Cloud

The Latest

22 October 2021: Google’s latest digital solutions, product features and partnerships were unveiled at Google Cloud Next ’21. In this three-day event, Google and Alphabet chief Sundar Pichai and Google Cloud CEO Thomas Kurian led the keynote sessions on Google Cloud’s improved customer ecosystem and security capabilities.

Possibly the most significant announcement at the event was around Google Distributed Cloud. The Google Distributed Cloud (GDC) platform allows deployment of Cloud-native architecture to private data centres. GDC Edge provides capabilities to run applications at the ‘far edge’ of organisations - IoT devices, AI enabled devices, and so on - via low-latency LTE, radio access network (RAN) networks, and newer 5G Core network technology.

Google Distributed Cloud does not require enterprises to connect to Google Cloud when using their APIs or managing network infrastructure. This is important for organisations (e.g. public sector, finance, health) needing to retain on-premises deployment for tighter control over security and compliance.

 

Why it’s Important.

With GDC, all the top three hyperscale Cloud vendors now have options to run applications developed for public Cloud across private and semi-private infrastructure. Furthermore, all three vendors have approaches to ‘edge’ computing. This is a natural evolution of the operational practices, automation and management software, software defined networking and hyper-converged infrastructure (HCI) that sees the Cloud seeping back into all areas of ICT. As this trend continues, and the lines between where ‘Cloud infrastructure’ sits, organisations will need to make decisions on the key automation and management platforms they will adopt across Clouds.

More organisations have started looking for better solutions to place their Cloud resources anywhere and in any geolocation. This offers considerable reductions in latency by eliminating the distance between users and their content to ensure highly available data while keeping costs low.

 

Who’s impacted

  • CIO
  • Development team leads
  • Business analysts

 

What’s Next?

All the hyperscale Cloud vendors are offering this type of flexibility and they are strongly expected to improve over time. It will further drive hyper converged infrastructure (HCI) investments driven by the demand for cost-effective scalable storage with strong durability and availability guarantee.

 

Related IBRS Advisory

  1. VENDORiQ: Hyperconverged Cloud for Legacy Apps

  2. Trends for 2021-2026: No new normal and preparing for the fourth-wave of ICT

The Latest

22 October 2021: At Google Cloud Next ’21, Google announced the general availability of a PostgreSQL interface to its hyperscale, global spanning Spanner relational database. In short, this means that organisations that have applications that are compatible with PostgreSQL can now migrate to a highly elastic database that is significantly less costly, more robust than running PostgreSQL instances on virtual machines.

 

Why it’s Important.

Google’s highly scalable Cloud relational Spanner database provides high-velocity transactions, strong consistency, and horizontal partitioning across global deployments. Like other specialised, serverless Cloud databases, Spanner previously required legacy (on-premises) applications’ data access layers to be reworked. 

The addition of a PostgreSQL interface greatly reduces development teams’ workload for migrating applications to Spanner. This has several knock-on impacts when migrating applications to the Cloud, including: 

  • reducing training  / new skills development, and allowing existing skills to be fully leveraged
  • reducing the vector for new bugs to be introduced
  • simplifies testing

Overall, this significantly lowers the cost and risk of moving an app to the Cloud. 

As always, the devil is in the detail. Cloud Spanner Product Manager, Justin Makeig posted that the platform does not yet have universal compatibility for all PostgreSQL features, since the company’s goal was to focus on portability and familiarity. However, IBRS has determined that even with the current level of functionality, the PostgreSQL interface for Spanner presents good value for teams looking to migrate legacy applications to the Cloud.

Google is not the only hyperscale Cloud vendor that has enabled this type of operability. However, Cloud Spanner is more economical than competitive hyperscale Cloud database products at this time.

 

Who’s impacted

  • Development team leads
  • Cloud architecture teams

 

What’s Next?

Google announced that it is planning to expand its Spanner integration to additional database standards. Data portability and migration of legacy applications to hyperscale Cloud is now a focus for many ICT groups. The availability of open standard SQL interfaces to database PaaS (platform-as-a-Service)  is expected to be a trend for application and data migration, especially where the applications are complex.

 

Related IBRS Advisory

  1. VENDORiQ: Google introduces Database Migration Service

  2. Enterprise resource planning (ERP) Part 5: Will automation of S/4HANA data migration make modernisation

The Latest

22 September 2021: Six months after GorillaStack has released capabilities to monitor and apply rules to any AWS events, it has added similar functionality to Azure. The new service enables greater governance and automation of Azure. The new Azure service focuses on identifying when bad changes - particularly those that may impact security - occur.

Why it’s Important


As previously discussed, Aussie born GorillaStack is one of the earliest vendors to address the complexities of Cloud cost management.

Since its inception, GorillaStack has evolved into a more expansive Cloud monitoring service, with a growing focus on security and compliance. In March 2021, GorillaStack announced real-time event monitoring for AWS. With this announcement, it expands the monitoring of events to Azure, and confirms IBRS analysis that Cloud cost optimisation and security compliance go hand-in-hand. In short, enforcing configurations for security follows the same processes and uses common architectures as enforcing financial governance within Cloud infrastructure. 

Who’s Impacted

  • CIO
  • CISCO
  • Cloud teams 

What’s Next?


When reviewing solutions for Cloud cost optimisation through compliance, consider the extent to which the service can also assist with tightening up security. Conversely, when looking at tools to help enforce Cloud security compliance, consider how these may also be used to manage costs.

Related IBRS Advisory

Conclusion:

The choices when selecting and designing an enterprise resource planning (ERP) solution are immense and typically require industry-specific considerations. Executives rightly desire fully-integrated IT services across all departments within an organisation. The end result is a reliable, fully-integrated, and secure solution whether it is deployed in a public or hybrid Cloud solution.

What should not be up for negotiation are the essential, machine critical controls (CCs) that maintain the effectiveness and security of this critical asset during normal business operations. In all, IBRS previously addressed the 10 human-facing CCs1. In this research article, the focus is the remaining 10 machine CCs.

Conclusion:

Cyber security incidents are increasing in frequency and severity. Organisations, governments, executives, and boards are now actively monitoring and probing the progress of cyber security initiatives. At the same time, there are legislative and industry-wide pressures to achieve predetermined levels of compliance. Cyber security frameworks (CSF) provide a system of standards to achieve and demonstrate cyber security maturity. However, the task of selecting an appropriate CSF is now more complex due to the number of frameworks currently flooding the market.

According to a landmark economic analysis from IBRS and Insight Economics, Australia’s Federal and State government sector could unlock an $62 billion ‘digital dividend’ by replacing old technology with Cloud-based Software as a Service systems (SaaS). 

In their report, “The Economic Impact of Software-as-a-Service”, IBRS and Insight Economics set out to analyse, for the first time, the savings from modernising IT systems across a range of industries including government, education, health & aged care and financial services.

Full Story.

The Latest

27 August 2021: Security flaw hunters at Wiz were able to obtain the security keys that control access to Microsoft’s Azure Cosmos DB, and demonstrate that it was possible to access customers’ Azure Cosmos DB.  

Why it’s Important.

This flaw is especially worrying, because all Cloud vendors and many independent security advisors, including IBRS, have been advocating that Cloud security is generally of a far higher standard than that achieved by most in-house data centre teams. IBRS stands by this claim. But this does not mean Cloud vendors will not make security mistakes. And when they do, they will impact large numbers of organisations.

There is no evidence that this security flaw - likely an operational oversight - has been exploited. Once it was identified by Wiz (on the 9th August) and flagged with Microsoft (on the 12th August), the existing keys were quickly re-secured. Unfortunately, the keys in question are fundamental security assets that Microsoft cannot change. Therefore, Microsoft emailed the customers (on the 26th Aug) requesting they create new keys, just in case the previous keys had fallen into the hands of bad actors. It is estimated that 3300 customers have been impacted. 

To mitigate this issue, Microsoft advises Cosmos DB customers to regenerate their Cosmos DB primary keys immediately.

Unfortunately, just because there is no evidence the flaw had been leveraged, organisations should assume the worst. It is well publicised that state-actors hoard such flaws for intelligence gathering. In this case, paranoia may be justified.

More importantly, the situation highlights the need to take a multi-level approach to security in the Cloud. Relying on security protocols to secure an essential asset places organisations at greater risk of these hyper-scale security flaws.  

For example, in this situation, organisations that have behavioural/usage pattern analytics monitoring the database would likely have been altered should any bad actor start to access the database, and remedial action would be triggered. Furthermore, data from such monitoring could be used to determine the likelihood that the security flaw had been exploited - something few Azure Cosmos DB customers can confirm at the moment. 

Another example is using encryption services, these services should be leveraged extensively. Assume data assets will leak and repositories (including databases) will be breached, base encryption strategies on the sensitivity of the data. 

A migration to the Cloud can often improve the security stance of an organisation, but only if security is treated as a multifaceted, ‘trust nothing’ (akin to zero trust) philosophy is taken.

Who’s impacted

  • CISO and security teams
  • Cloud architects
  • Cloud migration teams

What’s Next?

  • If you are an Azure Cosmos DB client or have instances in development teams, immediately regenerate the primary keys for these databases.
  • Review your Cloud solution designs - including those of ‘lift and shift’ of legacy systems - to identify where single points of security failure could occur. Consider remediation strategies using multi-facilitated security services risks. Such effort needs to be balanced against business risk and information sensitivity. 

Related IBRS Advisory

  1. Cloud Security Considerations – Lessons from the Frontline
  2. CyberArk launches AI-powered service to remove excessive Cloud permissions
  3. New generation IT service management tools Part 2: Multi-Cloud management

The Latest

12 August 2021: TechnologyOne released a significant report based on a six-month long study into the economics of Cloud computing and SaaS among Australian organisations.  

The study, which was independently conducted by IBRS and Insight Economics, explored the tangible costs associated with migrating to the Cloud, with both IaaS and SaaS journeys investigated. An economic analysis of the data collected through 67 in-depth case studies with CIOs and C-suite executives, additional interviews, and over 400 respondents, revealed a $224bn economic dividend for the Australian economy, prompting TechnologyOne to term the report "too big to ignore".

Why it’s Important.

While the report is aimed at policymakers and strategies looking at the macro-economic impact of technology, it also details the costs and benefits of Cloud adoption by industry sectors, providing IT strategists with realistic benchmarks. 

When developing the methodology for the report, IBRS and Insight Economics took a ‘no free lunches’ approach to data collection. Unlike other reports on the benefits of Cloud migration, the study took into account the costs of, and time needed for transition, including training, change management, skills (and skill shortages) and the fact that many organisations will need to retain on-premise environments to support legacy and home-grown applications for years to come. In addition, only productivity benefits that had been measured were included in the analysis. 

As a result of the evidence-only approach to the study, the ‘direct returns’ on Cloud migration detailed in the report are both far lower and far more realistic than those found in studies conducted in the USA and Europe.

