Public cloud services are a strategic weapon for CIOs. More than a way to cease operating data centers, the public cloud offers CIOs the ability to focus on strategic projects aimed at boosting the bottom line.
“As organizations pursue new IT architectures and operating philosophies, they put in place a foundation for new opportunities in digital business,” said Gartner analyst Ed Anderson in a blog post in January.
Whether that means building a mobile app or analyzing data to strengthen customer engagement, these shifts signal how strategic the public cloud has become. But CIOs also view cloud as a platform for building software faster by embracing agile and DevOps.
Thanks to enterprises’ emerging “cloud-first” strategies, spending on IaaS (infrastructure-as-a-service) will grow from $39.5 billion in 2019 to $63 billion through 2021, Gartner says.
IT leaders shared with CIO.com their experiences and lessons learned in making a strategic shift to the public cloud.
Finding room to grow in the cloud
Choice Hotels International CTO Brian Kirkland is migrating more than 1,000 applications, including its ChoiceEdge core global reservation system (GRS) and distribution platform, property management system and data analytics systems to AWS for more than 6,900 hotels worldwide.
Kirkland says that the move, which the company quietly kicked off in 2014, is affording Choice more flexibility with regard to performance and scalability as it expands its international footprint. Choice wants more hotels on the ground — not more server infrastructure and data center real estate, Kirkland says.
The move will free employees to focus on more business-critical tasks. "This partnership allows us to focus more on innovation opportunities and less on managing infrastructure," Kirkland tells CIO.com. "We want to provide more value for our guests and franchisees."
Choice has considerable company in the hospitality sector, for which AWS seems to have become a favorite residence. Wyndham Hotels and G6 Hospitality are making similar shifts to AWS with their reservation and property management systems, as CIO.com has previously reported.
Kirkland’s advice: The cloud can serve as the wellspring from which new innovation flows, so choose your platform wisely. For Choice, the cloud is largely a springboard for crucial data analytics initiatives, ostensibly to help personalize pricing for Choice's franchisees. “Data is an asset and will be a differentiator for our business,” Kirkland says.
Cloud enables agility for flood calculations
Hiscox, which specializes in insuring commercial buildings, is re-platforming its core U.S. systems onto Microsoft Azure to drive more efficiency in the company's DevOps processes, which includes new releases every two weeks, says CIO Ian Penny.
"It's not about whether cloud is cheaper than the data center; it's, Does it give you true business agility?" Penny tells CIO.com.
Hiscox balances workloads in a hybrid environment using analytics software from Turbonomic to balance application workloads between Hiscox's on-premises and Azure environments, Penny says. This enables the operations staff to focus on business delivery, while maximizing investment in hardware and minimizing surprise bills from cloud consumption.
Ideally, the move will help Hiscox generate more premiums through complex price modeling for new lines such as flood insurance, for which there are about 1 billion geolocations to calculate, Penny says. Calculations that would have taken 8 months in an on-premises environment now take 12 hours in an Azure batch computation.
"It's changing the conversations with the business" from tech as a constraint to tech as an enabler, Penny says.
Penny’s advice: If cloud is the enabling platform, agile and DevOps processes were the facilitators. Penny moved his teams from project-based to product-based management, assigning multidisciplinary agile teams affiliated with business lines to build software in two- to four-week sprint cycles. “You have to blur the lines between IT and the business,” Penny says. “It will fail if it's not done that way.”
IoT on the cloud regulates store temperature
Extending a long-running strategic partnership, Walmart is using Microsoft's Azure cloud software as a key component of its digital transformation, which includes tapping into machine learning (ML), artificial intelligence and internet of things (IoT) to improve business operations and business outcomes.
For example, Walmart is building an IoT platform on Azure to analyze data streaming from thousands of HVAC and refrigeration sensors, which could help reduce energy consumption across the retailer’s 5,000 stores, says Walmart CIO Clay Johnson. Using data based on the number of people in its stores at a given time, Walmart can automatically adjust the air conditioning. Walmart also expects to run ML algorithms on Azure to optimize the routes of its delivery trucks.
Johnson says Walmart will also move applications for HR and finance to Azure, making them more agile and in turn helping the company's 2.3 million employees make smarter decisions. "It all goes back to Azure," Johnson says, adding that he expects Microsoft’s cloud will spur innovation for both companies. "We’ll learn from them and they’ll learn from us."
Walmart is also testing Microsoft's MyAnalytics reporting tool, which helps Office 365 email users get a handle on how much time they spend on meetings and email. It also shows how many uninterrupted hours workers spend on key tasks, which colleagues they spend the most time working with, and how much time they work outside business hours.
Next up for Walmart: building a chatbot based on Microsoft’s Cortana business intelligence software, which it already uses to help employees find corporate information and to automatically schedule meetings.
Johnson’s advice: Once an enterprise is in the cloud, CIOs must ensure that they have a way to capture and analyze the data streaming off of connected systems, or they risk losing opportunity to create new value. “It’s about how to use that data to create more efficiency in work,” Johnson says.
Cloud fuels frictionless payments
Gas giant ExxonMobil is double-dipping with IBM and Microsoft as its strategic cloud providers.
