Public cloud services are becoming a strategic weapon for CIOs. More than a way to cease operating data centers, the public cloud offers CIOs the ability to focus on strategic projects 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.
As a result, many CIOs are adopting “cloud-first” strategies. The worldwide public cloud market, also known as infrastructure as a service (IaaS), grew 29.5 percent in 2017 to total $23.5 billion, according to data Gartner. “Cloud-directed IT spending now constitutes more than 20 percent of the total IT budget for organizations using cloud,” says Sid Nag, a Gartner research director. “Many of these organizations are now using cloud to support production environments and business-critical operations.”
IT leaders shared with CIO.com their experiences and lessons learned in making a strategic shift to the public cloud.
IoT on the cloud regulates store temperature
Extending a long-running strategic partnership, Walmart is using Microsoft’s Azure cloud software as a key component of its digital transformation, which includes tapping into machine learning (ML), artificial intelligence and internet of things (IoT) to improve business operations and business outcomes.
For example, Walmart is building an IoT platform on Azure to analyze data streaming from thousands of HVAC and refrigeration sensors, which could help reduce energy consumption across the retailer’s 5,000 stores, says Walmart CIO Clay Johnson. Using data based on the number of people in its stores at a given time, Walmart can automatically adjust the air conditioning. Walmart also expects to run ML algorithms on Azure to optimize the routes of its delivery trucks.
Johnson says Walmart will also move applications for HR and finance to Azure, making them more agile and in turn helping the company’s 2.3 million employees make smarter decisions. “It all goes back to Azure,” Johnson says, adding that he expects Microsoft’s cloud will spur innovation for both companies. “We’ll learn from them and they’ll learn from us.”
Walmart is also testing Microsoft’s MyAnalytics reporting tool, which helps Office 365 email users get a handle on how much time they spend on meetings and email. It also shows how many uninterrupted hours workers spend on key tasks, which colleagues they spend the most time working with, and how much time they work outside business hours.
Next up for Walmart: building a chatbot based on Microsoft’s Cortana business intelligence software, which it already uses to help employees find corporate information and to automatically schedule meetings.
Johnson’s tip: Once an enterprise is in the cloud, CIOs must ensure that they have a way to capture and analyze the data streaming off of connected systems, or they risk losing opportunity to create new value. “It’s about how to use that data to create more efficiency in work,” Johnson says.
Cloud fuels frictionless payments
ExxonMobil selected IBM to design, build and host its Speedpass+ mobile payment application, which eliminates the need for consumers to enter information at the oil and gas giant’s 11,000 U.S. stations, according to Devin Miller, Exxon digital application development manager, who worked closely with IBM on the app.
Putting the consumer experience at the forefront was key for Exxon. The app, which is hosted in IBM’s public cloud, is part of the company’s digital transformation efforts to differentiate itself from rivals, Miller says. Rather than initiate a number of steps at the pump, including entering a ZIP code, opting in for a car wash, or redeeming loyalty points, consumers initiate fueling by tapping a button in the Speedpass+ application. They can also pay for car washes and collect reward points from the app, which has more than 1 million downloads from the Apple App Store and Google Play.
In addition to speeding up the fueling process, Speedpass+ is more secure because it is contactless. Users needn’t swipe a credit card, which can be susceptible at pumps where perpetrators have attached “skimmers” to siphon consumers’ payment information, Miller says. Now the trick is ensuring that Speedpass+ works 24/7, everywhere consumers aim to use it, Miller says.
Miller also says that IBM’s public cloud, building on a long-standing partnership in which Exxon has used IBM systems in its own data centers, has proven extremely reliable in ensuring the app’s availability. “It helps us hit on our objective in growing consumers’ loyalty while also removing any pain points or friction in consumers’ journey,” Miller says.
Miller’s advice: Once a new digital service takes wing, there is no going back, which is why the platform on which an app is hosted must be resilient and always available, says Miller. Consumers expect an Amazon.com-like experience from every digital interaction, he says, and if doesn’t work, their faith and loyalty in the brand can be shaken. “When that experience is on a digital platform, expectations are heightened by default,” Miller says.
Cloud floats grocery deliveries
Four years ago, Grocery delivery firm Ocado began phasing out virtualized systems in favor of a multi-cloud strategy that has reduced the time, resources and cost overhead of managing hardware and software, says Chris Dabrowski, general manager of Ocado.
Today the company, which inked a major deal with Kroger to extend its reach to the U.S., largely leverages an OpenStack system and Kubernetes to orchestrate Docker containers supporting its warehouse and fulfillment centers, and AWS to power its mobile applications and ecommerce system, says Dabrowski.
Additionally, Ocado, which is still migrating its retail business off legacy systems, uses Google Cloud Platform to analyze data streaming from its systems, Dabrowski says. But Kubernetes gives Ocado the ability to port workloads to new containers if it experiences failures.
Dabrowski’s insight: Migrating to the public cloud has required Dabrowski to hire new talent to work with the container and cloud systems. The move has also required a companywide cultural transformation — a task that may have been as hard the migration itself. “It was really a case of selling the benefits to all of the stakeholders,” he adds.
In 2015, DHI Group CTO Klavs Miller found himself struggling with IT assets that had grown decentralized thanks to years of mergers and acquisitions, each of which seemingly brought with it a new platform hosted by a different vendor. Juggling these disparate platforms was a “drag on the new business,” as IT struggled to focus on new initiatives, Miller says. DHI operates career resource websites, most notably Dice.
Miller turned to Amazon Web Services to host new products and to migrate existing workloads to get a better handle on IT. He and his technical team took the plunge together, creating a task force to figure out how to refactor certain applications for AWS.
DHI first migrated Hcareers and Health eCareers before selling them last year; it subsequently shuttled existing assets ClearanceJobs, eFinancialCareers and Dice to AWS. The latter migration included a switch from Oracle database systems to AWS RDS software.
“It’s been a resounding success commercially, improving the performance of our services,” Miller says. “The team was committed to making it work.
Miller’s tip: Recognizing that cloud instances were racking up service fees, Miller installed a cloud compliance manager to select and approve instances and monitor usage. This engineer, for example, questions developer teams on their cloud compute needs and helps them make responsible choices. “That definitely was an issue that we dealt with,” Miller says. “We do a lot of tracking of costs, some automated, some manual.”
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 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 in 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, vice president and general manager 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.
Urso’s challenges: 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.
Public cloud helps ensure speed and agility
The public cloud is integral to MetLife, where Alex Seidita, the insurance company’s chief technology architect and CIO, Latin America, 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.
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