The report may be accessed here: https://toobigtoignore.com.au/

Who’s impacted

  • CEO, COO, CFO, CIO
  • Cloud migration teams

What’s Next?

The conservative approach to the study, the rich data collected, means that organisations still struggling to make a business case for SaaS have practical benchmarks and economic modelling to call upon.

Related IBRS Advisory

  1. The economic impact of software as a service in Australia
  2. Get board agreement to the Cloud strategy

The Latest

28 July 2021: During Inspire, Microsoft unveiled Windows 365, which it positions as a Cloud desktop service. IBRS views Windows 365 as an evolution of existing virtual desktop solutions. 

In addition, Windows Virtual Desktop services have been rebranded as Azure Desktop Services. With this rebranding, Microsoft also introduced a number of enhancements, including closer integration with Azure Active Directory (AAD) and Endpoint-Manager, with the ability to deploy applications across both physical devices and Cloud-based desktops based on roles. 

Windows 365 is built on top of Azure Virtual Desktop service. The difference between Windows 365 and Azure Desktop Services is that Windows 365 has more automated, easier deployment and administration options. It is well suited to organisations with minimal VDI specialisation and more akin to a ‘fully managed virtual desktop environment’.  

In contrast, Azure Desktop Services is better suited to larger organisations that have a need for a high level of customisation. It is more akin to a virtualised Citrix farm.

Why it’s Important.

In 2019, Microsoft quietly changed the licensing conditions for running virtual servers in the Cloud, which hindered VMware’s ability to migrate VDI (among other services) to hyper-scale Cloud services. Since then, IBRS has had reports of efforts to migrate VDI into the Cloud stifled by rights, with Microsoft partners steering organisations to an ‘all-in Azure’ approach.

The introduction of Windows 365 and the rebranding of Azure Virtual Desktop certainly fits a strategy of selecting alternative virtual desktop environments less compelling. 

This is not to say that Microsoft’s VDI capabilities are not solid offerings. Windows 365 certainly addresses a problem in the Australian market, where fully managed VDI has suffered greatly from vendors under-scoping the resources needed to run a client's environment in order to come in at the lowest possible cost. Autoscaling in the Windows 365 environment largely eliminates this issue. The level of automation is also impressive, as is an application cook

Who’s impacted

  • CIO
  • Development team leads
  • Business analysts

What’s Next?

Windows 365 is a viable option for specific use VDI cases, and it may be considered against traditional fully managed desktop vendor solutions. However, it may not be cost-effective at scale. Solutions from AWS, VMWare and Google should also be examined, though it is important to consider the total cost of operation of this type of VDI, not just the licensing / service costs. Be sure to factor in human resources for administration, application compatibility testing and packaging (which are significant hidden costs and often overlooked, as well as help desk and support.

In addition, if staying within the Microsoft stack, Azure Desktop Services can provide a more flexible and scalable solution. Again, be sure to factor in the total cost of operation.

Overlooked by many discussions of Cloud VDI is the rise of Cloud application virtualisation services from the likes of Cameyo. Rather than presenting an entire desktop, these services only stream a configured application, either in a manner that makes it appear as a native application or within a web browser. Such an approach is significantly lower cost than traditional VDI. When considering a new virtual environment for your workers, both VDI and Virtual Application Delivery (VAD) options should be considered.

Related IBRS Advisory

  1. Should You Outsource Your Virtual Desktop Infrastructure?
  2. When to Consider Virtual Desktop Infrastructure
  3. VDI trends for 2021–2025
  4. End-user computing managed services: 3 initial things to consider for the RFP
  5. SNAPSHOT: Workforce Transformation beyond Mobility and Digital Workspaces
  6. IBRS Compass: Beyond the Desktop: Creating a Digital Workspace Strategy for Business Transformation

To improve call centre resources scheduling, some organisations have implemented software agents to either improve users’ experience and/or reach the right expert at the right time. Organisations should assess the software agent maturity and determine which level should be reached to fulfil the business imperatives.

Log in and click the PDF above to download the 'Software Agents Maturity Model' infographics poster to discover:

  • 5 levels of software agent maturity
  • 9 qualifiers used to evaluate software agents
  • A self assessing approach to address software agent shortcomings

According to a new analysis from IBRS, Australia could reap a $224bn dividend by fast-tracking investments in digital transformation – and grow the economy by 1.3 per cent, more than six times the benefit of the Olympic Dam Expansion.

Full Story.

Conclusion:

The rapid adoption of Cloud services and the increasing and well publicised cyber security compromises have added to the security concerns within many organisations. The Australian Cyber Security Centre (ACSC) has recently published a set of Cloud computing security considerations whereby organisations are able to undertake a high level self-assessment of their cyber risks as they transition to Cloud services. IBRS has recently hosted a roundtable with senior ICT and security professionals to highlight some hands-on lessons for managing cyber security in a Cloud environment.

Conclusion:

Chargeback of enterprise-wide ICT costs were developed to assign ICT costs to the point of usage. The outcome is twofold; it ensures the initial allocation of ICT assets and services are identifiable, and it enables reallocation of underutilised or unnecessary services. This relies on IT creating assets and services which are commodified and transferable.

A chargeback arrangement can increase tension between ICT and the department managers. Allocating all ICT costs to achieve a zero-sum IT department can exacerbate that tension. Making IT fully responsible and accountable for IT costs can create insular behaviours which stifle innovation and investments in new IT services for departments. Departments will feel entitled to explore ICT improvements without an effective relationship with IT. Creating a chargeback governance model that manages disputes and builds trust in the process is preferable.

The Latest

27 July 2021: During Google Cloud Platform’s (GCP) analyst update, the vendor unveiled details regarding its Australian expansion with a new Melbourne data centre and new management for the ANZ region. 

Why it’s Important

The new data centre is more an indication of overall Cloud growth in Australia, as IBRS has reported in the past. It is less a turning point in Google’s strategy, and more of a necessary response to market trends. It should be noted that a large set of GCP services will be available from the Melbourne zone, but not all. Others will be added ‘based on market demands’. This is a strategy that has been adopted by all three hyper-scale Cloud vendors, and is a clear indication of how Cloud usage is expanding in Australia: from core infrastructure services (especially storage, compute, containers and analytics) to more nuanced services, such as AI.

During the briefing, Google highlighted its private ANZ wide data network as a key differentiating factor. There is merit to this claim, as network infrastructure in Australia remains a thorny issue for Cloud clients outside the major States, such as Perth and Darwin, Adelaide, etc.

More telling was what was not elaborated upon during the briefing. In the past, Google has focused on its capabilities in AI as a key differentiator in the market. While Google clearly has strong credentials in AI, the reality is that most Australian organisations are not investing in AI directly, but rather obtaining it as part of other solutions. 

For example, AI is found in capabilities of CRM products Salesforce (Einstein) and Zoho (Zia), in low-code products from Appian and Microsoft’s Power Platform and so on.  

Instead, Google championed its partner program and its support credentials. Google knows channel partners are essential to competing against AWS and Microsoft. It also recognises that skills are in short supply, so is investing in training and support programs. 

In reality, Google’s strongest competitive weapon is an age-old one: value for money. When evaluating like-for-like core compute and storage services, GCP is more economical than its two top rivals.

Who’s impacted

  • CIO
  • Cloud infrastructure teams

What’s Next?

Most organisations will end up with a multi-Cloud environment, though with a preference for a ‘primary’ platform. Many Cloud migration strategies IBRS reviews are scoped in such a way to limit the choice of deployment to Azure and/or AWS. Given the strengths of these two Clouds, this makes sense. Oracle’s Cloud platform is also appealing to Oracle customers looking for an ‘easy’ migration of their core services. 

Far fewer Australian organisations are formally considering GCP as a viable alternative for running core workloads, or even leveraging it for failover/parallel workloads. This is a lost opportunity. While IBRS is not recommending GCP, it considers that the vendor is under-represented in shortlists and as a result, opportunities for Cloud cost optimisation and contestability in multi-Cloud environments suffer. 

Related IBRS Advisory

  1. IBRSiQ: Google Cloud - Are Their AI Offerings a Point of Difference From Other Vendors?
  2. Vendor Lock-in Using Cloud: Golden Handcuffs or Ball and Chain?
  3. Options for Machine Learning-as-a-Service: The Big Four AIs Battle it Out
  4. How to get on top of Cloud billing
  5. Why Cloud Certified People Are in Hot Demand
  6. VENDORiQ: Data Replication Goes Serverless with Google Datastream

The Latest

2 July 2021: Amazon released a video summary and report on its sustainability targets and performance. The key take outs are that Amazon is the largest corporate purchaser of renewable energy, with a shift of 42% from non-renewable within one year. The underlying message here is sustainability is no longer a political issue for the corporate sector, but a fiscal imperative.  

Why it’s Important

As outlined in previous IBRS research, all of the hyperscale cloud vendors - Google, AWS, Microsoft, Oracle and Alibaba - have well-documented strategies to reduce their reliance on carbon-based fuel sources. All position sustainability as a competitive advantage, not just against each other, but against on-premises data centres. 

It is likely that cloud vendors will be positioning their sustainability credentials in both business and general news channels, looking to position their brand as a leader on climate action. From a cynical view, this messaging will play well with the existing news cycle of the impact of climate change, from the disastrous bushfires to killer heatwaves in North America, to unseasonable storms and record-setting weather events. From a more optimistic perspective, these vendors will drive genuine solutions to reduce the carbon footprint associated with providing computing service.

Therefore, as cloud vendors set or meet zero carbon energy targets, the issue of sustainable ICT is set to re-emerge as a priority for CIOs and data centre architects.  

IBRS and BIAP (via the IT Leaders Summits) have tracked CIOs interest in the topic of green IT. An IBRS study in 2008 had sustainable ICT being rated as ‘very important’ for 25% of CIOs and ‘somewhat important’ for 59% of CIOs. Since then, interest in sustainable computing has plummeted year-on-year. The IBRS / BIAP data for 2016 had 6% of CIOs rating sustainable ICT as a priority. By 2020, less than 0.5% of CIOs rated sustainable ICT as a priority.

IBRS expects this trend to reverse sharply in 2024-2025 as the leading cloud vendors continue to demonstrate both environmental and financial benefits associated with renewable energy.

Who’s impacted

  • CIO
  • CFO
  • Data centre leads
  • Infrastructure architects

What’s Next?

By 2025 the leading cloud vendors will leverage their position in renewable energy consumption as a selling point for policy-makers to mandate cloud computing and place unattainable goals for architects of on-premises data centres.

Rather than waiting, CIOs should review previous strategies for sustainable ICT, with the expectation that these will need to be updated and reinstated within the next 3-5 years.

