Corporations today know that they must digitize their processes, personalize the customer experience, and innovate at unprecedented pace. Yet few have the technology platform to support those objectives. Hybrid cloud is emerging as the enabler of digital business.
To explore the business opportunities, we discussed hybrid cloud with David Goulden, CEO of EMC Information Infrastructure. David has 30 years of technology industry experience, and at EMC his roles have included leading new business development and worldwide customer operations, as well as serving as CFO.
Why is hybrid cloud important to enterprises today?
Hybrid cloud does a better job of important things that enterprises need to do. They need to avail themselves of applications and services in public clouds while maintaining compliance and control. They need those public cloud services to connect and exchange data with core systems of record in a private cloud or legacy infrastructure. They need to accelerate time to market of new browser and mobile-based customer-facing applications. And they need to integrate and operate the computing and communications platform without an extraordinary amount of cost, manual labor, and occasion for error.
A hybrid cloud helps enterprises innovate rapidly while still delivering enterprise-grade performance, resiliency and security. Hybrid cloud is tomorrows computing platform available today.
What forces are driving hybrid cloud adoption?
An immediate driver of many implementations is cost reduction. Both McKinsey and EMC analyses have found that enterprises moving to hybrid cloud can reduce their IT operating expense by 24%. Thats a significant number, and in essence can fund the people and process changes that yield the other benefits of hybrid cloud.
A second driver is digital business. Technology advances and information availability have altered customer expectations for good. Customers expect to be able to do what they want when they want on whatever device they want, quickly and easily and with personalized service. Companies serving them must meet those expectations with new generations of fast-changing applications.
The third is the imperative to become and remain agile. Digital business is not a one-time initiative, not just a new set of apps. Its a permanent commitment to work differently, adapt quickly, and iterate faster. Its a commitment to be technology-enabled and data-driven top-to-bottom. Such agility demands the agile platform we call hybrid cloud.
Lets take those three drivers in order and go into more detail. First on cost.
The opportunity to reduce IT operating costs is there for the taking. Where does that 24% come from? Better management yields some reductions in hardware, telecom, and facilities expense. There are bigger gains in software licenses and software maintenance as the platforms operations are integrated, simplified, and automated. Implementing hybrid cloud can be the catalyst for rationalizing your infrastructure management software and retiring whats underutilized or unnecessary.
But the biggest reduction is to the biggest line on the OPEX budget. The automation of hybrid cloud dramatically reduces the amount of labor needed to deploy new application software, and to monitor, operate, and make adjustments to the infrastructure. Tasks that used to take days are performed in minutes or seconds. By automating manual work, Hybrid Cloud creates the opportunity for dramatic IT OPEX cost reduction, and offers the opportunity to redirect those savings into newer and higher value IT initiatives.
Potential savings vary, of course, with the companys current configuration. It takes about four weeks to thoroughly assess the savings opportunity and build the business case, but that is time well spent as CIOs, CFOs, and even CEOs can reflect on the ROI opportunity of hybrid cloud. Let me introduce a caveat, however: installing hybrid cloud technology is necessary, but not sufficient, for realizing the cost reductions. IT has to operate in new waysfrom infrastructure management to apps and services delivery. Thats where the real changes take place.
Digital business is very high on enterprise agendas. Whats your take on it?
Most companies struggle to digitize their business models, but there are plenty of examples of digital business today. The Nest product isnt just a fancy thermostatits a new platform for home services. Think about self-driving carsthe major American status symbol is becoming an app. A long-established enterprise like General Electric is embracing the Internet of Things to transform how jet engines, locomotives, and wind farms are developed, serviced, and optimized.
Every business from consumer to industrial has got to express its offerings through digital technology and software. Its the only way to keep pace with customer expectations in both B2C and increasingly B2B settings. Everyone must take advantage of big data and advanced analytics to understand their markets and anticipate how to serve their customers.
Research commissioned by EMCs Information Generation program explored the capabilities enterprises most need in the digital age. They include, as youd expect, being available 24/7 and operating in real time to personalize the customer experience. They also include being able to predict new opportunities, innovate in an agile way, and seal the deal by demonstrating transparency and trust.