Last year, it selected IBM to design, build and host its Speedpass+ mobile payment application, which eliminates the need for consumers to enter information at the oil and gas giant's 11,000 U.S. stations.
Putting the consumer experience at the forefront was key for Exxon, according to Devin Miller, Exxon digital application development manager, who worked closely with IBM on the app. Rather than enter a ZIP code, opt in for a car wash or redeem loyalty points, consumers tap a button in the Speedpass+ application to initiate fueling. They can also pay for car washes and collect reward points from the app, which has more than 1 million downloads from the Apple App Store and Google Play.
Miller says that IBM's public cloud, building on a long-standing partnership in which Exxon has used IBM servers in its own data centers, has proven extremely reliable in ensuring the app’s availability. "It helps us hit on our objective in growing consumers’ loyalty while also removing any pain points or friction in consumers’ journey," Miller says.
ExxonMobile’s XTO Energy subsidiary is using Microsoft Azure to collect real-time data from oil field assets spanning more than 1.6 million acres in the Permian Basin. The data will enable ExxonMobil to make more accurate decisions on drilling optimization, well completions and prioritization of personnel deployment.
Leak detection and repair response times could be further reduced with enhanced access to emissions data. ExxonMobil said in a statement it expects to improve capital efficiency and support production by as much as 50,000 oil-equivalent barrels per day by 2025.
Miller’s advice: Once a new digital service takes wing, there is no going back, which is why the platform on which an app is hosted must be resilient and always available, says Miller. Consumers expect an Amazon.com-like experience from every digital interaction, he says, and if doesn’t work, their faith and loyalty in the brand can be shaken. "When that experience is on a digital platform, expectations are heightened by default," Miller says.
Riders on the cloud
Harley-Davidson is banking on LiveWire, its first electric motorcycle, as core to its strategic plan to accelerate growth by launching new products in additional motorcycle segments, broaden brand engagement and strengthen the H-D dealer network.
To support tech built into the new ride, it turned to strategic IT partner: IBM. It hosts H-D Connect service, which provides cellular connectivity to link a LiveWire owner to their smartphone and Harley-Davidson app, on IBM's public cloud.
Thanks to H-D Connect, LiveWire riders can check bike vitals, including range, battery health and the location of charging stations, from their phones. In the spirit of preventative maintenance, LiveWire provides automated service reminders. The system will also notify rider’s whether their LiveWire ride has been bumped, tampered with or moved.
Easy rider lesson: For Harley-Davidson, the comfort of IBM’s cybersecurity pedigree was key. "With IBM we have struck the balance between using data to create both intelligent and personal experiences, while maintaining privacy and security," says Marc McAllister, Harley-Davidson vice president of product planning and portfolio.
Cloud is the ticket for Live Nation
It’s rare that a cloud migration happens because the CEO mandates it, but that’s where Jake Burns, vice president of cloud services for Live Nation, found himself in late 2015 when the CEO ordered the company to move 100 percent to a public cloud. “He wanted us to be this modern, agile company,” Burns says.
It was refreshing for Burns, who was already contemplating shuttering data centers and moving to a hybrid cloud. Emboldened by the CEO, Burns reskilled roughly 20 engineers in cloud solutions before moving Live Nation’s corporate operations, including Oracle databases and SAP applications, to AWS. “The planets aligned and we were able to cut through the bureaucracy,” Burns says.
Many people have come to view the cloud as salvation from infrastructure hell. But Burns says the cloud courts new complexity, including managing virtual machines, snapshots and backups, to ensure costs don’t spiral out of control. “Be careful what you wish for because once you're there, you have a whole host of new problems that you have to deal with,” Burns says, adding that he’s seen failed cloud migrations because people couldn’t rein in costs. “That being said, going all in on the cloud in a cost-effective way can be done and we’re the proof.”
Proof enough that AWS hired him as an enterprise strategist last October.
Burns’ advice: Consider hiring someone with technical and business chops who can understand the costs associated with consuming cloud technologies. That will save you from bill shock. "You need to have somebody who understands the technology and who is accountable for costs,” says Burns, who previously served this role for Live Nation. Yes nice catch, thanks.
Cloud floats grocery deliveries
Four years ago, Grocery delivery firm Ocado began phasing out virtualized systems in favor of a multi-cloud strategy that has reduced the time, resources and cost overhead of managing hardware and software, says Chris Dabrowski, general manager of Ocado.
Today the company, which inked a major deal with Kroger to extend its reach to the U.S., leverages an OpenStack system and Kubernetes to orchestrate Docker containers supporting its warehouse and fulfillment centers, and AWS to power its mobile applications and ecommerce system, says Dabrowski.
Additionally, Ocado, which is still migrating its retail business off legacy systems, uses Google Cloud Platform to analyze data streaming from its systems, Dabrowski says. But Kubernetes gives Ocado the ability to port workloads to new containers if it experiences failures.
Dabrowski’s advice: Migrating to the public cloud has required Dabrowski to hire new talent to work with the container and cloud systems. The move has also required a companywide cultural transformation — a task that may have been as hard the migration itself. "It was really a case of selling the benefits to all of the stakeholders," he adds.