Related IBRS Advisory

  1. The Status of Green IT in Australian and New Zealand (2008)
  2. Building your Green IT strategy
  3. Think green IT: Think saving money
  4. Forget Green; think sustainable computing in 2009

Conclusion:

The choices when selecting and designing an Enterprise Resource Planning (ERP) solution are immense and typically require industry specific considerations. Executives rightly desire fully-integrated IT services across all departments within an organisation. The end result is a reliable, fully-integrated, and secure solution whether it is deployed in a public or hybrid Cloud solution.

What should not be up for negotiation are the essential, human-facing critical controls (CCs) that maintain the effectiveness and security of this critical asset during business operations. In all, IBRS sees organisations needing to address 10 human-facing CCs from a group of 20 CCs. The remaining 10 CCs will cover the technical controls later in this research series.

Conclusion:

The complexity and scale of Cloud operations is beyond the capability of traditional financial management processes. Today, organisations use Cloud service providers to increase agility, flexibility, and efficiency. Efficiency in this context means the speed of delivery coupled with a reduction in both capital and operational costs. However, that is not the only benefit to be derived. Operating cost reduction is a challenge to organisations that are new to the Cloud and even with those who achieved a certain maturity level. Dealing with operational cost needs in-depth Cloud financial management (CFM).

With this in mind, there are three things to consider with Cloud cost optimisation. First, assess your organisation needs and its level of maturity in using the Cloud. Second, if you lack the skills, then collaborate with a Cloud-Certified Partner (CCP). Lastly, set a collective governance system (guidelines and guardrails) to ensure the services are continuously cost-optimised.

The Latest

26 May 2021: Google has introduced Datasteam, which the vendor defines as a “change data capture and replication service”. In short, the service allows changes in one data source to be replicated to other data sources in near real time. The service currently connects with Oracle and MySQL databases and a slew of Google Cloud services, including BigQuery, Cloud SQL, Cloud Storage, Spanner, and so forth.

Uses for such a service include: updating a data lake or similar repository with data being added to a production database, keeping disparate databases of different types in sync, consolidating global organisation information back to a central repository.

Datastream is based on Cloud functions - or serverless - architecture. This is significant, as it allows for scale-independent integration.

Why it’s Important

Ingesting data scale into Cloud-based data lakes is a challenge and can be costly. Even simple ingestion where data requires little in the way of transformation can be costly when run through a full ETL service. By leveraging serverless functions, Datastream has the potential to significantly lower the cost and improve performance of bringing large volumes of rapidly changing data into a data lake (or an SQL database which is being used as a pseudo data lake). 

Using serverless to improve the performance and economics of large scale data ingestion is not a new approach. IBRS interviewed the architecture of a major global streaming service in 2017 regarding how they moved from an integration platform to leveraging AWS Kinesis data pipelines and hand-coded serverless functions, and to achieve more or less the same thing that Google Datastream is providing. 

As organisations migrate to Cloud analytics, the ability to rapidly replicate large data sets will grow. Serverless architecture will emerge as an important pattern.

Who’s impacted

  • Analytics architecture leads
  • Integration teams
  • Enterprise architecture teams

What’s Next?

Become familiar with the potential to use serverless / cloud function as a ‘glue’ within your organisation’s Cloud architecture. 

Look for opportunities to leverage serverless when designing your organisations next analytics platform. 

Related IBRS Advisory

  1. Serverless Programming: Should your software development teams be exploring it?
  2. VENDORiQ: Google introduces Database Migration Service

IBRSiQ is a database of Client inquiries and is designed to get you talking to our advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

IBRSiQ is a database of Client inquiries and is designed to get you talking to our advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

IBRS interviews Dr Kevin McIsaac, a data scientist who frequently works with board-level executives to identify and prototype powerful data-driven decision support solutions.

Dr McIsaac discusses why so may 'big data' efforts fail, the role ICT plays (or rather, should not play) and the business-first data mindset.

The government’s new tax incentives making it easier to depreciate software will help big businesses invest in their own software development but will do “bugger all” for Australian software companies and small and medium businesses, and may even create perverse incentives for large companies to invest in the wrong type of software, industry experts say.

IBRS advisor Joseph Sweeney, who works with numerous large organisations on their technology strategies said the policy was a positive step in recognising the need to increase development of a local digital services economy, but would do little to raise productivity in the small- and medium-sized business market, which accounts for half of Australia’s workforce. Dr Sweeney is midway through conducting a study into national productivity gains from Cloud services, and said the early data showed that introducing Software-as-a-Service solutions to small and mid-sized organisations was the quickest way to get tangible productivity gains.as
 
“By only allowing for offset in assets like CapEx in IT infrastructure and software, this policy has the potential to skew the market back towards on-premises solutions. It will certainly make the ‘total cost of operation’ calculations for moving to the Cloud less attractive,” Dr Sweeney said.
 

IBRSiQ is a database of Client inquiries and is designed to get you talking to our advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

The Latest

29 April 2021: Microsoft briefed analysts on its expansion of Azure data centres throughout Asia. By the end of 2021, Microsoft will have multiple availability zones in every market where it has a data centre.

The expansion is driven in part by a need for additional Cloud capacity to meet greenfield growth. Each new availability zone is, in effect, an additional data centre of Cloud services capability.

However, the true focus is on providing existing Azure clients with expanded options for deploying services over multiple zones within a country.  

Microsoft expects to see strong growth in organisations re-architecting solutions that had been deployed to the Cloud through a simple ‘lift and shift’ approach to take advantage of the resilience granted by multiple zones. Of course, there is a corresponding uplift in revenue for Microsoft as more clients take up multiple availability zones.

Why it’s Important

While there is an argument that moving workloads to Cloud services, such as Azure, has the potential to improve service levels and availability, the reality is that Cloud data centres do fail. Both AWS and Microsoft Azure have seen outages in their Sydney Australia data centres. What history shows is organisations that had adopted a multiple availability zone architecture tended to have minimal, if any, operational impact when a Cloud data centre goes down.

It is clear that a multiple availability zone approach is essential for any mission critical application in the Cloud. However, such applications are often geographically bound by compliance or legislative requirements. By adding additional availability zones within countries throughout the region, Microsoft is removing a barrier for migrating critical applications to the Cloud, as well as driving more revenue from existing clients.

Who’s impacted

  • Cloud architecture teams
  • Cloud cost / procurement teams

What’s Next?

Multiple available zone architecture can be considered on the basis of future business resilience in the Cloud. It is not the same thing as ‘a hot disaster recovery site’ and should be viewed as a foundational design consideration for Cloud migrations.

Related IBRS Advisory

  1. VENDORiQ: Amazon Lowers Storage Costs… But at What Cost?
  2. Vendor Lock-in Using Cloud: Golden Handcuffs or Ball and Chain?
  3. Running IT-as-a-Service Part 49: The case for hybrid Cloud migration

Conclusion

The COVID-19 pandemic has, in many cases, forced the workforce environment to shrink to the walls of worker’s houses for at least nine months. While some services such as shopping, online learning and telemedicine proved to be useful when made available remotely, many other services were not suitable to run effectively outside the traditional work environment (e. g. those with inadequate network capacity). Organisations should study the feasibility and cost-effectiveness of deploying additional remote services that are critical to improve business performance, increase service efficiency and reduce the cost of doing business.

The Latest

18 March 2021: Zoho is a privately held, Indian, Cloud-based CRM vendor that has grown rapidly internationally. It has just turned 25 years old. While it’s CRM suite is not as sophisticated as that of SalesForce, it is supported by a suite of low-code development tools and marketing-oriented modules for small to mid-sized business.

zoho timeline

Why it’s Important

IBRS has noted that many Australian organisations - in particular the public sector - are only short-listing Salesforce and Dynamics for modern CRM. This is often due to the research into available CRMs being exclusively limited to vendors in leading positions on US-focused market research papers, or advice from consultancies that only refer to such public materials.

To ensure the best suite at the best cost-point is selected, IBRS strongly recommends that the following be considered during the shortlisting process: 

  1.  Be sure to explore niche CRM products, as some of these may have a better fit or specific industry sector focus that can deliver benefits more quickly and at significantly lower costs than the leading products. Just because a solution as complex as a CRM is leading the market, does not mean it is necessarily the best for your organisation.
  2. When reading international reports, keep in mind that North America and Europe have different technology market ecosystems to Australia. In particular, skills availability (and therefore costs) differ. Be sure to factor in local issues.
  3. Carefully consider your starting point. How complex is your software environment? Factor your organisation’s networking infrastructure and the integration requirements both immediate and longer term.
  4. Leverage the channel capabilities and skills of local implementation partners. Implementation partners play a significantly greater role in a CRM’s successful implementation than the product itself. It is therefore vital that buyers not only consider the product in question, but also the available partners. 

The ultimate impact of limiting modern CRM (and related digital services) to the major vendors is that organisations may find themselves paying for far more than they need in a system, while also introducing more complexity into business operations than is necessary. 

IBRS is not suggesting that Zoho (or any of the other niche CRMs from the myriad available) is right for your organisation. Salesforce and Dynamics are exceptional products. However, many organisations do not need exceptional: they simply need more than good enough for their current and future needs, and they need it quickly and at the right cost point.

Who’s Impacted

  • CIO
  • Digital platform leads
  • Procurement teams
  • Business units executives

What’s Next?

Shortlists are critical for keeping procurement agile and within scope. However, do not short-change the shortlisting process by relying on generic reports that do not factor in:

  • specific industry needs
  • the Australian context
  • local channels and skills 

Related IBRS Advisory

  1. Trends for 2021-2026: No New Normal and Preparing For the Fourth-wave of ICT
  2. VENDORiQ: Salesforce Introduces Hyperforce
  3. Salesforce vs Dynamics
  4. CRM Modernisation Part 5: Microsoft Dynamics vs Salesforce Total Cost of Service
  5. IBRSiQ: Can IBRS Review Our Dynamics365 (D365) Licensing Calculations?

 

The Latest

20 March 2021: GorillaStack has released capabilities that allows it to monitor and apply governance rules to any external service that communicates with AWS EventBridge.

Why it’s Important

GorillaStack is one of the earliest vendors to address the complexities of Cloud cost management, having started in Australia in 2015 and moved to having strong growth in the international market. In May 2020, GorillaStack was acquired by the switzerland-based SoftwareOne.

Like its international competitors, GorillaStack moved from helping organisations monitor and optimise their Cloud spend, to monitoring the Cloud ecosystems for performance and security concerns. This recent announcement suggests that the next phase of growth for organisations in the Cloud cost optimisation space is not only to detect events in Cloud infrastructure, but also external services, and then apply rules to perform specific actions on those events. Such rules can not only automatically help reduce Cloud spend by enforcing financial governance directly into the Cloud infrastructure, but also helping to enforce security rules.

Who’s Impacted

  • CIO
  • Development team leads
  • Business analysts

What’s Next?

Cloud cost optimisation is already an important discipline for organisations with mature Cloud teams. Like software asset management (SAM), tools alone will not see organisations optimise their expenditure on Cloud services. An understanding of the disciplines required and setting up appropriate rules is needed. In addition, IBRS notes that many less-mature organisations have a ‘sprawl’ of Cloud services that need to first be identified and then reigned in before cost optimisations products can be fully effective. 

