by September 12, 2013 0 comments

Are Indian enterprise CIOs more open to a moving their IT infrastructure to the public cloud? Which of their key pain points are being addressed by moving to the public cloud? Should they choose a public or a private cloud deployment? To find the answers, We had a long chat with Dr. Werner Vogels, a renowned name in the world of cloud computing and CTO of Amazon Web Services. The results, according to Dr. Vogels are very encouraging. “About two to three years ago, we had one or two examples, but now, there’s a whole list of customers across oil and gas, energy, manufacturing and many other industries.” Said Dr. Vogels.

He was also very excited about the entrepreneur eco-system as many of them were targeting the global market, thanks to a scalable cloud based IT infrastructure at their disposal. “The same goes for the software industry, which includes not only ISVs, but even system integrators. Cognizant, Wipro, Infosys, CSS, Mahindra Satyam-all have their practices on AWS. They all have very interesting products. Cognizant for instance, has what’s called Cloud 360, which provides a single pane of  glass for on-premises and in cloud for their customers,” he added.

He gave several other interesting examples of large Indian enterprises, like Tata Motors, which hosts their websites for Nano on AWS. “They’re even instrumenting their trucks with GPS and plotting their data on AWS for real time analytics. It’s a property called Telematics pilot using which they’re planning to instrument a fleet of 200,000 trucks.” he said.

“CIOs are asked to cut/reduce IT costs, and there aren’t many tools to do that, except to pick a single provider, do a very long term contract, and negotiate prices down as far as possible. But after that, you’re stuck with that vendor for five years…not a situation the CIOs want to be in anymore.”



The Marriage of On-Premise and On-Cloud IT Infrastructures

Since enterprises have already made significant investments in their on-premise IT infrastructure, they can’t suddenly shift everything to the cloud. This calls for a marriage between the two infrastructures. “We’ve put more efforts in the past two years in delivering more services that make it easy to offer services on premise as well as in the cloud.”, said Dr. Vogels. “VPC for instance, allows organizations to cordon off a piece of their client in the cloud and connect it back to their on- premise environment. It allows them to provide a direct connect where they can build 1 to 10 Gbps MPLS circuits directly  into the cloud to bypass the Internet.” he added. Dr. Vogels also gave several other examples of using VPC, like federation between identities, setting up a storage gateway to manage both on-premise and on-cloud storage, workflow services, etc. “With all these things, we make it easy for customers to transition between cloud and on-premise.”, he said.

Resistance from CIOs to Migrate to Public Cloud Has Reduced Considerably

There was resistance from CIOs to migrate to the public cloud in the past, but it has actually flipped around, according to Dr. Vogels. “Now they see it as an opportunity for them to be seen as an enabler of innovation”, he added. “It’s not an easy task to be a CIO anymore. They’re now asked by the CFO or CEO (or whoever they report to) to cut/reduce IT costs of the organization. There aren’t many tools to do that, except to pick a single provider, do a very long term contract, and negotiate prices down as far as possible. But after that, you’re stuck with that vendor for five years.” he added. This is not a situation the CIOs want to be in anymore. To further strengthen the case for Cloud Computing, he indicated that the economic landscape is changing, with increasing competition, abundance of products in market, increasing consumer choice and decreasing loyalty. This is putting businesses under pressure to deliver products faster, and better targeted toward their customers. They need an IT organization that can move fast. “So maybe in the beginning, CIOs looked at cloud computing as yet another tech to deal with, but slowly they have  realized that the real power of cloud computing is how to serve the business better, how to build differentiated solutions, without having to break the bank, or investing any capital. Plus, you can build charge back models to your internal business units because you know exactly how much a particular technology requirement will cost to implement. So it’s the business advantage that drives the cloud and not the technology.” he added.

“In the past, vendors would lock you into contracts, so you had no control…in the new world, without any contracts to lock you in, CIO has a lot more control because they can walk away if they want to.”



CIOs No Longer Fear Loss of Control by Moving to Public Cloud

Considering that by moving to the public cloud, a part of the IT infrastructure goes out of the data center, do CIOs fear that they’re losing control over their IT infrastructure? After all, CIOs have spent many years to build up an IT  infrastructure for their organizations. Would a shift to the cloud reduce their importance? To this point, Dr. Vogel commented that AWS delivers building blocks and not total complete solutions. Therefore, it’s something that CIOs want to offer to their business units. In fact, the CIO is supposed to find the best business solutions for his customers-the various  BU heads of his company. So with solutions available in the public cloud, he’s worried that if he doesn’t meet the business needs, the BU heads will go out on their own.

