Public cloud: Real-world lessons of strategic success

The public cloud is fast becoming a strategic tool for companies opting for IaaS over running workloads on premises. IT leaders share their experiences and lend advice to CIOs migrating to public cloud services to drive innovation, agility and revenue growth.

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Public cloud services are 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 more strategic projects — namely, digital transformations aimed at boosting the bottom line.

Whether that means building a mobile app or analyzing data to strengthen customer engagement, these shifts signal how strategic the public cloud has become. But CIOs also view the cloud as a way to build software faster by embracing agile, DevOps and design-thinking philosophies. Fueled by these technology trends, the global public cloud market will grow at a 22 percent compound annual growth rate this year to $178 billion, according to Forrester Research.

IT leaders shared with CIO.com their business drivers, experiences, and lessons learned in moving to the public cloud. Many also offered some practical advice or lessons learned for CIOs looking to the make a strategic shift to the public cloud.

Document management moves to the cloud

When Liberty Mutual employees complained that downloading large documents from a legacy file system was a chore, CIO Mojgan Lefebvre adopted a cloud-based content management system running on Amazon Web Services.

Now 1,600 underwriters, actuaries and other employees spread across 46 offices in 18 countries download and share roughly 500,000 digital files anywhere in the world, Lefebvre says. Liberty employees access the content from cloud document management system Alfresco, which runs on AWS regional data centers. Such localization serves up the documents with little to no latency, while saving Liberty Mutual roughly $21 million in paper, printing and storage costs.

"This was about creating global productivity teams that could collaborate and leverage our scale around the globe, to do it effectively in a digital manner, and have the technology be the enabler rather than get in the way,” Lefebvre says.

Liberty is expanding its Alfresco on AWS implementation to other parts of its underwriting and claims organizations. Lefebrvre anticipates Liberty will store approximately 300 million documents in this fashion by the end of 2018.

Lefebvre’s lesson learned: Inform employees about the change in advance and provide training as needed. Also be sure to provide a “consistent message to end users and set expectations, and have the processes in place to support end users,” Lefebvre says.

Cloud is the ticket for Live Nation

It’s rare that a cloud migration happens because the CEO mandates it, but that’s where Jake Burns, vice president of cloud services for Live Nation, found himself in late 2015 when the CEO ordered the company to move 100 percent to a public cloud. “He wanted us to be this modern, agile company,” Burns says.

It was refreshing for Burns, who was already contemplating shuttering data centers and moving to, at the very least, a hybrid cloud. Emboldened by the CEO, Burns reskilled roughly 20 engineers in cloud solutions before moving Live Nation’s corporate operations, including Oracle databases and SAP applications, to AWS. “The planets aligned and we were able to cut through the bureaucracy,” Burns says.

Many people have come to view the cloud as salvation from infrastructure hell. But Burns says the cloud courts new complexity, including managing virtual machines, snapshots and backups, to ensure costs don’t spiral out of control. “Be careful what you wish for because once you're there, you have a whole host of new problems that you have to deal with,” Burns says, adding that he’s seen failed cloud migrations because people couldn’t rein costs. “That being said, going all in on the cloud in a cost-effective way can be done and we’re the proof.”

Burns’ recommendation: Consider hiring someone with technical and business chops who can understand the costs associated with consuming cloud technologies. That will save you from bill shock. "You need to have somebody who understands the technology and who is accountable for costs,” Burns says. Burns currently serves this role for Live Nation.

Process control in the cloud

Honeywell International has embraced public cloud solutions from IBM to manage process control systems in oil and gas production, a move that reduces costs for customers without sacrificing reliability, says Jason Urso, CTO for Honeywell’s process solutions business.

Previously, Urso’s IT team managed software running on premises at manufacturing plants. Today, his team “wraps” control system applications in VMware, which in turn runs in IBM’s cloud. "By deploying our control system in the cloud for them, we can give them the tools to operate those wells safely, reliably and efficiently, while eliminating IT infrastructure they would have needed,” Urso says.

Honeywell also uses Microsoft Azure to collect and analyze data from a variety of processing plants. This information helps advise customers on how to improve yield, uptime and staff deployment.

Challenges faced: Migrating to the cloud posed change management challenges for a staff accustomed to managing software and hardware on premises. “We needed whole new IT and application skills, so that’s a pretty big organizational shift we needed to make,” Urso says, adding that his team also had to become comfortable with maintaining cybersecurity and resiliency in cloud environments.

Heavy machines get cloud treatment

United Technologies, whose businesses provide elevators, turbines and other industrial equipment, struck a strategic agreement with Microsoft to leverage Azure and other cloud technologies to support its business.

UTC CIO Vince Campisi says Azure is accelerating computing capabilities used to support smart factory initiatives, including internet of things (IoT) capabilities, field services, maintenance and repair and other business processes. “Historically, it took two to three months to provision dedicated physical equipment for engineering, or six to eight weeks for virtual resources,” Campisi says. “We can now spin that up today.”

UTC’s Otis elevator unit uses Dynamics 365 CRM to help service technicians and sales teams better serve customers and anticipate when machines will require service.

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. Drumgoole, the company's CTO, says more than 90 percent of new apps GE builds run natively in a public cloud. "We don't deploy anything new internally anymore," says Drumgoole, who reports to CIO Jim Fowler.

GE runs internal and customer-facing applications on AWS and 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. GE still runs apps sensitive to federal regulations in its own data centers, Drumgoole says, though he expects those to migrate to a public cloud once 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," he says.

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.

Drumgoole's advice: Watch vendor lock-in. Every petabyte you migrate cedes more control to your cloud provider. 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 says. "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."

Public cloud helps ensure speed and agility

The public cloud is integral to MetLife, where Alex Seidita, the insurance company’s chief technology architect, uses cloud software to differentiate MetLife for customers and improve operations. Speed and business agility are the biggest reasons MetLife has moved to the cloud, but the cloud also happens to "bring saving through automation,” Seidita says.

MetLife uses Microsoft Azure to power its microservices, including call center capabilities and Infinity, an application customers use to store photos, documents, and other content. As a result, MetLife has reduced the time to deploy new virtual machines by an average of 83 percent. 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 the cloud 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 says.

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.

Banking on the cloud

Bank of America has long resisted moving to public cloud services, claiming that the economics aren’t worth it and that its software-defined network (SDN) did the trick.

Yet BofA surprised industry watchers by striking major cloud deals with 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 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 2017. 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 the bank’s application speed, security or service levels.

Even so, Bessant said that 80 percent 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, 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, and 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 applications 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 to facilitate collaboration with business executives and automate software delivery, American Airlines found its answer in the cloud. The company is moving its website, mobile app 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 reinventing 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: Just do it. While there is plenty of information on cloud computing to agonize over, CIOs should just take the plunge. And enterprises should also commit 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 service has become increasingly competitive of late. To achieve an edge, Ancestry.com has announced it’s going "all-in" on AWS, where the company will host billions of historical records, including family trees, and customer DNA profiles, says Nat Natarajan, executive vice president of product and technology at Ancestry.

“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: Garner executive support, recognize that moving to the cloud is less about technology and more about operations, process and people, and appoint a dedicated leader to run point for the transition. "Thinking about the ops pieces, culture change and skillset change is crucial,” Natarajan says.

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This story, "Public cloud: Real-world lessons of strategic success" was originally published by CIO.

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