations foster a culture that embraces change to achieve success. They do so because just offering something competitive is no longer sufficient. Only companies that stand for ideas that reshape what is possible will serve their customers the best way possible and create lasting value.

 

It’s all about the apps.

The final theme of conference was the importance of the application at the heart of all of this. At the end of the day, the infrastructure enables applications, which enable business. In his enabling technology keynote, our own Ash Ashutosh remarked that while we are witnessing the absolute commoditization of infrastructure, applications are ever more critical. Likewise, most other keynotes and panels discussed the cloud in an application-centric way – which apps to move when, which apps would gain benefits from a cloud architecture and cost structure, and which new apps could use the cloud to drive new value for the organization.

At Actifio, we know that data is the lifeblood of business and that for businesses to reap the benefits of the cloud, they will need that data to be available when, where, and however they need it. Today, data is bound to existing applications and bound to their legacy infrastructure. Ash made a compelling case that in order for enterprises to reap the full benefits of the cloud, they will need Copy Data Virtualization to free their data from specific infrastructure, and enable data lifecycle management driven by business-centric SLAs. After all we heard at this conference, our role in enabling the move of the enterprise to the cloud became even clearer.

 

Lots more to come 

Those were the broad themes of the week as I observed them. What’s clear is that 2015 will be an exciting year in the adoption of the enterprise cloud. As the conference participants continue on their adoption paths over the coming months, they will no doubt learn valuable lessons and create compelling transformation stories. I look forward to hearing all about them at next year’s conference.

Until then, we’ll continue to share the wealth of ideas and content we gathered at this year’s conference in the coming weeks on this blog.



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