Related IBRS Advisory

  1. New Generation IT Service Management Tools Part 2: Multi-Cloud Management
  2. How to Get on Top of Cloud Billing
  3. Sourcing Monthly April 2020 – May 2020

The Latest

25 February 2021: Microsoft has announced a new industry Microsoft Cloud product suite. In short, Microsoft is pivoting to deliver vertical market Cloud offering for: Financial Services, Manufacturing, Non-profit and Retail on the back of the success with the Microsoft Healthcare Cloud. The primary purpose of these tailored industry solutions is to meet specific needs, breakdown silos and increase collaboration, productivity and efficiency within and across Industries.

Is this new or are we seeing a response to similar Cloud SaaS verticals from Salesforce and Netsuite?

Why it’s Important

Whether it is regulatory compliance or creating efficiencies, Microsoft is the latest to develop industry driven verticals offerings under the Microsoft Cloud banner. Whilst each MS Cloud solution addresses specific industry needs it also makes a concerted effort to take the existing Microsoft software products suites and add new capabilities to M365, Azure, Dynamics 365 and the Microsoft Power Platform. 

This level of investment by Microsoft in Cloud specific solutions should reduce the need for industries to invest heavily in their own solutions and instead adopt a common off the shelf SaaS solution. But will this provide competitive advantage for industries or will it make everything vanilla over time. Microsoft is planning continuous engagement with Industry leaders to ensure constant innovation so the industry Clouds do not become a one size fits all, set and forget approach. 

Who’s impacted

  • CIO
  • CDO
  • Digital Supply Chain
  • Enterprise Architecture
  • Software Architecture Leads

What’s Next?

Monitor the release of these industry specific Microsoft Cloud solutions in March 2021. As with Microsoft Power Platform products, much of the pricing remains a mystery for these Cloud offerings. By all means get access to release information and hopefully a private preview from March 2021 so you can see if the industry solution really meets your business needs.

Related IBRS Advisory

  1. Book at an advisory session to explore how Microsoft’s Strategy impacts your organisation
  2. Pros and Cons of Going All-In With Microsoft
  3. Google Workspace for Education - From Free to Fee
  4. Oracle’s new federal government Cloud capabilities

There is more innovation going on behind the scenes in Australian organisations than they are being given credit for. IBRS advisor, Dr Joseph Sweeney, who specialises in the areas of workforce transformation and the future of work stated, Australian organisations have led the world in the uptake of virtualisation which now has Australia leading in terms of Cloud adoption. 'World-leading Australian innovation was emerging in how Cloud-based services could be used to make internal operations more efficient, which was less glamorous than some of the consumer-facing apps being developed by emerging fintech companies, but equally worthwhile." said Dr Sweeney. 

“One area of innovation IBRS has identified over the last year is a rapid update of low-code platforms to allow less-technical staff to be involved in digitising business processes,” he said. Citizen developers aren't just limiting themselves to e-forms but are using a full range of low code tools and vendors are reporting sales growth of over 30%.

Full story.

The Latest

15 February 2021: IBM has unveiled the new Power Private Cloud (PPC) Rack solution which offers converged infrastructure with a focus on migrating legacy on-premises apps running on its POWER9/AIX systems to a Cloud-like infrastructure.

What’s Included

The PPC is effectively pre-built, pre-configured Cloud-like infrastructure for running containers. 

The PPC Rack consists of three POWER System S922 servers with 20 CPU cores, 256GB of RAM, and 3.2TB of local storage, the FlashSystem 5200, with a minimum of 9.6TB,  and twin SAN24B-6 switches with 24 Fibre Channel ports. The solution is pre-installed with Red Hat Enterprise Linux 8, IBM PowerVM Enterprise Edition, IBM Cloud PowerVC Manager, Red Hat OpenShift Container Platform, and Red Hat OpenShift OpenShift Container Storage (OCS).

Why it’s Important

IBM’s new offer is effectively a container-centric, Cloud-like hyperconverged infrastructure (HCI) similar to that offered by HPE, Dell, Lenovo, VMware, and Nutanix. More importantly, IBM is offering this at an easy target - its existing customers with legacy POWER9/AIX/i solutions looking to migrate to a Cloud-like environment with OpenStack.

For IBM clients, it presents a low-risk opportunity for extending the life of legacy applications, while modernising the environment. 

Who’s impacted

  • CIO
  • Development team leads
  • Business analysts

What’s Next?

Organisations moving legacy solutions into hyperscale Cloud infrastructure (IaaS) to meet the objectives of ‘Cloud first’ strategies have found that the proposed cost savings are not always present, and operational risks due to skills shortages can emerge. The rise of next-generation hyperconverged offering Cloud-like management is a response to this challenge. 

IBM’s new offering shows how this grandfather of the industry, with a massive backlog of legacy solutions, will seek to re-secure its client’s investment in solutions, while smoothing the transition to Cloud-like architectures. 

Related IBRS Advisory

  1. VENDORiQ: Woolworths Selects Dell Technologies Cloud to deploy hybrid Cloud strategy
  2. Running IT-as-a-Service Part 49: The case for hybrid Cloud migration
  3. Running IT-as-a-Service Part 50: Hybrid Cloud migration – Where is the money saving?

The Latest

17 February 2021: Google Apigee announced the release of Apigee X, its latest edition of its API management solution.

Why it’s Important

IBRS has found that the topic of APIs has moved out of the boiler room to the boardroom. During a series of roundtables with CEOs, CFOs and Heads of HR in late 2019, IBRS noted that many of these executives were advocates for ‘API enabled enterprise solutions’. Upon further questioning, these non-technical executives were able to accurately describe the core concepts and purposes of APIs. Much of their knowledge had come from engagements with combined SalesForce / Mulesoft sales teams. During 2020, the demand for rapid digitisation of processes with low-code platforms further raised the profile of API usage.

Expectations for APIs are high. Meeting those expectations demands a structured approach to management of APIs, and the ability to report on their usage. 

Who’s impacted

  • CTO
  • Software development teams

What’s Next?

Consider how the topic of APIs - which many executives see as critical for evolving business functions, or even a building block of digital transform efforts, needs to be communicated within the organisation. Explore how the adoption of low-code platforms both within and tangential to the ICT group will further expand the use of APIs. If not already available, put in place a roadmap for the introduction of API management capabilities, factoring both governance issues and supporting technologies.

Related IBRS Advisory

  1. Architectures for Mobilised Enterprise Applications
  2. Running IT-as-a-Service Part 15: Traditional enterprise architecture is irrelevant to digital transformation
  3. IBRSiQ: Can IBRS advise on the pros and cons of best of breed combined EAM/ERP vs fully integrated ERP/EAM?
  4. The impact of Software-as-a-Service on enterprise solutions: Why you must run IT-as-a-Service
  5. Enterprise resource planning (ERP) Part 2: Planning the ERP strategy for modernisation
  6. How to succeed with eforms Part 4: Selection framework
  7. Making the case for enterprise architecture

The Latest

In late January, Google presented a detailed report entitled “Operating the cleanest cloud in the industry” to analysts. The private briefing detailed Google’s current status as a ‘net zero-carbon emitter’ (meaning it offsets any carbon emissions from its current operations with other programs). It also outlined its plans to be running entirely on carbon-free energy by 2030. 

Why it’s Important

All of the hyperscale Cloud vendors - Google, AWS, Microsoft, Oracle and Alibaba - have well-documented strategies to reduce their reliance on carbon-based fuel sources. Their strategies are all similar and simple: reduce energy consumption (with accompanying higher computing density) and development of renewable energy sources as part of data centre planning. Their efforts in this area are not just for environmental reasons, there are significant cost benefits in the immediate term to being free of fossil energy supply chains. All also see competitive advantages, not just against each other, but against on-premises data centres.

As these Cloud vendors announce not only net zero-carbon emission targets as being met, but zero carbon energy targets, the issue of sustainable ICT will once again start to emerge as a serial consideration for CIOs and data centre architects.  

IBRS and BIAP (via the IT Leaders Summits) have tracked CIOs interests in the topic of green IT. An IBRS study in 2008 had sustainable ICT being rated as “very important” for 25% of CIOs and “somewhat important” for 59% of CIOs. Since then, interest in sustainable computing has plummeted year-on-year. The IBRS / BIAP data for 2016 had 6% of CIOs rating sustainable ICT as a priority. By 2020, less than 0.5% of CIOs rated sustainable ICT as a priority.

With the growing call for action on climate change and the economic advantages the hyperscale Cloud vendors will have by moving to carbon-free energy sources, the pressure to provide sustainable ICT metrics will re-emerge.

Who’s impacted

  • CIO
  • CFO
  • Data centre leads
  • Infrastructure architects

What’s Next?

CIOs and infrastructure leads for organisations running on-premises services / data centres should expect a swing back to discussions of sustainability. However, unlike the 2000’s, the benchmarks for sustainability will be set by the hyperscale Cloud providers. By 2025, all Cloud vendors will start using their leadership in sustainable ICT as a selling point for policy-makers to mandate Cloud computing, or possibly even place unattainable goals for architects of on-premises data centres.

Rather than waiting, CIOs should review previous strategies for sustainable ICT, with the expectation that these will need to be updated and reinstated within the next 3-5 years.

Related IBRS Advisory

  1. The Status of Green IT in Australian and New Zealand (2008)
  2. Building your Green IT strategy
  3. Think green IT: Think saving money
  4. Forget Green; think sustainable computing in 2009

The Latest

10 February 2021: Competition for highly secure hyperscale Cloud capabilities for government services has been boosted with Oracle joining forces with Australian Data Centres (ADC) to provide Canberra-based services. Oracle now has three Australian regions for managed Cloud, with Sydney and Melbourne.

Why it’s Important

Oracle’s Cloud service is highly attractive for organisations looking for a simpler Cloud transformation journey for critical, Oracle-based solutions.

Last year, Oracle’s SaaS solutions in the areas of security, human services, and health were certified as offering PROTECTED data capabilities. ADC has a strong presence in the Australia government, already running sensitive workloads and being connected to the secure Intra-Government Communications Network (ICON). By leveraging ADC’s footprint in Canberra, Oracle is now able to meet the second part of the trust equation: the physical safety of the environment.

Who’s impacted

  • CIO
  • Cloud migration teams

What’s Next?

Oracle now joins Microsoft in offering a specialised, highly secure Cloud capability for government agencies in Canberra. Agencies looking to quickly adopt a Cloud first strategy now have clear Microsoft and Oracle trajectories that include a physical presence, while AWS approaches the PROTECTED Cloud stance solely through a service-by-service model. When considering Cloud migration, agencies should review the extent of Oracle in their ICT architecture and factor this into the Cloud platform (or platforms) to be selected. 