So where does a hybrid cloud platform fit in? It speeds time-to-market for new 3rd platform customer-facing apps while enabling them to interoperate with 2nd platform apps and data. More behind the scenes, a business cannot operate, innovate, and change at digital speed if its computing platform is manually operated. A digital business needs a lot more self-service IT, and that requires underlying automation and absolute reliability. From an IT perspective, supporting digital business is the #1 way to contribute to business growth, the #1 way to raise its business value.
Now to the agility imperative. Hasnt that always been an elusive goal?
Business agility has always been a source of advantage and therefore worth pursuing. But the stakes are higher than ever today. A digital business has got to be responsive to its customers and predictive about its marketplace. It has to make more decisions and take more actions instantly. And it has to innovate and get those innovations to market rapidly in hopes of outpacing competitors.
That requires pervasive agility. People have got to be responsive, creative, and flexible. Processes have got to be adaptable and scalable. Siloed organizational structures have to get out of the way. Management needs a digital mindset to exploit data and technology constantly. And the data and technology platform must be agile as well, able to change as fast as business opportunities and technology options change. It must be a platform for business innovation as well as operation.
Technology infrastructure has too long and too often painted businesses into corners, constraining their ability to change. But with the architectures of virtualization and the Internet and the cloud, weve learned to make things much more flexible. Hybrid cloud is an architecture and a platform designed to accommodate change. So the goal of agility becomes a lot less elusive.
What does hybrid cloud mean from the perspective of the CIO and IT organization?
Its an opportunity to reduce cost, which is always welcome. And an opportunity for ongoing efficiency and flexibility by locating and migrating workloads where they run best. But most importantly, it puts IT at the heart of the business actiondelivering 3rd platform apps, brokering cloud services, and being an enabler and catalyst for digital business. That changes ITs contribution, elevates its value, and solidifies its relevance. But again, none of that is automatic. IT really has to embrace the IT-as-a-Service model, with changes to skills, processes, objectives, and measures.
Many companies are talking about hybrid cloud, but not that many have full implementations. Whats holding them back?
Many organizations havent gotten far with hybrid cloud because they havent quite figured out what it is, what it means for their businesses, and how to build one in repeatable fashion. Our approach is to provide a fully engineered and tested solution that can be deployed quickly, either on-premises or as a managed service through our partners. So the customers are already 70% of the way to the destination at the start. They can be up and running, ready for mission-critical applications in as little as 28 days. They can focus on how to use their cloud rather than how to assemble and integrate it.
We want to help enterprises take the shortest, most direct, most aggressive path to the business benefits theyre after. So weve put an enormous amount of engineering and experience into the built-in processes, standard services, and automated management and optimization of the Federation Enterprise Hybrid Cloud. Its through these embedded capabilities and automation that the cost savings and flexibility really kick in.
Whats holding them back? The bottom line is that most enterprises simply dont realize how quickly they can implement a hybrid cloud, or how much money and capability theyre leaving on the table until they have one.
To wrap up, please summarize the business case for hybrid cloud.
First, the value proposition weve discussed should be clear. Drive digital business while lowering cost and raising agility. Hybrid cloud serves these three business imperatives simultaneously.
Second, its a hybrid world, and enterprises are already trying to assemble hybrid cloud capability. They can do it the hard waywith a lot of manual labor, extraneous technology, and incomplete resultsor they can do it the easier waywith a fully engineered hybrid cloud. I said easier because there are still big changes needed to people and processes, and to how IT operates. But all these changes are necessary if you want to build a computing platform for a digital business.
Third, hybrid cloud differs from most IT investments. Dont think of it as a bet on new technology. Rather, its a strategic investment in a better and more flexible way to operate. A CIO is responsible for making the call today on what technologies to put in place so that the business is where it needs to be in three years. Hybrid cloud dramatically expands the ability of the enterprise to change in the future and thrive in a digital marketplace. Plus, hybrid cloud lowers your operating cost and cost structure. So its a business and technology decision that pays for itself as it opens the door to future value.
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