Public cloud services are in the midst of a new phase, evolving from cost-cutting technologies to enablers of business agility. More than a way to cease operating data centers, the public cloud affords CIOs the ability to focus on projects that are more strategic for the business; namely, digital transformations.
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, particularly infrastructure-as-a-service (IaaS), has emerged as a catalyst for these changes. IaaS is poised to grow 36.6% in 2017 to reach $34.7 billion of the $260.2 billion worldwide market for public cloud services, according to figures Gartner released in October.
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.
Industrial giant bets big on AWS, Azure
General Electric's move to the public cloud ratcheted up in 2014 after the industrial giant lured Chris Drumgoole from Verizon Terremark in 2014. Drumgoole, the company's CTO, said more than 90% of new apps GE builds run natively in a public cloud. "We don't deploy anything new internally anymore," said Drumgoole, who reports to CIO Jim Fowler.
GE runs internal and customer-facing applications on AWS and Microsoft Azure. But the company's commercial Predix platform, analytics software that helps companies service turbines and other industrial machines before they break down, runs in Azure. Drumgoole said GE runs apps sensitive to federal regulations in its own data centers, though he expects those to migrate to a public cloud once the regulations "catch up."
Drumgoole views hybrid cloud as a stopgap for a future where everything runs in the public cloud. "We still think the world ends in a public cloud," said Drumgoole.
Drumgoole’s biggest challenge today is deciding whether to refactor apps and move them to the cloud, put them into containers and migrate them, or let apps die and rewrite them. The stickiest questions surround niche apps that GE still needs but aren’t ready for the cloud, such as Java apps that lean on an ERP to fulfill a business function.
Public cloud helps ensure speed and agility
The public cloud is an integral part of the infrastructure fabric at MetLife, where Alex Seidita, the insurance company’s chief technology architect, uses cloud software to differentiate itself for customers and improve operations. Speed and business agility are the biggest reasons MetLife has moved to the cloud, he said. But the cloud also happens to "bring saving through automation,” Seidita said.
MetLife uses Microsoft Azure to power its microservices, including its call center capabilities and Infinity application, which customers use to store photos, documents, videos and other content. As a result, MetLife has saved 22,000 hours, reducing time to spin up and deploy new virtual machines by an average of 83%. The company also consumes IBM Softlayer to operate disaster recovery-as-a-service.
The move to Azure and Softlayer has had an ancillary benefit, as Seidita's teams have brought best practices gleaned from consuming those commercial platforms to bear on MetLife's own data centers. "We’ve been able to leverage the same kinds of capabilities internally and externally for automation, which drives speed and agility," Seidita said.
Seidita’s advice: CIOs, particularly those working in regulated industries, should seriously weigh what software services are appropriate to move to the cloud. MetLife created a “cloud-fit assessment,” in which application inventory is scrutinized to determine which apps can be moved to the cloud, and which new apps should be developed in the cloud, based on security and governance requirements the company must meet.
Drumgoole's advice: Watch vendor lock-in. Every petabyte you migrate cedes more control to your cloud provider, as you are essentially moving corporate data to a new mousetrap. Should you opt to bring that data back in, moving it will be challenging. Accordingly, GE hasn’t moved to AWS and Azure lightly. "Getting out is not an easy proposition anymore," Drumgoole said. "We think about a world where we no longer physically, tactically control our own data. Because if I'm locked into my supply chain, I'm taking away the very choice I'm trying to create."
Banking on the cloud
Bank of America has long resisted moving to public cloud services, claiming as recently as a year ago that the economics weren’t worth it and that its software-defined network (SDN) did the trick.
Yet BofA surprised industry watchers over the past few months by striking major cloud deals with both Microsoft Azure and Oracle. It’s using Azure to support application modernization, a crucial component of its digital transformation, which includes moving 200,000 employees to Office 365. And it’s consuming Oracle for its ERP and financials.
“There’s been a dramatic improvement in the ability to do virtualization securely,” Cathy Bessant, BofA’s chief operations and technology officer, told peers at the Forbes CIO Next conference in October. However, Bessant added a caveat: “You’re going to find us super cautious in the world of public, pay-for-play cloud,” noting that she is unsure whose apps are running next to BofA’s and how it might impact that bank’s application speed, security or service levels.
Even so, Bessant said that 80% of the technology workloads “that we do will be in some sort of virtualized stack,” by the end of 2019.
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, said 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 said 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 said 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 said 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 said. "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 said 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 said. “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 said 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 said. “Creating our cloud-native apps within IBM is going to give us that opportunity.”
Henry said 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 said. “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 said. “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 announced in November 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 executive vice president of product and technology who was hired earlier this year to manage the company's technology and product initiatives, said 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 said. In six months, Ancestry has moved over half of its data—eight petabytes—to AWS, a move he said 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 told 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 said.