The Business Case For Cloud Computing with Kevin Jackson

Episode 184 · 29:40 · SRT · archive.org · all Tanzu Talk

All right. Welcome back, folks, for another episode of Tanzu Talk. My guest today is Kevin Jackson, who's the CEO of CG GlobalNet, but also for the topic of this episode, he recently authored a book, Click to Transform. Kevin, can you please give us a quick introduction? Yeah, hello. Thank you very much, Dominic, for having me on. So, yes, I'm the CEO of GC GlobalNet, and what we do is we actually help both government and commercial companies in their digital transformation journey. So, that was really the purpose of the book, because training, education, and understanding your destination is always the most important aspect of any journey. So, that kind of gets to my first question, actually, which is really to understand, because the book is very broad and comprehensive on a lot of different aspects of cloud computing and 5G network transition. And so, my question to you is first to understand, who was the book for? Like, what's the intended audience that you had in mind for this book? So, to be honest, it was two audiences. The actual business decision maker, who was focused on their key performance indicators and ROIs and all of the important things that make a business run, but also the technologist, who, you know, historically, we love our speeds and feeds, and we like to geek out, right? But, in today's world, you need to really meld the business with the technological enablers. And that requires communication between the business lead and the technology lead.

So, the book is a sort of a way of explaining things like cloud computing in a business sense, because cloud computing isn't about technology. It's really about business models, new business models, new operational models, new economic models, new legal models, and all of these put together are now being transitioned into new fifth-generation telecommunications networks, which is a whole new ball of wax. So, this communication, this education, the way to communicate with respect to a industry goal, industry vertical, is just critical in digital transformation. Okay, so that makes sense. So, for more of the business minded folks, you're using their language, right, around a lot of these KPIs and how they measure business performance, but you're then introducing them to some of the fundamental principles around cloud computing, and vice versa, for folks who are more technologists and are probably well aware of the technology side of cloud computing, it's giving them some of the business context so that they can, in turn, have those conversations with their business stakeholders. I get that right. Okay. Right, absolutely. The other aspect of it is that we have really jumped from the physical world into the virtual world and digital transformation is a key component of that. Help me understand what you mean there. Can you give me an example of the jump from the physical to the virtual? I can think of, you know, ways over the last 20 years that there's been jumps from physical to virtual, but what are you seeing right now that inspired you to take this on? Well, some of the physical products that we are used to having are now getting digital extensions, digital adjuncts.

A simple idea was the Fitbit that would help you keep track of what you were physically doing, the calories, the distance. But there are a lot of virtual aspects, like comparing you with your friend or competing in a virtual world. And this became even more important when we all got locked into our homes with the pandemic. Yes. And the extension of things to make more entertainment, to make your work entertaining. And this is really an important aspect of our entire life now. Your work entertaining or your workouts entertaining. And I've got some friends who are quite, quite into their Pelotons. So, it sounds like it's along the same lines of this, you know, even sort of physical devices. And so, this kind of gets to manufacturers, right? Who you, you know, maybe would have think of being laggards in digital transformation, but all the more reason why, you know, manufacturers need to embrace this as much as, say, financial services, which has kind of, you know, one of those usually first cutting edge to adopt digital because they're already operating with a sort of abstract concept, right? Money. What even is money? You know, but actually, in manufacturing, for instance, you build a physical product, but now you have to create a virtual representation of that product, a digital twin, so that you can do maintenance on the product or predict how it will operate in the real world. And you use the learnings from the virtual world to improve the physical product in financial services.

Well, you think fiat money or the dollar bill is something that you really can't conceive. What about Bitcoin, which is a digital currency that many countries are, and many countries are creating their own digital currency? So, even the financial world is going into another level of virtual transaction. Okay. All right. So, this kind of, you know, there is sort of the, in the aughts, kind of an initial shift to a lot of web experiences, but now you're seeing this kind of whole extra wave where across industries, things are just pushed to the next level in terms of the digital capabilities that both customers are expecting and opportunities for those businesses. What do you think is the biggest challenge before we dive into some of the specific questions I have, what do you think is the biggest challenge that companies face with embracing this shift from physical to virtual? Well, one of the biggest issues is that you're no longer engaging in a one-to-one relationship with your customer. You, as an organization, now sit in the middle of an ecosystem where there's a many-to-many relationship. So, digital transformation is really about being able to service the ecosystem and living in a world of coopetition where you not just compete with other organizations, but you cooperate with other organizations in order to build the entire marketplace. Okay. That makes sense that from a business perspective, that's a big shift.