Related IBRS Advisory

The Latest

16 February 2021: Veeam continues to expand its footprint across the hyperscale Cloud vendors with the introduction of Veeam Backup for Google Cloud Platform. This follows its December 2020 announcement when Veeam announced the general availability of AWS v3 Backup and Azure v4 Backup. As a result, Veeam now provides backup and recover capabilities across - and just as importantly between - the three major hyperscale Cloud vendors. 

Why it’s Important

During a briefing with IBRS, Veeam detailed its strong growth in the Asia Pacific region. It also discussed its strategy for providing backup and recovery capabilities over the major hyperscale Cloud services: Azure, AWS and Google. The demand for Cloud backup and recovery is growing with greater recognition organisations adopting hybrid Cloud (the most likely future state for many organisations) demands more consistent and consolidated approaches to management - including backup and migration of data between Clouds. VMWare is seeing growth in its hybrid Cloud management capabilities as well, and the synergy between Veeam and VMWare productions is no coincidence.  

Who’s Impacted

  • Cloud architects
  • Business continuity teams

What’s Next?

Backing up Cloud resources appears to be a simple process. Taken on as service-by-service, this might be true. However, in reality the backup becomes increasingly challenging. As more and more applications are made up of a myriad of components, this leads to a rapidly evolving ecosystem of solutions. Hence, data recovery and restoration are also getting more complex. This is further exacerbated by the growing adoption of hybrid Cloud. 

Organisations need to explore backup and recovery based on not only current state Cloud architecture, but possible migration between Cloud services and where different integrated applications reside on different Cloud platforms.

Related IBRS Advisory

Conclusion: Agility to respond to change has become essential. Compared with previous years, CIOs are expected to produce results over longer periods of time, now expectations have become much higher. Stakeholders are expecting results as soon as possible. With the trend geared towards an increase in technology dependence, the pressure of delivering results has therefore increased for CIOs and IT leaders.

Part of this new set of expectations is improved efficiency and productivity, which in most cases requires a thorough evaluation of business processes to garner potential inefficiencies. One of the primary tools organisations have at their disposal is the enterprise resource planning (ERP) systems. Eventually, it all boils down to whether or not the migration to S/4 HANA can be justified in terms of value-add-services. Implementation effort and run costs are only a part of the business case, not the whole.

Conclusion: To improve call centre resources scheduling, some organisations have implemented software agents to either improve users’ experience and/or reach the right expert at the right time. However, self-service success depends on the quality of information available to the software agent and its analytical ability to provide reliable recommendations. Any deficiency in these resources will leave the software agent with no alternative but to call the live agents, thereby making the investment in agent technology questionable. Organisations should assess the software agent maturity and determine which level should be reached to fulfil the business imperatives. This note provides a self-assessing approach to address software agent shortcomings.

The Latest

2 December 2020: Salesforce introduces Hyperforce. This move is a re-architecture of Salesforce’s design to continually support its global customer base. It has B2B and B2C performance scalability, built-in security, local data storage, and backward compatibility.  

Hyperforce allows Salesforce solutions to be run on a hyper scale Cloud service based on the client’s choice. These solutions include:

  • Sales Cloud
  • Service Cloud
  • Community Cloud
  • Chatter
  • Lightning Platform (including Force.com)
  • Site.com, Database.com
  • Einstein Analytics (including Einstein Discovery)
  • Messaging
  • Financial Services Cloud
  • Health Cloud, Sustainability Cloud
  • Consumer Goods Cloud
  • Manufacturing Cloud
  • Service Cloud Voice
  • Salesforce CPQ and Salesforce Billing
  • Customer 360 Audiences

Why it’s Important

Being able to move a SaaS solution to the Cloud based on client's preference, is a radical departure from convention for most major SaaS vendors. It is likely to be followed by other SaaS solution vendors, though Oracle’s close ties with Netsuite and Microsoft Dynamics with Azure, suggest Salesforce’s two main rivals will not be following this strategy any time soon.

This is a long-overdue overhaul for the entire Salesforce architecture as it needs to offer both architectural and commercial elasticity to aid customer’s global digital transformation.

It solves data sovereignty issues and provides all the advantages of using public Cloud resources. It also reduces implementation time despite being an enhanced architecture designed from the ground up to help customers deliver workloads to the public Cloud of choice.

Who’s Impacted

  • CIOs
  • CTOs
  • CRM leaders
  • Salesforce developers

What’s Next?

While the Hyperforce announcement is welcoming, there are still loopholes in the horizon. The solution is not available for on-prem implementations of the major Cloud vendors. Meaning, Hyperforce is not a path to an on-prem or hybrid Cloud solution.

For Australian organisations that aim to gain more control over how Salesforce stores information, either for compliance or cost control, to bring it closer to other Cloud services, Hyperforce is worth considering. It offers greater flexibility but also comes with a greater need for managing resources and costs. 

Before making any decision on moving to Hyperforce, Salesforce clients should have clear understanding of the following migration aspects:

  • Who will do the migration (i.e. the client or Salesforce)?
  • Who will deal with the public IaaS provider on a daily basis?
  • How will the current service cost be impacted?
  • Who will be responsible for the service management of public IaaS including the service desk?
  • What are the new risks that should be identified and mitigated?
  • Are there any changes to the current backup arrangements?
  • Are there any changes to the disaster recovery and business continuity arrangements?
  • How will the current change management arrangements change?
  • How the exit fees might change?

Related IBRS Advisory

The Latest

8 Dec 2020: AWS has announced plans to open a second region in Australia in the second half of 2022. This venture will consist of three availability zones supporting hundreds of thousands of AWS customers. This promotes lower latency, enhanced fault tolerance, and resiliency for critical Cloud workloads. 

Why it’s Important

This is not a competitive response to Microsoft Azure, which already has several data centres across Australia. Instead, it is the result of Amazon's continuing growth in the market. AWS needs to build significant additional domestic capacity to meet expected demand up to 2025. Hence, doing so in a new location provides AWS an additional benefit with on-shore multi-zone resilience. 

A new AWS region in Melbourne will also fuel different organisation innovative efforts. Government, private organisations, and the education sector will continue to transform their research and development endeavours that aim to protect, prioritise and benefit people across the country.

Who’s Impacted

  • Cloud architects
  • Cloud engineers

What’s Next?

In practical terms, this move has little direct impact on most organisations’ Cloud strategies. However, it does provide an additional option for resilience for organisations that need to keep all data on-shore. 

Related IBRS Advisory

The Latest

8 Dec 2020: Veeam announced the general availability of AWS v3 Backup. This is a timely endeavour with the continuous growth of multi-faceted Cloud apps built in AWS that necessitates backup and disaster recovery solutions.

Veeam offers automated backup and disaster recovery solutions that provide additional protection and management capabilities for Amazon EC2 and Amazon RDS. There are two options to consider:

  • Veeam Backup for AWS - protects data housed on AWS using its standalone AWS backup and recovery solution.
  • Veeam Backup & Replication™ - safeguards and consolidates AWS backup and recovery with another Cloud, virtual or physical, across different Cloud platforms with unlimited data portability. 

Why it’s Important

Cloud backups are no longer an option. Competition now requires additional redundancy and security for businesses. This ensures that their important data is available and retrievable if and when disasters strike.

Backing up Cloud resources appears to be a simple process. Taken on as service-by-service, this might be true. However, in reality the backup becomes increasingly challenging. As more and more applications are made up of a myriad of components, this leads to a rapidly evolving ecosystem of solutions. Hence, data recovery and restoration are also getting more complex.

Who’s Impacted

  • Cloud architects
  • Business continuity teams

What’s Next?

Tech management should explore which Cloud services, both IaaS and SaaS, need to be backed up. Establish strategies and choose the appropriate interplay between these services. For a growing Cloud usage or a forecast usage growth, evaluate how the services can be backed up reliably. This is possible through knowing beforehand the important parts that may be reconstructed into a recovered state if needed. 

Related IBRS Advisory

The Latest

10 Nov 2020: CyberArk launches an AI-based Cloud entitlements manager. The solution combines principles of ‘least privilege’ and ‘zero trust’ to reduce risks of poorly configured access privileges for the major hyperscale Cloud platforms. CyberArk uses AI to determine the context and intent, which in turn provides risk assessment and recommendations for appropriate actions, and automation of remediation. 

Why it’s Important

Poorly configured privileges to Cloud solutions - in particular storage services - is a major cause of data breach. It is a significant risk for all organisations that leverage Cloud resources. Reviewing and maintaining privileges over resources is problematic, even with high levels of automation, because automation will only impact known entities in the environment, and can only address well-defined use cases. 

Who’s Impacted

  • CISO
  • Cloud Teams

What’s Next?

The use of Machine Learning algorithms to interrogate Cloud services and identify and remediate risks is a welcome addition to Cloud security management. While the efficacy of the CyberArk solution is not yet known, IBRS anticipates that this approach will be beneficial and at least provide an additional ‘check’ over sprawling Cloud environments.

Related IBRS Advisory

The Latest

2 December 2020: Salesforce Einstein is being extended into the Mulesoft automation and data integration platform. The newly announced Flow Orchestrator enabled non-technical staff to transform complex processes into industry-relevant events. The new AI-assisted MuleSoft Composer for Salesforce will allow an organisation to integrate data from multiple systems, including third-party solutions.

Why it’s Important

AI enables business process automation as a key technology enabler that favours organisations with a Cloud-first architecture. Salesforce will leverage its experience and connections with selling to organisation’s non-IT executives to secure a strong ‘brand leadership’ position in this space.

Who’s Impacted

  • CIOs
  • CTOs
  • CRM Leaders

What’s Next?

In mid-2019, IBRS noted a significant upswing in interest in Mulesoft and integration technologies more broadly from the non-ICT board-level executives. In particular, COOs and CFOs expressed strong interest in, and awareness of, process automation through APIs.  

Digging deeper, IBRS finds that Salesforce account teams, who are well-known for bypassing the CIO and targeting senior executive stakeholders, are also bringing Mulesoft into the business conversation. Also, Microsoft is expected to double-down on AI-enabled business process automation with the PowerPlatform. 

As a result, the addition of Salesforce Einstein AI into the discussion of automation and integration is expected to land very well with COOs and CFOs. 

CIOs need to be ready to have sophisticated discussions with these two roles regarding the potential for AI in process automation. Expectations will be high. Understanding the possible challenges of implementing such a system takes careful consideration. CIOs should be ready to build a business case for AI-enabled business process automation.

Related IBRS Advisory

Conclusion: Organisations wishing to re-engineer their old legacy systems to modernise their environments, leverage the power and cost-effectiveness of Cloud and prepare themselves for the future should explore the new SaaS offerings when developing their service go-to-market strategies and tenders.

The Latest

19 Nov 2020: During its annual summit, Snowflake announces a series of new capabilities: a development environment called Snowpark, support for unstructured media, row-level security for improved data governance and a data market.