So that’s definitely threatening, and not something that CIOs can ignore.Speaking of control, Dr. Vogels felt that it’s an  emotional thing with most CIOs and an illusion that they have more control over their IT infrastructure. According to him, they may have lost control over blinking lights, but they actually have a lot more control than they ever had before. “In the past, vendors would lock you into contracts, so you had no control. It was actually with the vendor. In the new world, without any contracts to lock you in, the CIO has a lot more control than before because they can walk away if they want to.”, he said. He agreed that it’s not a trivial job, but it definitely gives CIOs greater control, and not lesser. 

In fact, the jobs of IT workers themselves are changing from managing day to day administrative tasks to monitoring service providers against the agreed metrics. “Suppose a business unit needs a CRM system. The IT team will define how much latency, security, etc. to expect from the service provider and then continuously monitor it. If the metrics are not being met then they have to figure out how to switch to a new service provider. This gives them a ton of control” He said.

Public vs Private Cloud

A lot of enterprises have virtualized their IT infrastructure, and from there, are moving to a private cloud, which is more centralized and owned by them. Does this affect their move to a public cloud? This trend has been in progress for a long time, and Dr. Vogels felt that this is an IT driven trend. Organizations virtualize to consolidate their IT infrastructure and reduce cost, but not to improve its agility or reliability. He feels that the target of private cloud solutions are the existing virtualization vendors, and not public cloud. “CIOs are actually implementing these solutions as a transition point into the public cloud. The data center is not disappearing, but there will be less data centers over a period of time, and a lot more large enterprises will be using our services, but it’s a transition phase”, he said. “If your servers are going off lease, do you really want to buy new ones? Do you want to go and ask the CFO for a new set of servers? With total lack of capital in the market, it’s a hard conversation to have with your CFO. So you check whether you can move it to older servers, and then ask why not move it to the cloud?” said Dr. Vogels.


He further reasoned that if your CRM or HRM application is going off lease, do you really want to lock yourself again into a contract with the vendor for a long period of time, or should you consider a SaaS provider? HR applications for instance, are “very coarse grain scalable. You do performance management. in spring, compliance training in summer, promotion management in fall, etc.”

He illustrated this with ho an HR app is run at AWS. “In AWS, we have 90,000 employees who have to fill in their performance review on March 15th midnight. So 10 min before midnight on March 15th, at that moment, you need substantial capacity to cater to these customers. I don’t want to hear an excuse that since the server was down, I couldn’t fill my performance review. In many cases, experience for the end-users is identical.”

“Two key CIO pain points have come up loud and clear…one is that digital info is exploding, putting immense pressure on data archiving and data warehousing. Public cloud has solutions to address both…”

According to Dr. Vogels, a private cloud can’t offer the same functionality because from a CIO’s perspective, it still requires capital expenditure. Plus, you don’t move much faster, don’t get the agility because resources are still constrained, and you still have to do all administrative tasks yourself. And if your business wants to go global, then you have to do it all over again. Nevertheless, Dr. Vogels still considers it a good thing for CIOs to do virtualization.



CIOs’ Pain Points Due to Digital Data Explosion

Two things have come up loud and clear, according to Dr. Vogels. One, digital info is exploding, which is putting two pieces of IT infra under immense pressure. One is data archiving, most of which is done on tape libraries. The explosion of digital data is forcing CIOs to go for a second tape library, which is a costly adventure. While it’s something that’s highly durable, it needn’t be available at a second’s notice. “So we delivered Amazon Glacier, which stores data at 1 cent per GB per month, and gives 11 nine’s durability. A lot of our customers are moving their complete tape libraries into Glacier”, he added.

The second thing in the explosion of digital content is data warehousing. Building a data warehousing solution is expensive, with larger ones costing exponentially more. “We now offer RedShift cloud based data warehouse solution, which is blindingly fast. BookMyShow for instance, is running their data warehouse on AWS. They were using Tableau earlier. RedShift is a standard data warehouse with standard interfaces for JasperSoft, Tableau, etc. The barrier to entry is very very low for CIOs to use it”, he said.

Lastly, we asked about the other key pain points of CIOs that AWS might be addressing in the future. “It’s something that I’ve been advocating-the best way to protect customers is with full encryption. I’ve already started talking about it extensively. We’ll see making encryption easier to use. It’s standard, best practice engineering hygiene. If you have sensitive business data of your customers, you should encrypt it, whether on premise or on the cloud. In the cloud, we have a great opportunity to make it simpler.

He concluded by saying “As I think that our options give CIOs more control. In this case (encryption), they have more control over exactly who has access to their data.”

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