Right. So, and I think we'll see in the book, you know, you talk particularly around things like API management and, you know, how that supports that sort of ecosystem approach, right? Because you then can present this API ecosystem and, you know, engage with these other parties who maybe in the past you wouldn't have paid any attention to, you know, they're not competitors or anything. But now they actually, there's some way you can bring in value and APIs are an important sort of touch point to bring in these vendors. So, there's a great section in the book about that. Yes. Absolutely. The API economy really visualizes this ecosystem. Yeah. And we've got a lot of Spring developers, Java Spring developers, who do listen to this podcast. And, you know, that's one of the things in the recent state of Spring research study we did, that one of the number one things that folks are building with Spring and Spring Boot are APIs. And so, it's, you know, there's, there's a lot of momentum, particularly in the Java ecosystem. And I'm sure other languages as well, but that's just a recent data point to throw out there. I wanted to also look at just sort of stepping back. You, as we talked before, that this book really provides a kind of common way for both technologists and business people to kind of get on the same page about what cloud computing represents. You sort of, you, you talk about hybrid models and, and the, the conclusion that I took away is like, okay, it's almost like, yes, hybrid is the way things are going to be. Both hybrid cloud, as well as the broader hybrid IT model you described. And you also talk about multi-cloud and you cite a lot of evidence that sort of shows that multi-cloud is also going to be very much a reality.

And, you know, but there's, that's where folks are often struggling and not equipped to handle the governance and management from that multi-cloud plane. But I kind of wanted to just put it to you, because I hear this sometimes from folks where it's like, well, we want to go all in on XYZ specific cloud provider. And that's our plan. But what do you have to say? Is that something that, is that also a potential path that folks go down? Well, if there's nothing else that's a truth in life, is that change happens. If you commit to a single cloud service provider, you are limiting your ability to change. Before, vendor lock-in was always a bad thing. So, why is vendor lock-in and cloud computing all of a sudden a good thing? It's not. Contrary to what every cloud service provider wants you to believe, the cloud computing model doesn't fit every enterprise need. And when the cloud service provider actually designs their services, they are only addressing about 80% of their targeted market. And each of the cloud service providers actually independently target different customer sets. Not all cloud service providers are the same. And even if you are that particular provider's perfect customer, you would still have about 20% of your IT needs still unfulfilled. So, that's where maybe a managed service or a traditional data center capability comes into play.

You know, looking at the enterprise segment, there's going to be something left on the table. Okay, I just kind of wanted to play a little bit of devil's advocate there with the sort of implied assertion that, you know, hybrid and probably multi-cloud are the future. And just sort of see what your reaction was. Yeah, actually, it's today. Every, even as an individual, how many cloud services do you consume? I know I listen to Pandora, a cloud service, when I'm working out with my Fitbit, a cloud service, and answering my email on either Gmail, one cloud service provider, or Azure and Outlook, another cloud service provider. Well, sure, and you've got, you know, the proliferation of different SaaS offerings for many of those common business applications, right? The ones that probably aren't differentiating your business, you know, core CRM, HR management tools, you know, you need them to run your business. But they're probably not what's going to have your company stand out from the rest. And, you know, I think that in large... And they're talking to different cloud service providers. Different cloud service providers. I guess this is great. Yeah, where I hear it more is maybe more on the core IT side. Where it's, you know, we're talking about, you know, what is the raw infrastructure platform that we're going to use for our own custom development? Are we going to custom develop and run it in our own data center, where we probably have a lot of our existing custom development? Or are we going to try to move everything over to various cloud providers or a single cloud provider? And there's certainly some simplicity in just having one. But, you know, simplicity is not always an option. Right. And you have risk with choosing any option.