Why it’s Important

Of Snowflake’s recent announcements, Snowpark clearly reveals the vendor’s strategy to leverage its Cloud analytics platform to enable the development of data-intensive applications. Snowpark allows developers to write applications in their preferred languages to access information in the Snowflake data platform.

This represents an inversion of how business intelligence / analytics teams have traditionally viewed the role of a data warehouse. The rise of data warehouses was driven by limitations in computing performance: heavy analytical workloads were shifted to a dedicated platform so that application performance would not be impacted by limits of database, storage and compute power. With Cloud-native data platform architectures that remove these limitations, it is now possible to leverage the data warehouse (or at least, the analogue of what the data warehouse has become) to service applications.

Who’s Impacted

Development teams
Business intelligence / analytics architects

What’s Next?

Snowflake's strategy is evidence of a seismic shift in data analytics architecture. Along with Domo, AWS, Microsoft Azure, Google and other Cloud-based data platforms that take advantage of highly scalable, federated architectures, Snowflake is empowering a flip in how data can be leveraged. To take advantage of this flip, organisations should rethink the structure and roles within BI / analytics teams. IBRS has noted that many organisations continue to invest heavily in building their BI / analytics architecture with individual best-of-breed solutions (storage, databases, warehouse, analytics tools, etc), while placing less focus on the data scientists and business domain experts. With access to elastic Cloud platforms, organisations can reverse this focus - putting the business specialists and data scientists in the lead. 

Related IBRS Advisory
Workforce transformation: The four operating models of business intelligence
Key lessons from the executive roundtable on data, analytics and business value

Conclusion: Despite decades of investment in new technologies and the promise of 'digital transformation', workforce productivity has languished. The problem is that technological change does not equate to process nor practice change. Put simply, doing the same things with new tools will not deliver new outcomes.

The mass move to working from home has forced a wave of change to practices: people are finally shifting from a sequential approach to work to a genuinely collaborative approach. And this work approach will remain even as staff return to the office.

The emerging wave through 2020 and beyond is process change: continual and iterative digitisation of process. Practice and process changes will be two positive legacies of the pandemic.

The Latest

13 Nov 2020: Google Cloud announced preview availability of a serverless Database Migration Service (DMS), which enables clients to migrate MySQL, PostgreSQL, and SQL Server databases to Cloud SQL from on-premises environments or other clouds. 

Why it's Important 

Refactoring applications to take advantage of Cloud-native databases is one of the fastest cost-optimisation opportunities for organisations migrating to Cloud services. Cloud-native databases offer cost-efficiencies in both technical terms (e.g. storage costs) and operational savings (e.g. auto-tuning and scaling). However, the cost of migrating can be a sticking point in the development of business cases, especially where specialised outside help is required. 

Google DMS addresses the above by simplifying and reducing the cost of database migration. It eliminates the need to provision migration-specific compute resources.

Azure and AWS have their own database migration approaches, and even though Google’s solution is in its infancy, it has a solid road map.

Who’s Impacted

Organisations with Adobe Marketing Cloud and related investments, and Workfront customers.

  • Enterprise Architects
  • Cloud Migration / Strategic leads

What’s Next

Organisations with Cloud migration strategies should be comparing how to not only optimise the cost of running Cloud databases, but also the cost and agility of migration. This consideration should not rest upon one use case, but assume that an increasing number of databases will be migrated over time, both from on-premise and from other Cloud providers.  

Close ‘like-for-like’ calculations suggest that Google’s MySQL database services are lower than that of both Azure and AWS, though direction comparisons are difficult given the number of possible configurations. Therefore, while Google is not a major Cloud player in the ANZ region (compared to AWS and Azure) it can be considered as an option for cost-optimisation in a multi-Cloud setting.

Related IBRS Advisory

Conclusion: Organisations using Microsoft Server licences should consider leveraging the full potential of recent developments in the AWS licence suite. For more than a decade, AWS Cloud services have provided different organisations reliable data servicing and fewer downtime hours. AWS suggests that it offers clients more instances and twice the performance rate on SQL servers compared to other Cloud providers. Clients will need to have a performance rating in mind to validate these services for their own use.

Over the past decade, AWS has sought to innovate its processes and features following customer feedback. For example, the AWS License Manager was developed after customer feedback as a one-stop solution that manages usage limits and enables IT licensing optimisation across a variety of software vendors and across hybrid environments. It is important for customers to compare this licence management solution with other Cloud providers to validate the additional benefits.

Conclusion: SAP ECC on-premise versions required ownership of ERP infrastructure and multi-year licensing. The business cases for such investments considered ERP systems essential to remain competitive in IT service industries, logistics and resource-intensive sectors.

The next stage of the SAP journey recognises that Cloud infrastructure associated with S/4HANA can remove the large capital investment and reduce operating costs. Even with this infrastructure saving, the data migration risk remained with CIOs looking to identify a reliable data migration method. Any data migration considered to be high risk should be avoided in the current environment. Many are unfamiliar with the best method to migrate from on-premise SAP solutions to SAP S/4HANA in the Cloud.

SAP and its partners are now making this data migration journey not only more transparent but achievable in a timeframe that is measured in months not years. This is being achieved through Cloud platforms that can interrogate and integrate legacy data, then present migration paths in real time whilst retaining the data integrity before, during and after the migration.

Conclusion: Growing use of SaaS-based, low-code application development platforms will accelerate digital process innovation. However, embracing citizen developers (non-IT people who create simple but significant forms-based applications and workflows) creates issues around governance: including security, process standardisation, data quality, financial controls, integration and potentially single points of failure. There is also a need for new app integrations and service features for its stakeholders that need to be addressed before the potential for citizen developers can be fully realised.

If governed properly, low-code platforms and citizen developers can accelerate digital transformation (or at least, digitisation of processes) and in turn alleviate the load on traditional in-house development teams.

Conclusion: A Cloud strategy can take many forms. Whether you select a private Cloud, hybrid Cloud (on-premise with Cloud elements), native Cloud or a multiCloud implementation will impact the framework of your strategy. The success of your strategy will be driven by the motivation your organisation has to elect the move.

If your only motivation is the perceived cost model where you reduce capital in favour of operational expense, and potentially see savings based on usage, you are unlikely to succeed. The need to have a clear business strategy on why Cloud, what opportunities it may bring the business, and how to transition, manage and exit the Cloud is essential to see the true benefits.

Key to a successful strategy is to use an effective framework that allows your organisation to migrate to, operate and govern the engagement, and exit the engagement. A Cloud strategy is a commercial arrangement. Understanding the business benefits of entering into a Cloud contract engagement and being able to measure success factors is equally as important as the selection of providers for functionality and cost. It is important that you step into Cloud with your eyes wide open.

Conclusion: IT organisations wishing to migrate to Cloud should adopt a pragmatic approach that strikes a balance between migration cost, Cloud risks and benefits. The bottom line is to avoid the hidden cost (e.g. scope changes), mitigate the migration risks (e.g. effective multi-Cloud management) and realise the benefits that contribute to business performance improvement. Effective governance of the overall Cloud migration is a critical success factor.

Conclusion: Cloud services have now been around for over a decade and since that time many of the services available have evolved in both scope and maturity. Most organisations now have a range of services in the Cloud and many have adopted a ‘Cloud first’ strategy for new solutions to business problems. However, this reactive approach runs the risk of not leveraging the full potential of Cloud services and creating fragmented infrastructure and applications which inhibit the rapid response to business problems and increase costs in the longer term. What is required is a deliberate strategy which maps out the transition to Cloud at infrastructure, platform and application levels and is integrated with enterprise IT. Given the scale, scope and risks of the strategy, executive and board alignment is critical as is the implementation of appropriate governance.

Conclusion: IT organisations challenged with predicting performance requirements of new digital applications should undertake end-to-end stress tests that can detect systems performance problems prior to production release. Test results should be used to define the final release dates, prepare corporate investment justifications for improving the application architecture and influence the ongoing capacity planning practices. Successful execution of the initial performance engineering exercises will result in sound deployment strategies and avoid media embarrassment. The specification of the stress tests should be clearly described in any request for proposals. The chosen vendors should have the capability to scale the new systems to the desired performance specification.

Conclusion: Delivering mature infrastructure services depends on many factors. For example, the service levels may vary significantly. Some organisations opt for non-stop operations, others seek basic service levels that allow up to one hour unscheduled downtime per month (or more). The key challenge facing IT organisations reviewing their infrastructure is to strike a balance between service level, cost, quality and risks. To address this requirement, IBRS has developed an Infrastructure Maturity Model1 to help organisations understand the service components dependencies before selecting an infrastructure alternative.

Conclusion: While release and change management processes have been contributing to good service availability during the last 20 years, the increased service architecture complexity caused by adopting multiple Cloud and digital services has demonstrated that release and change management methods used to date are inadequate for the new world. As a result, end users have been experiencing unscheduled downtime that has impacted their business operations and led to embarrassment in the media. This research publication provides guidance on how to raise the maturity of release and change management processes to address these critical issues.

Conclusion: The increased use of technical point-solutions has created the need for establishing an in-house core team of generalists capable of defining a coherent set of services that can improve the overall business performance. The key obstacle to building these strategic skills is the IT managers’ attitudes towards assigning work to existing staff. For example, IT managers tend to heavily exploit the existing skills of the technical staff to address specific requirements. Managers rarely give staff the chance to build new strategic skills that are beneficial to themselves and to their business.

Managers should strike a balance between strategic skill building and technical skill exploitation. This requires helping staff to acquire a deep understanding of the business operations, gain awareness of industry latest trends and offerings, and becoming capable of defining ICT solutions that can fix critical business problems.

Conclusion: Running IT-as-a-Service requires emulating vendors’ account management function by creating a business relationship manager (BRM) role. The role’s rationale is to provide strategic advice to business stakeholders and act as a single point of coordination between IT groups and business lines. BRM’s focus is to manage the relationship with business strategists and recommend IT solutions relevant to business performance improvement and cost reduction initiatives where applicable.

Conclusion: The success of digital transformation, hybrid Cloud deployment and multi-service providers’ governance largely depends on IT services being integrated and managed in a unified and standard way. Service integration and management (SIAM) is an approach to address this requirement. However, its full implementation is a massive undertaking covering delivery processes, organisational structure changes, service cost tracking, service skills and an effective deployment of end-to-end management tools. This note recommends a quick win approach that focuses on getting the service essentials fulfilled depending upon the status of external services used by an IT organisation.

Organisations that are resisting the shift to Cloud computing are often basing their decisions on common misconceptions around security, price and integration.

That’s a key finding in a recent report conducted by IBRS, The State of Enterprise Software Report 2019.

The Security Myth

Many of the organisations surveyed declared security as the primary reason for not moving to Cloud services.

Concern over the security of systems — and, critically, of the data they hold — was common in the early days of Cloud computing and it seems at least some of that legacy remains. But it’s a myth.

Dr Joe Sweeney, author of the report said cloud service providers exceed most organisations’ budget and capacity to manage complex cyber security risks.

