By Deirdre Mahon | CMO | @dbmahon
A few days back I was reading an interesting blog post shared by a colleague about what our future might look like. Fast forward a decade from now and we will find ourselves living in a world of self-driving cars where most of our work will be conducted virtually, even while commuting in that driverless vehicle!
With tech disruption and innovation running at a fast pace, companies are becoming obsolete and entire industries are undergoing disruption to the point of extinction. Consider Uber, now the largest taxi company in the world that doesn’t own any cars. The business is run by a software application which delivers a service with no paper receipts required. Similarly AirBnB, now the world’s largest “hotelier” needs no physical building asset ownership. Technology and digital networks are already making critical decisions on our behalf every day. With big data, artificial intelligence and predictive analytics, we can now diagnose healthcare solutions for patients suffering debilitating diseases. Our now seemingly antiquated insurance broker is practically disappearing because an automated “robot” can provide more accurate timely information based on unique needs.
Cloud technology services have become the big disrupter across the field of IT – the backbone of corporations around the world. What is unique about hybrid cloud is not the place from which those services are being delivered, but how users access, provision and transact or essentially pay for them. As business needs evolve, there is no longer the ability to predict specific needs quarters in advance, much less years, in order to fulfill a business group, project or application team needs. IT services are constantly in a state of flux and cloud providers must offer tremendous flexibility and price adjustments to meet those changing needs. We have witnessed exactly this with AWS and Azure pricing over the last 4-5 years. Besides the fact that there are cloud price “wars”, you don’t need to look much further than AWS’s reserved instances (RIs) which offer a range of pricing plans to accommodate ever-changing needs. Buying, selling and modifying those RI’s on a continual basis is critical so you optimize for only what you need.
Digital transformation is not just about moving to cloud’s “pay-as-you-go” services although that is certainly a major part of your digital transformation. The bigger and by far more challenging question is related to how you actually transform your business processes and get out of the data center business. Leaving behind the cycle of leasing or advance purchasing for say 3-5 years have become so yesteryear. Moving from a CAPEX model to OPEX and spreading costs across the range of business entities certainly requires a new way of thinking and systems to align with an entirely new model.
“How do I deprecate or decommission those farms of servers, storage and networking devices?” has become a prime question which needs to be figured out in order to plan around those already sunk costs. One such large enterprise has gone through this transformation over the past three years with an imminent end in sight on that journey. That company is Microsoft. Granted Microsoft has probably one of the largest IT groups on the planet and one with deeper pockets than most, but at the same time the team is challenged with deep complexity supporting global operations, a large of number of data centers, and thousands of applications which serve the business every day.
The multi-year task of transformation involved many functional teams across the business from IT to DevOps including business owners as well as finance and legal. Moving new projects to Azure services was probably the easiest part. The much harder question was how to decommission and turn-off the myriad of existing on-premise infrastructure supporting their wide range of users. The reality is that once a process and technology stack was determined, a lot of infrastructure had long since ended its natural lifecycle and the initial “turning off” of older environments became easier once teams were proactively informed.
Throughout this transformation, the quantifiable benefits started to shine through as the finance team kept a close watch. The numbers are staggering considering the magnitude of the transformation project and the % decrease in budgetary spend. Overall, by introducing processes and optimization tools into their cloud strategy, Microsoft IT was able to achieve a 38% reduction in cloud spending and an increase of over 400% CPU utilization across their infrastructure-as-a-service environment. You can learn more about Microsoft IT’s transformation in their recently published case study entitled Optimizing Resource Efficiency in Microsoft Azure. You can even see the role that Cloud Cruiser plays in optimizing Microsoft’s spend.
Transformation is never easy and no matter how large or small the initiative, it will involve multiple business functions to work in unison. It’s not just a technology challenge but one that involves core business processes, finance tracking changes, and of course management level sponsorship. It helps if there is a strong desire to make progress and create efficiencies so that you can ultimately focus on the more interesting value-add projects that drive your business. Hear our discussion about digital transformation in our on-demand webcast: Digital transformation: How IT Ops and Business Users Optimize Cloud Services.
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