The commodity days of the cloud are over. It’s time to get strategic. That’s the message of today’s leading cloud strategies, as forward-thinking CIOs are no longer turning to the public cloud to cut costs. Instead, the public cloud is viewed as an opportunity to get out of the business of managing data centers and focus on projects that are more strategic for the business.
Whether that means building a mobile app or new website to strengthen customer engagement, these shifts signal how strategic the public cloud has become for many companies. As a platform for running key business applications and services, the public cloud is a popular facilitator of digital transformations that enterprises are undertaking to boost bottom- and top-line growth.
But CIOs also view the cloud as a way to build software faster by embracing agile, devops and design-thinking philosophies. The public cloud has emerged as a catalyst for these changes, and the market reflects this, as public cloud services revenue will top US$123.2 billion this year, ballooning to US$204.5 billion by 2020, IDC says.
IT leaders recently shared with CIO.com their business drivers, experiences, and lessons learned in moving to the public cloud. They also offered some hard-earned practical advice for CIOs looking to the make a successful strategic shift to the public cloud.
Public cloud helps service company become a tech leader
Merrill Corp. is transforming its business, and the company, which provides virtual hosting spaces for sensitive corporate information such as merger and acquisition documents, is tapping Microsoft's Azure public cloud to do this. CTO Brad Smuland, who is leading the transition, says the cloud will make it possible for the service company to become a tech company.
Smuland is running about 1,700 servers in Azure and 4,500 servers in an on-premises data center, though he's porting more servers to Azure daily. Unlike peers who rushed to the cloud only to be burned by spiraling costs, Smuland says he's closely monitoring the cost of his Azure consumption. He uses a cloud cost management tool from Turbonomic that automatically shifts workloads from on-premises servers to Azure and vice versa, based on algorithms that determine which platform will cost less or perform better to complete a computing task.
Smuland says the shift has required Merrill, which employs 3,000 people across 36 locations worldwide, to re-engineer and re-architect IT systems, as well as re-skill for talent. He has had to hire and train up employees, including software engineers, cybersecurity engineers, product managers and user experience designers. These techies juggle on-premises and cloud infrastructure, oversee new cybersecurity models, and build native cloud application with microservices in a devops environment. Some existing IT staff went "willingly," though Smuland says he had to nudge other employees to make the journey, underscoring how the migration is more cultural than functional.
"We went in with our eyes wide open but it has taken more effort than I expected," Smuland says. "It was really around the skills change, the culture change and the approach. That goes to the fabric of the people and how we operate and we've had quite a lot of work there."
Smuland’s advice: While changing the IT culture and upskilling is critical, Smuland says CIOs must work with strategic partners to succeed. “But those key strategic partnerships [Microsoft and Turbonomic] are critical to the success and the speed. Without them, I wouldn’t make it,” Smuland says. “All too often my fellow CIOs feel like they have to roll their own, develop it and have that authorship.”
Public cloud keeps airline flying high
Looking for a way to facilitate collaboration with business executives and to automate software delivery, American Airlines found its answer in the cloud. The company is moving its website, mobile application and other digital services to IBM Cloud services as part of an architecture refresh and organizational shift to faster software development, according to Daniel Henry, vice president of customer technology. Henry says a key driver for choosing IBM was the technology giant’s alignment with Cloud Foundry, an open source platform-as-a-service environment American is using to develop “cloud-native” applications.
“We want to build an application in a way that allows us to increase our velocity on adding features to the website and meeting the demand of our business,” Henry says. “Creating our cloud-native apps within IBM is going to give us that opportunity.”
Henry says the company is also leveraging IBM’s “garage” methodology, which includes architectures, best practices for developing software using microservices, agile and devops. The idea is to enable American engineers to better collaborate with business executives and automate software delivery processes, ostensibly to boost the velocity of application development for employees and customers.
For American, the cloud is a trigger for cultural reinvention around how its IT team delivers software to the business. “It doesn’t require you to move to the cloud but that’s a big enough trigger for you to say, ‘Maybe we need to re-evaluate how we go about our business to make us more efficient and collaborative.’”
Although American has partnered with IBM for years, particularly using the vendor’s professional services, it didn’t get them a foot in the door on cloud, Henry says. “We did an extensive PoC [proof-of-concept] and were very excited with the results. They had to earn it and they did.”
Henry’s advice: Like Nike has said for decades: Just do it. While there is plenty of information on cloud computing to agonize over, CIOs need to stop talking about it and take the plunge. Oh, and enterprises should also be committed to reinventing themselves. “It can’t be the status quo or you won’t see the efficiencies,” Henry says. “You must be committed to knowing the outcomes will be better.”
Your family tree in a public cloud
The market for genomics data delivered as a consumer service has become increasingly competitive in recent years. To achieve an agility edge, Ancestry.com last month announced it is going "all-in" on Amazon.com's AWS service, which at $13 billion a year run-rate is easily the 800-pound gorilla of the public cloud market.
Nat Natarajan, Ancestry’s vice president of product and technology who was hired earlier this year to oversee the transition, says the company chose AWS to host billions of historical records, including family trees, and customer DNA profiles. “We're all-in because we believe that to continue to grow our business we need to improve our speed of innovation,” Natarajan says. In six months, Ancestry has moved over half of its data — 8 petabytes — to AWS, a move he says will position Ancestry for greater international growth as more consumers seek information about their ancestors.
Consuming several AWS services, including platform-as-a-service, serverless computing and other tools, Ancestry has moved 6,000 of its 12,000 server instances to the cloud and 550 databases to AWS, with a goal to move a significant portion of its consumer products to AWS by the end of 2017.
“The driver for us was really speed,” Natarajan tells CIO.com. “How quickly can we do certain things? We believe this was the fastest way for us to get there.”
Natarajan’s advice: Garnering executive support internally, recognizing that moving to the cloud is less about technology and more about operations, process and people, and appointing a dedicated leader to run point and execute best practices for the transition. "Thinking about the ops pieces, culture change and skillset change is crucial,” Natarajan says.