That’s certainly the view of the Commonwealth Government, which is moving to Cloud-delivered enterprise solutions aggressively.

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Conclusion: External Cloud services can realise cost reduction up to 50 % p. a. and promise no set-up or exit fees. While the ongoing cost reduction is realistic, there are significant other costs related to third-party services that should be considered to calculate the overall cost saving of Cloud migration. They are:

  • Transition-in cost due to the use of external consulting services to set up the new environment (up to $2.5 million for 7,000 users), as well as procurement cost to prepare tenders, select vendors and negotiate contracts (up to $300,000)
  • Transition-out fees to migrate the current service to another service provider (similar to transition-in cost)
  • Hardware depreciation related to private Cloud exit
  • Governance fees to ensure Cloud consumption remains within budget and the desired service levels are tracked and met (up to 7 % of the annual cost)
  • Risk mitigation strategies to ensure the Cloud service remains secure.

The purpose of this research note is to provide a step-by-step approach to determine the ongoing cost-saving opportunities needed for Cloud migration business case1 preparation.

Conclusion: Some ICT strategies are technology-centric while others are business-centric. The technology-centric strategies are usually developed without business stakeholders’ involvement resulting in limited business buy-in. Business-centric strategies are based on business strategies but have a short life-span. This is because market forces require business strategies to change frequently. IBRS recommends that ICT strategies be derived from business and IT guiding principles.
The rationale is that guiding principles have a longer life-span than business strategies and can deliver the desired outcome such as:

  • leveraging new technology
  • involving business stakeholders in the development process
  • realising business value in a timely and cost-effective manner.

Conclusion: Public Cloud is not the solution to all IT organisations’ technology and services problems. This is because most IT organisations use a portfolio of environments such as legacy systems, in-house and outsourced services, customised IT service management tools and standard applications (e. g. email) that cannot be all retrofitted in a public Cloud architecture without major rework. As a result, hybrid Cloud has become the preferred direction because it allows the multiple environments to co-exist in a cost-effective manner. However, a convincing business case is needed to gain business and IT senior executives’ sponsorship to adopt hybrid Cloud. While Cloud migration benefits and risk mitigation are critical success factors, the deployment-hidden cost is a major contributor to failure. The objectives of this research note are to provide a framework1 to develop the business case and to ensure its cost includes the following:

  • Hybrid Cloud strategy development,
  • Risks identification and mitigation,
  • Go-to-market strategy, providers’ selection and contract negotiation, and
  • Ongoing governance to realise the desired business benefits. This can reach up to 7 % of the yearly cost.

Conclusion: IT organisations wishing to create value should initiate selling processes to define business needs, establish SLAs for mission-critical systems and provide IT solutions to key business issues. This will result in boosting IT staff confidence and managing business lines’ expectations more effectively.

Related Articles:

"Importance of a balanced ICT investment portfolio" IBRS, 2018-09-04 13:42:25

"Running IT-as-a-Service Part 47: IT value creation accelerated approach – phase 1" IBRS, 2018-10-04 13:01:03

 IBRSiQ is a database of client inquiries and is designed to get you talking to our advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.
 

Conclusion: IT organisations wishing to create value are challenged by long implementation time-scales and inability to change the business perception of IT capability. To address these challenges, IT organisations should adopt an accelerated approach by deploying key processes within a six-month period, to demonstrate service quality and commitment to meet business needs in a rational fashion. Failure to do so will brand IT as a support function, and will make IT desire to earn strategic partner status virtually unachievable.

Related Articles:

"Benefits management: Keeping it real" IBRS, 2018-07-05 03:02:17

"Importance of a balanced ICT investment portfolio" IBRS, 2018-09-04 13:42:25

"SNAPSHOT: Agile services spectrum" IBRS, 2018-05-04 19:10:01

Conclusion: IT organisations revisiting their service contracts as a result of mergers and acquisitions should establish a federated vendor management arrangement. The rationale is to ensure central consistency while retaining local autonomy to address tactical matters. For example, the central consistency demands leveraging the economy of scale to reduce cost, whilst the local autonomy allows the extension of services scope to cover local requirements without the need to change the local vendor management arrangements. However, the local autonomy should be governed by verifiable policies.

Related Articles:

"Delivering IT-as-a-Service requires an Enterprise Architecture for IT" IBRS, 2017-09-02 01:42:22

"Mergers, Acquisitions and Divestitures: What does it mean to your business?" IBRS, 2017-01-01 10:35:33

"Running IT as a Service Part 1: Prerequisite Building Blocks" IBRS, 2014-10-01 18:33:12

"What to do when your vendor gets acquired" IBRS, 2003-07-28 00:00:00

Conclusion: Given that multi-Cloud is a combination of public/private Cloud and customised systems governed by in-house and/or outsourced arrangements, end-to-end service level management becomes a critical success factor. IT organisations should implement a complete set of service level practices covering people, processes and systems that allow IT organisations to efficiently deliver services in accordance with service level agreements (SLAs).

The SLAs should span across the full service lifecycle. Service level foundation requires defining the:

  • services provided
  • metrics associated with these services
  • acceptable and unacceptable service levels
  • liabilities on the part of the service providers and the buyer, and
  • actions to be taken in specific circumstances.
Related Articles:

"Running IT-as-a-Service Part 38: Successful hybrid Cloud requires multi-provider governance framework" IBRS, 2018-02-01 10:08:33

"Running IT-as-a-Service Part 42: Incident and problem management integration is critical for hybrid Cloud" IBRS, 2018-06-01 04:14:55

Conclusion: During the last two decades, service desks delivery had the following shortcomings:

  • The service desk voice communication channel was characterised by a long waiting time to connect with service desk staff.
  • Service desk staff with limited skills minimised the number of issues resolved at the first point of contact.
  • There was a lack of online channels and limited self-service offerings, e.g. password reset.
  • The service charges were based on the number of incidents that discouraged providers to reduce the number of incidents.

To address these shortcomings, IT organisations should transform to Service Desk-as-a-Service. It should be powered by self-service virtual agents that can identify most of the solutions without the need to connect with service desk officers. The charges should be based on the number of users instead of outages to encourage providers to address outages’ root causes. Online services covering reporting on issues and following up progress should be favoured over voice communication.

Related Articles:

"Can IBRS identify what Service Desk software is most prevalent in Australia?" IBRS, 2017-04-30 11:16:50

"Running IT-as-a-Service Part 25: Understanding the cost drivers of Application-as-a-Service" IBRS, 2016-12-03 02:41:03

"Running IT-as-a-Service Part 43: Service level penalties and incentives for hybrid Cloud" IBRS, 2018-07-05 03:11:03

Conclusion: Penalties and incentives are designed to ensure agreed critical service levels are achieved. Penalties are enforced whenever service levels are not met. Incentives are rewarded whenever agreed service levels are exceeded. However, there are cases whereby providers prefer to pay the penalty instead of improving the service level. For example, it is easier to pay a penalty of $10,000 instead of fixing a service issue that might cost $50,000. The purpose of this note is to prevent such situations from occurring and maintain the focus on meeting the service level in all circumstances.

Related Articles:

"Public Cloud Success requires Mature Governance" IBRS, 2014-01-30 00:00:00

"Running IT-as-a-Service Part 31: Maximising relationship management ROI" IBRS, 2017-06-04 03:41:00

"Running IT-as-a-Service Part 38: Successful hybrid Cloud requires multi-provider governance framework" IBRS, 2018-02-01 10:08:33

Conclusion: Traditional outsourcing and managed service contracts primarily focus on incident management service levels and give little attention to problem management. For example, incident management service level might be 95 per cent of Severity 2 outages resolved within four hours. In general, a temporary fix is sufficient to meet the incident management service levels. However, this might not prevent the outage from reoccurring because the outage root cause was not addressed. To address this issue, problem management root cause analysis must be used. This necessitates the integration of incident and problem management to govern multi-providers’ activities managing hybrid Cloud1.

Conclusion: Private Cloud1 managed by an as-a-Service contract has become the inevitable replacement of managed services arrangements. The main difference is that an as-a-Service contract is charged on consumption instead of on a fixed price basis and the service levels are tightly linked to end user experience and delivered at a lower price. However, unlike the common perception that Cloud migration is relatively easy, transitioning to private Cloud still requires thorough planning especially whenever the scope covers the full IT functions.

Conclusion: Business continuity and disaster recovery plans are largely developed in isolation. The result is ineffective recovery arrangements that do not meet the fundamental business needs. With the variety of Cloud service continuity solutions, IT organisations should initiate a unified business and IT continuity project to intimately involve business units in defining and deploying complete service recovery facilities, including mitigating the risks such as ransomware attacks and the lack of SaaS escrow1 services. This will tightly couple recovery services to business imperatives. The use of Cloud for service continuity (which was not available eight years ago) will reduce the overall cost of recovery.

Conclusion: Many IT organisations have adopted business transformation1 strategies to help their businesses increase revenue. However, while digital transformation has succeeded in making the communication with the enterprise more convenient (e. g. mobile applications), it has been difficult to substantiate digital transformation contribution to the financial performance improvement. As a result, justifying new software projects has become more difficult. It is recommended to shift the digital transformation focus from technology point solutions to building quality products and services that increase profit and elevate customer satisfaction. The success should be measured by increased sales instead of only technology charms.

Conclusion: Many Cloud service providers manage their own systems but do not take any responsibility for working with other providers in a multi-sourced environment. As a result, IT organisations wishing to maximise the benefits of hybrid Cloud should develop a governance framework to address technology integration issues, optimise the interaction among service providers managing the multiple Clouds and define policies to operate in a multi-sourced environment. This will ensure business operations remain unaffected by service providers’ potential disputes.

Conclusion: One strategy to implement IT-as-a-Service models is to focus on business efficiency improvement. This requires shifting focus from addressing IT internal issues (e. g. operating system upgrade) to improving business operations. It requires building IT skills and capabilities to leverage the emerging IT trends, technologies and services in the areas of artificial intelligence, analytics, Internet of Things, cognitive learning and multi-Cloud management.

Conclusion: One strategy to implement IT-as-a-Service models is to focus on efficiency improvement. This requires shifting focus from control to service improvement. The outcome will be end-user experience enrichment, cost reduction and business/IT operations synchronisation. Failure to do so will force IT to remain a utility provider offering insignificant innovation and playing a negligible role in business transformation.

Conclusion: The future of customer service will rely heavily on automating assistance with targeted empathy1.

Expect virtual digital assistants to heavily reduce the need for contact centre services and become the preferred choice as a CX channel.

Amazon’s $100 million investment2 fund to drive innovation in Alexa and its large installed base will advance Alexa and consumer digital assistant Echo capabilities rapidly3.

Treat Amazon Web Services’ (AWS) new “Connect” Contact Centre-as-a-Service (CCaaS) product as a complementary customer experience (CX) tool. Expect Connect to operate as a Trojan Horse for more complete AWS AI and CX solutions inside AWS customers’ operations.