So cloud computing is a risk management exercise. I like that soundbite. Cloud computing is a risk management exercise. So the next question I had, I realized, like, I wrote it as I was kind of early on in the book. And then later you actually addressed part of it. But it had to do with reasons for digital transformation that you lay out at the beginning, often around kind of, you know, the enhancing the customer experience. But you didn't cite things like cost savings or cost reduction. Now, later you do talk about how cloud computing does provide a kind of cost flexibility model. And that is an important part of the shift. But just given what we're seeing right now with the impact of the pandemic and a lot of folks facing, you know, either just a lot of uncertainty in their own budgeting process or very real cuts. Another, you know, another recent survey we did with Forrester, we found, you know, what sort of your priorities and cost savings jumped up to the top of the list. Not surprisingly, as this is our biggest concern and our biggest constraint, right, in terms of being able to invest in modernizing our application. I guess the question is, what do you think, how do you think folks can go about affording to invest in digital transformation and sort of the work that needs to go into building out those ecosystems and the digital twins, for example, in manufacturing? How do they find ways to invest in that in this current environment where budgets are shrinking? And do they need to show cost savings in order to justify investment? Or should that not be the criteria for digital transformation? Increased efficiency and increased relevance in the marketplace with respect to your products and services deliver much more value than reduced cost.

Delivering the same thing at a reduced cost is a survival strategy, not a winning one. If that's what you need, by all means, do it. But reduced cost should actually be seen as a side benefit of digital transformation. The real value is delivered through the organization's ability to deliver these products and services better, faster, and to a much broader customer base. This means more revenue. And then enterprises can also create unique products and services that will differentiate them in the market. So it's about the business case. It's not about reduced cost. You know, coming back to something I hear from a lot of technologists who are eager to reduce some technical debt so that they can move faster, do something that they can, you know, engage in some form of this digital transformation, right? They've picked some aspect of their portfolio. In the spirit of empowering and enabling those technologists to make that case, what do you recommend that they go do to identify, you know, hey, this is about being able to deliver better, faster, and to more people, and therefore capture more value, as opposed to just do the same thing but cheaper, which is a survival tactic, as you say. Well, there are some things that aren't unique to your differentiation in the marketplace. These commodity services that cloud computing actually can deliver at a much lower cost. The challenge, however, is that you also have to simultaneously change your operational model.

identify your commodity processes, your commodity IET requirements. Then you can select appropriate cloud services, but take the necessary step of modifying your operations to take advantage of those cloud services. things like auto-scaling or building your IET to match its demand. The most important tool when you need to reduce cost by leveraging cloud is the O-N-O-F-F switch. Because if you run your infrastructure in the cloud the same way you run your infrastructure in your data center, it's going to cost more. So you have to change your operational processes to take advantage of the ability to turn infrastructure on and turn infrastructure off. That's how you reduce cost. You know, I'd almost argue that it's just the O-F-F part. And it's really about the cost savings. You know, the on part is about the speed to market, right, because that's the challenge in a sort of legacy model is if we have to get ready for a scaling event. And here we are in November, to the extent that there will be any kind of normalcy around Cyber Five, Black Friday through Cyber Monday, which now apparently starts on Thanksgiving Day itself. And that's why you get five days of it.

Oh, I actually thought Black Money, I saw a commercial, Black Friday started today, didn't it? You know, like, it's just a Monday and early November, why not? But, you know, like that kind of scaling event or, you know, you're a telco provider and you're getting ready for a new iPhone that's going to launch. Or you're in insurance and you've got open enrollment season or, you know, whatever it is. Different industries have their own scaling events that you can see coming. But some folks would spend seven months preparing for them because, you know, it wasn't just about, hey, like, can we forecast what the peak demand is going to be? Then we've got to order the servers. Then we might have to test, does this application even work if we park more servers under it? Because it doesn't, you know, especially monolithic applications, they're not chewing gum. You can't just stretch it and, like, park more machines and expect the application to behave the same way. So you have to do a lot of testing. And so that on switch is the key. And I agree with you there that there's similarly the same changes in the operational model to take advantage of that on switch the same way that the off switch is really how you actually can expect to achieve any of those cost benefits. Exactly. So if you just go to cloud without changing your operation so that you can enable and leverage that off switch, you can't reduce cost. Yeah. Okay. What are some other examples of those operational changes that are critical to being able to make that shift and be able to expect to realize any of those cost savings benefits? Well, a lot of people talk about the change from capital expenditure model to an operational expenditure model in cloud.

