Premise: With at least 33% of all IT spending moving to public cloud over the next 5-10 years, it’s critical for businesses to determine their portfolio rationalization for building or migrating certain applications and data to public cloud environments. Several methods are beginning to emerge that IT organizations and lines of business must embrace to be successful. 

External competition is a prime source of change within many businesses, and in almost every vertical industry, disruptive competition is being created through the use of new applications (Real-Time, Mobile, Big Data, IoT). For incumbent companies, the focus often shifts to the question of whether or not to migrate or re-platform applications to more favorable economic or agile environments. As Wikibon has previously identified, there are many factors that drive these decisions, including the locality of existing and future data, the technical skills and organization model of a business, and the ability to leverage 3rd-party resources to drive the technical and cultural changes involved in business-critical applications.

For the past 3-5 years, the conservative guidance that legacy applications were not “cloud ready” has dominated many Enterprise IT discussions. But Wikibon believes that external competitive threats to business are beginning to drive a new set of thinking around how to use applications to create business differentiation and survival. Below are three examples of how the market is evolving to offer public cloud, enhanced partnerships and training, and advanced Cloud Native Platforms to help accelerate both migrations and re-platforming opportunities.

Migration as a Change Agent

As Wikibon talked to IT leaders at AWS re:Invent 2015, one recurring theme was the process of re-evaluating existing applications in the context of available public cloud resources. These companies had a set of business requirements that were forcing them to explore if using public cloud resources would be a better alternative to continued investment in their data centers. In about half of these cases, the amount of data associated with certain business-critical applications was reaching a point where on-premises management had become an inhibitor to business success, especially in cases where the data-sources were external to the business. For these customers, these challenges are internally driving not only their migration strategy, but the associated application changes that are reshaping how their business competes in the marketplace.

Customer Use-Case Example: FINRA, a US-based financial services regulatory company collects market transaction data from multiple exchanges across the US and globally (see FINRA on theCUBE from Pentaho World). This data is used to reconstruct models of the market to identify trends, trading patterns, potential fraud and other legal activities that require deeper analytical analysis. This information can generate multiple petabytes of information per month, and must be kept for several years to align with regulatory requirements. Managing this amount of data within on-premises data centers became prohibitive for the business, so the company explored elastic public cloud options. As part of this exploration, they also re-examined the existing applications that were used to collect and analyze the data and determine that more modern frameworks (e.g. Hadoop, Spark, YARN, etc.) could improve their analysis capabilities. Because of this, they used this need for a business transformation to also re-architect several aspects of their applications as part of their migration to a public cloud service. The CAPEX to OPEX savings helped fund the application engineering. This re-architecture allowed them to not only explore the native aspects of the application, but also if elements of the public cloud service (e.g. Database-as-a-Service, Analytics-as-a-Service) could augment how to improve the overall application.

In another customer example, Roland Oberdorfer (Chief Architect) of SingPost discussed how the company re-engineered and built new applications that moved the company into new market segments and geographic regions:

Migration through System-Level Partnerships

For many companies, the business threat from new competitive applications is very real. But so too is the challenge of having the necessary technical skills to manage a migration that best takes advantage of public cloud resources and services. The demand for those skills has grown so much over the past 12-18 months that we’re now beginning to see new types of partnerships evolve, such as the Cloud Business Group created between AWS and Accenture. This initiative is focused on helping companies migrate applications to the AWS cloud, as well as training 1000-1500 new resources to help accelerate the migration of business-critical applications.

While partnership announcements are always interesting in terms of forecasting potential changes to market dynamics, it’s important not to overlook how critical this re-training element can be in growing business opportunities. While many CIOs list “Cloud” as a Top 3 IT priority, they also list “Lack of people skills and process” as a Top 3 transformation inhibitor. Being able to accelerate the learning curve by leveraging expertise from partnerships is becoming as critical as the underlying technology. There is added value if there is a framework to transfer these new skills to a company’s existing staff.

While AWS provides a broad number of services to enhance applications, this partnership takes advantage of the additional functionality that Accenture has built into their Accenture Cloud Platform, which is an overlay across multiple public clouds. The platform provides customers with greater levels of visibility into their applications, as well as providing additional capabilities that are needed for security, compliance, regulatory and other elements that are often unique to multi-national corporations.

Jeff Radack (Accenture) and Terry Wise (AWS) discussed this partnership and provided insight into how this partnership is helping companies migrate 100s of applications per month into the public cloud.

 

Accenture’s Rodrigo Flores discusses the challenges of building a multi-cloud, hybrid cloud platform and some of the nuances of public cloud (cost, compliance, performance) that companies might not think about before beginning an application migration:

 

EMC’s Virtustream xStream Cloud platform is another example of a partnership model where customers are able to re-platform business critical applications (e.g. SAP R3 or HANA) to a more agile and economically advantaged cloud platform. Virtustream assists with sizing the applications for their managed cloud platform, manages with application and data migration, and can augment the customer’s IT staff for those applications if needed. This model allows customers to focus their resources at the application layer, while augmenting their staff with the Virtustream cloud resources for Infrastructure, Security, and Compliance.

Virtustream’s CEO Rodney Rogers recently spoke with Wikibon about why their customers are adopting this managed model vs. alternative public cloud options in the market:

Wikibon continues to see emerging opportunities for businesses to leverage partners to help them not only augment their existing skills, but also help in the planning and re-platforming of applications across a number of public and managed-public clouds.

 

Migration through Application Platforms

Over the past several months, Wikibon has written extensively about the transformation that Cloud Native Application Platforms (often known as PaaS or Platform-as-a-Service) are driving to help businesses build new applications. These platforms not only simplify the deployment and operations of next-generation applications, but they also have the potential to abstract the applications from the underlying cloud platforms. This flexibility is desirable to companies that don’t want to be locked into a specific cloud platform, or may desired to build a hybrid cloud environment that spans multiple private and public cloud environments.

While some Cloud Native Platforms are designed to work with a broad range of application frameworks and types of applications, other platforms are built specifically for certain types of applications, such as Mobile or IoT. These platforms allow specific development groups, which may have unique requirements and focus area to accelerate their efforts as their migrate applications and expand market coverage.

In one example, Matt Terry from Kony spoke about how their Mobile Application Platform is helping customers accelerate mobile applications that may have been struggling to complete or keep up with rapidly changing ecosystems (e.g. Android, iOS, etc.)

New Services Open New Migration Opportunities

While the public cloud may still have some issues to work through in order for all types of companies and applications to feel comfortable, the appeal of nearly infinite resources and value-adding services is extremely appealing to both developers and business-owners seeking near-term advantages. But very few companies have the luxury of not having the technical debt of legacy applications and data. Determining when and how to integrate or migrate those applications will be a critical factor in determine how quickly those new business opportunities can be exploited.

Action Item: Applications are becoming the competitive differentiation for many companies and industries. Aligning application portfolios to the most agile and cost efficient environments should be a top priority for every CIO. This means that not only do CIOs need to be able to justify if applications are running in a Private or Public Cloud, but have a framework in place to manage migrations and re-platforming when the competitive situations dictates changes. It is critical for companies to understand the possibilities and where they best align or augment their existing skills and applications. Understanding how to excel and take advantage of the emerging cloud markets will be a critical differentiator for many businesses over the next 2-5 years.