Within two years it should be clear that AWS Connect has provided a significant point of inflection in the direction and functionality of global contact centre operations and the use of blended virtual digital assistants for voice navigation in CX. This is because in future, ecommerce or any customer service supported by separate or poorly integrated merchandising and buyer assistance platforms will be thoroughly unacceptable to end users4. A seamless fully blended CX56 will have become the (minimum) norm.

 IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

Conclusion: One strategy to implement IT-as-a-Service models is to outsource the IT delivery capability to multiple service providers. However, the IT organisation remains accountable for the success of the outsourced arrangements. This requires the IT organisation to have a mature procurement and service provider governance function. The rationale is to acquire services and negotiate contracts that go beyond meeting the traditional IT needs to provide business innovation, performance improvement, cost reduction and risks mitigation covering IT and business vulnerabilities.

Conclusion: One strategy to implement IT-as-a-Service models is to build an in-house capability whereby the IT organisation is accountable for the full service delivery according to commercial practices. This requires the IT organisation to play the role of an internal service broker, expected to acquire external services and coordinate internal and external services delivery to meet the business needs. The service broker should at least be flexible, reliable and cost effective.

Conclusion: Preparing the modern business for Cloud requires a common computing and networking infrastructure with new Cloud architectures converging with data centres over a hybrid of both direct Cloud connections and traditional wide area networking.

Organisations must begin by conducting a “triage” of their applications into three networking categories: those in pure public Cloud deployment; a hybrid of public and private (“on-premises”) computing; and those that will never go to Cloud (such as legacy apps, or for regulatory or security requirements).

At Cloud-scale the network becomes a fabric that facilitates software-defined technologies1 (compute virtualisation, SD Storage, SD Networking and SD Security). Software-defined networking (SDN) abstracts network functions so that existing switches, routers and appliances can be made programmable to enhance their functions and reduce costs.

Eventually business IT processing will be delivered by SD Everything as all fundamental IT functions coalesce.

From today, businesses should be placing new emphasis on the “management” of their networking as both “virtual” and physical networks and plan to drastically reduce manual configuration and operation of networked IT as indicated below.

Conclusion: IBRS’ finding is that prominent Cloud marketplaces (CMPs) such as AWS Marketplace1, Microsoft Azure2, Google Cloud Platform3 and IBM Bluemix4 are gaining traction as alternatives to conventional enterprise ICT infrastructure and services sourcing.

Given the state of maturity of these marketplaces, they are currently only useful for quickly and conveniently locating and obtaining ICT infrastructure and microservices for use in low-risk small scale pilots or trials.

As wider take-up is underway with larger applications being adopted through AWS and Azure organisations should begin to prepare for a shift in the viability of enterprise-level solutions.

Our caution is that CMPs will not have profound impacts on enterprise ICT provision until both the IT and Procurement organisations within a business become satisfied that this approach has validity, value and is auditable5 and manageable.

Conclusion: Transitioning to hybrid Cloud might include migration from the current outsourcing contracts and some in-sourced activities to IT-as-a-Service models. The rationale is to accelerate efficiency gains realisation in a timely manner. One of the Procurement Manager’s options is to seek a service broker (e. g. prime contractor) to efficiently undertake the migration without disrupting the current business operations.

IT Procurement Managers should:

  • Establish governance arrangements underpinned by an effective organisational structure, tools and processes to select the service broker
  • Request the acceptance of the transition plan to become a prerequisite to contract signature
  • Manage the new contract until the business objectives are met

One of the migration critical success factors is a detailed transition plan covering the service provider selection and setting the foundation of a healthy relationship between both parties throughout the contract duration.

Conclusion: IT organisations initiating efficiency improvement programs should automate inter-process interaction, focus on measurement and refine inter-group communication. This will enhance service availability, reduce delivery cost and enrich end user experience.

Conclusion: IT organisations wishing to maximise the ROI of as-a-Service contracts must transform the relationship management role from contract focus (i. e. whereby the mindset is to create a win/lose scenario) to a value focus whereby business benefits are realised. This demands building advanced skills in negotiation, communication and consulting. It is also necessary to extend the Relationship Manager’s role to one which ensures as-a-Service policies are developed, security policies are adhered to and external providers’ deliverables are synchronised with those of internal service providers.

Conclusion: With the migration to complex hybrid sourcing strategies, traditional IT organisations based on ‘plan/build/run’ models will not be suitable for acquiring Cloud services in an increasingly changing market. This is due to a vague understanding of service total cost of ownership and limited contract negotiation and management skills. IT organisations wishing to rely on external services must evolve to ‘plan/procure/govern’ structure to emphasise strategic service planning and hire specialised service providers’ governance skills. This shift should ensure mutual trust and respect between parties, well-defined service levels and clear roles and responsibilities. IBRS estimates the cost of the governance structure and services to be 3 %-7 % of the annual contract value. This must be considered during the business case preparation.

Conclusion: Paying for Infrastructure as a Service (IaaS) which is kept on-premises, but paid for on an Opex model rather than as a Capex outlay, is often positioned as ‘Cloud-like’. There can be use cases and specific workloads where this model makes sense and does give some advantages to the organisation.

However, on-premises management of an organisation’s own Cloud can be lacking in the degree of flexibility and pace of innovation that can be achieved when compared to some of the larger and more successful public Cloud offerings such as Amazon Web Services or Microsoft Azure.

Organisations need to weigh up specific use cases and workloads and determine the optimal balance of when to use ‘on-premises’ Cloud versus public Cloud.

Conclusion: IT-as-a-Service is an initiative launched by IT organisations to fix an IT problem, whilst digital transformation is another initiative launched by business lines to fix a business problem. However, fixing both problems remains an enterprise’s critical issue. Hence, organisations wishing to remove the duplication between the two programs should unify both programs and ensure sufficient funds are available to implement the unified program in a timely and cost effective manner.

In this interview, Dr Wissam Raffoul outlines a practical and effective approach to migrating to an As-a-Service model. 

Sydney-based IT analysis firm IBRS has launched maturity assessment and methodology tools to assist organisations with the task of SaaS migration.

In order to improve business performance, or reduce the cost of doing business, forward-thinking IT organisations are trying to run IT as a service (ITaaS), said Dr Wissam Raffoul from IBRS.

“There are many challenges; for example, long software implementation time lines, fragmented delivery processes, as well as insufficient skilled resources to meet business demands,” said Dr Raffoul.

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Conclusion: While IaaS and PaaS adoption has been increasing, most IT organisations are hesitant to migrate their legacy systems to public SaaS. This is primarily due to the applications being highly customised resulting in a significant effort being required to retrofit existing systems to migrate them to public SaaS architecture in the Cloud.

Conclusion: There are distinct differences between traditional outsourcing, managed services and as-a-service contracts. Traditional outsourcing and managed services are input-based contracts with a fixed price based on the number of the supplier team members delivering the service, service levels that do not reflect business operations and significant financial penalties when exiting for convenience.

As-a-service contracts are outcome-based contracts, priced on a consumption basis, measured by service levels that reflect end-user experience and no exit fees.

IT organisations should analyse the advantages and disadvantages of each alternative whilst formulating their sourcing and Cloud migration strategies.

Conclusion: One of IT organisations’ objectives must be to reduce the total service cost of legacy applications by migrating them to a Cloud environment. However, achievement of the desired success largely lies in limiting the scope variations of Application-as-a-Service contracts and controlling the hidden cost drivers. This requires leveraging the lessons learnt in containing outsourcing cost and establishing flexible contracts in the legacy environment. Failure to do so may extend the legacy system lifetime and leave IT organisations with no alternative but to absorb the increased cost of application management on an ongoing basis.

Conclusion: The Total Cost of Ownership (TCO) was created two decades ago to provide visibility of the total cost of IT assets. It was targeted at IT organisations running an in-house mode of operations. While TCO can provide a good understanding of the internal IT asset cost, it could not estimate the cost per service because the IT budget was never based on service delivery. As a result, it was neither adequate to buy external services nor sufficient to assess the value that an IT organisation can bring to the business lines. IT organisations should adopt the Total Cost of Service (TCS) model to accurately estimate services’ internal costs, benchmark the external services cost and justify the services costs in terms of business imperatives.

Conclusion: Community Clouds can provide the expected value of using “Cloud”-based services in a shared environment that may be more economical than a closed private Cloud or privately owned and managed IT solutions. But economics may not be the driving factor. Identifying a common “customer” need or client base can be the main driver to getting similar organisations to agree to use shared resources or services.

The effort in getting organisations to recognise the opportunity to work together and to actually implement a community Cloud should not be underestimated. As in arranging car pooling, whilst the benefits may be clear, there is still the challenge of finding the other participants who all want to go to the same place, at the same time, and with agreed cost sharing. A “lead” organisation is necessary to help coordinate the required effort to create a Community Cloud.

Conclusion: The drive for digital disruption has forced many organisations to implement contact centres’ online chat facilities (or equivalent). The rationale is to instantly connect customers with service experts and to resolve inquiries at the first contact whenever possible. While customers enjoy the ability to initiate a chat anytime and from any device, the ability of service providers to resolve inquiries to customers’ satisfaction remains unfulfilled in many cases, especially in the telecommunication carriers industry. Organisations should realise that a digital transformation is not only about implementing online facilities; it requires significant business process re-engineering to improve end-user experience across all types of inquiries.

IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

Conclusion: IT organisations driving their business transformation should mature their as-a-Service capability to deliver IT services at commercial standards in a timely and cost-effective manner. This should lead to effective delivery through the integration of business and IT processes.

IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

Conclusion: Traditional disaster recovery plans do not mitigate risks against frequent software and hardware malfunction, nor do they integrate with business continuity plans. As a result, a production service may become unavailable for up to two days in certain cases (e. g. recovery from a database outage or data corruption). In the digital world, the business impact of such a failure will be significant as clients may place their orders with a competitor when they face an unavailable service for a prolonged period of time. IT organisations should deliver recovery-as-a-service that provides non-stop business operations.

Conclusion: There is debate within the IT industry whether or not DevOps can replace ITIL1. From ITIL perspective, many IT organisations, especially in Australia, have been implementing ITIL processes since 1994 with significant investment in technology and professional services. Hence, it is impractical to just drop ITIL and adopt DevOps. This is because firstly, DevOps covers only Release Management which is only one process of the 26 processes of ITIL v3 and secondly, DevOps in not different from mature2 ITIL Release Management. In this light, existing ITIL organisations embarking on digital transformation should plan to mature Release Management to match DevOps principles. DevOps3 sites need to leverage the lessons learnt from ITIL implementation to enjoy a smooth business transformation as fixing only the software release process without integrating this with the remaining 25 ITIL processes is insufficient to raise the overall IT performance to the level needed by the digital world. This research outlines that ITIL and DevOps can co-exist in the same organisation once brought to the right maturity level.