So that's all fine and good, but if your accountant in your organization doesn't know, don't know how to read the bill that comes from the cloud service provider or have a process that can actually change the acquisition model and the accounting model to take advantage of when you turn off the infrastructure, then you can't realize your savings. I remember working before when we were actually operationally and from the technological point of view, we weren't using or consuming IT services, but the financial organization didn't have a way of not accounting for it. So it always showed up. Wow. Okay. Yeah. I think that's, I, you know, I've done enough, you know, basic accounting to see where those problems would show up. Right. Because you buy a server and that was the financial transaction. Right. And it never wasn't about buying a service, then reviewing the bill from that service and ensuring that you are paying for exactly what you consumed. Yeah. I mean, it's even more complex or complicated than a subscription model, right? Where, you know, at least in a subscription model, you kind of know what you're going to pay for the year or whatever the term is. And then you can, you can recognize those expenses over the course of the term in a very linear fashion. Right. So that's when you get to that true pay per use utility model, then there's some extra nits in that.

Okay. Thank you. That's, that's helpful. You know, my last kind of big question area for you is that I really like the way you characterize a platform as having that near zero marginal cost of access, reproduction, and distribution. It seems like most of the examples you're thinking of or that you're sort of, you know, drawing from in that are sort of like the platform players, you know, thinking of like a Fitbit or a Peloton or, you know, like a platform that is then offered directly to your service. Or Etsy is another, you know, Etsy is another, you know, one of my favorite examples, right? Where they've created a platform where others can come and list something and then someone else can, can buy it. So, but I wanted to see what do you think happens internally within companies and is this model possible? I think it's a great way to think about sort of this decoupling of, you know, what the, what the cost is compared to what the benefit is. Do you, is that something you see like as internal IT supports developers, can they do that with this sort of model of near zero marginal cost of access, reproduction, and distribution? Oh yeah, absolutely. Because the near zero refers to digital products and services. And you can link that directly to information about your internal business processes. The more information that you can deliver to decision makers, the better decisions they can make within your organization. So, um, sometimes these digital products can be standalone or they can be paired with actual physical products or, or processes within your organization.

So, contemporary business expansion goals today really need to target what you can do and what you can provide in the virtual world. And that's not only virtual products and services to your ecosystem, but information internal to your organization. Okay. So thinking about it as, um, yeah, almost like from the data perspective, which you're really, you know, you're turning that data into information and you're getting information to more folks. Um, I can definitely see that too. Um, I can definitely see that too. And almost the, again, to come back to that, that, um, the, the API ecosystem, right? How do you expose more of your internal data just to other internal users? Absolutely. Through an API and whether they're building software for other internal users or they're building software that actually does go out to customers. They, they, they're, they're then accessing that, that data and information via an API. And then, then that can support many, many more, um, developers who are building more services, helping those internal decision makers or helping customers make decisions. Right. The biggest value internally is the ability to link people and, uh, enable them to give them the tools to collaborate. Data enables better collaboration and internal APIs actually, uh, do the same thing. Yeah, no, it's, uh, it's exciting and, um, it's been wonderful to chat with you, um, speaking today with Kevin Jackson, author of Click to Transform. Uh, folks, where can, other than reading the book, um, Kevin, where can folks follow you or learn more or, you know, read more of your stuff?

Yes, I'm, uh, everywhere online at, uh, Kevin underscore Jackson on Twitter or, uh, Kevin Jackson on LinkedIn. Or you can actually just, uh, Google Kevin L. Jackson cloud computing. All right. Well, thank you so much, Kevin. Have a great rest of your day. Thank you very much. Thank you.

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