Cloud makes it easy to run a business but handling it can be complex due to its dynamic nature. How can we make it easier to optimize related cost, usage, performance, security, and availability? And how can it all be automated such that the cloud manages itself?
Contributors

• • William Fandrich, Senior Vice President and Chief Information Officer, Blue Cross Blue Shield of Michigan
  • Phil Bertolini, Deputy County Executive/CIO, Oakland County

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Transcript

Sanjog Aul [00:00:23]:

Hello, and welcome to the segment on CTN. And to learn more, please visit ciotalknetwork.com. And the topic for today is Managing Cloud To Manage Itself. And our guest for today’s show is William Fandrich, who’s the senior vice president and chief information officer with Blue Cross Blue Shield of Michigan. Hey, Bill. How are you?

William Fandrich [00:00:41]:

Good. How are you doing today?

Sanjog Aul [00:00:43]:

Very good. And I also have Phil Bertolini, who is the CIO with Oakland County. Hi, Phil. How is life?

Phil Bertolini [00:00:48]:

Great. How are you?

Sanjog Aul [00:00:50]:

Good. So here, the topic is managing cloud to manage itself. And the reason, the genesis of this topic is because, of course, no longer somebody has to think about why should somebody use cloud. It’s mainstream, and we are using it full throttle. Now the only problem some people have faced is they started with it, but now the management and the costs related to it sometimes go out of control, and there have been ongoing issues at how much how well do I use cloud for it to not offset the very value it creates. So that said, we wanted to discover and or discuss what is it that, we could do? What is that magic recipe of managing cloud and how to create automation so that we can get to a point where it manages itself? Is that even possible? If yes, then how do we go about it? So that said, so, Bill, why don’t we start with you? What do you think is the level, if you were to kind of literally wear the hat of a pseudo analyst, when it comes to cloud and that too in this digital now age where there’s so much coming from all different directions, what is the current level of an organization’s maturity in being able to use cloud?

William Fandrich [00:02:14]:

I think that quite frankly varies, quite a bit organization to organization. But I think you have to go to the premise of what really cloud is and a true cloud model and then understanding when you’re entering these relationships that you’re aligned to make sure you can take best advantage of its capabilities. The cloud, by definition, moves us from an asset orientation model, a fixed asset, to a utility or service based model where some form of consumption is the driver of how you pay for that service. The technology alone to enable that, you’ve gotta be ready to support the cloud, and that goes in multiple areas. It does not eliminate your need to have technical sophistication and understanding of how that will interoperate with other things in your environment. In fact, it probably requires more sophistication. What you’re eliminating is a lot of the so many aspects of your towers and the support of those services. When you think about it, though, from a, how it gets implemented and evolved, if you don’t have the right capabilities to monitor, to be able to understand capacity planning, to have the right governance to oversee it, what you oftentimes find out is that you’re driving a lot more usage, that quite frankly, you’re buying more capacity than you actually need, and you’re not really leveraging the full aspects of a cloud, which gets you away from having a fixed infrastructure. You’re just building more things into the cloud, oftentimes in a more costly environment. So it does require a different kind of procurement model. It requires you different types of governance models. It does require you a degree of tactical sophistication, and you need to be enabled for the cloud, which includes all the appropriate monitoring and support infrastructure for that.

Sanjog Aul [00:04:21]:

So, Bill, based on Bill’s response here, the very reason why someone would go to cloud is to leverage its ability for dynamic provisioning and, of course, other aspects, but dynamic provisioning where you’re only paying per use. So that, would you say, is not assumed so far, or is that not a given feature that one would go with?

Phil Bertolini [00:04:49]:

Well, I think one of the problems you have today is you have Bill and Phil on the call. So this is Phil who’s answering what Bill just talked about. But the dynamic provisioning is a very important part of this, but understand that there’s a delta in cost that it has to be worth it. And what I mean by that is, what would it cost me to have it on premise versus what would it cost me to have it in the cloud, going to an operational expense instead of a capital expense, but is the delta of what I’m gonna have to pay to do that ongoing, is it worth the dynamic provisioning? In many cases it is, based on the fact that I don’t want to have to build our internal data center up to full capacity. But it depends on the organization. It depends on how you virtualized and how you’ve done and optimized your data center to determine whether you’re gonna get a lot of benefit out of it.

Sanjog Aul [00:05:42]:

So, William Fandrich, this is a question for you. So here, if you were to look at any organization, especially these digital companies of the future, everyone is saying cloud first or cloud only model. I’m not talking about the natives, but even the ones who had the legacy. They’re moving towards the cloud first or cloud only model. When they’re gonna go that route, then there’s no so called legacy that they have to deal with. Would we not have to tackle this problem of cost going out of control or provisioning formulas, etcetera, before we go? So are we getting ahead of ourselves?

William Fandrich [00:06:24]:

I think oftentimes when you hear those words of, you know, we’re going to the cloud, I think, like, every aspect, especially large complex organizations with, as you noted, legacy systems, you know, you can’t have a one size fits all model. We have a variety of capabilities and services. Some are more geared towards what more of an orientation to a software as a service versus, to many aspects of our infrastructure that can be cloud enabled for many of our development in other parts of our environment. There’s many legacy technologies that would make no sense to migrate to a cloud model. And I think that those are things that try to drive to saying that’s our strategy, move the cloud, I think is depending on what your business is unless you don’t have a lot of that legacy in a wide disparity of technology. You might be able to do that, but for most of us who live with hundreds, if not thousands of legacy applications that have been built over decades, you just don’t go there. And nor is it the right answer in many cases. So you’ve got to look at all the tools you have and capabilities you have in the market and really match them against the value driver that they create in the business value that you can get out of it and also where the technology is best run most cost effectively.

Sanjog Aul [00:08:01]:

So question for you, Phil Bertolini. How long will we carry this baggage of legacy? Because, of course, William Fandrich has a good point here that we have so much legacy, with thousands of applications, so maybe the cutover will take many, many years. But is there an end in sight where you say, okay, I’m no longer going to have the legacy hold me back? Because many of the newer business models and the computing paradigms that we want to take advantage of are essentially cloud driven.

Phil Bertolini [00:08:37]:

Well, if we were in Valhalla and we were Zeus, we could just wave our wand and make it happen. It’s not gonna happen that way. And we’re gonna live with these legacy systems for quite some time. They’re not; no one can ever just go ahead and replace everything they have. It didn’t take overnight to build it, so it’s not gonna take overnight to dismantle it. But it’s important to understand too, is I don’t believe everything can go to the Cloud. And I believe you’re gonna have a hybrid model in most cases. I know we are here in Oakland County where we have some technologies that are gonna need to run on premise for the type of technology that they are, the type of data that they’re gonna hold, and the people that are going to use it. So in that case, I may have a scaled down, a dramatically scaled down data center internally, but it doesn’t mean I’m never gonna have anything on premise. And I know some companies have done that where they’ve had older data centers and they’ve said, we’re just gonna take everything and go to the Cloud, and while I wish I could, I just don’t think, I don’t see it happening in the next several years for sure. Because I also believe that we have a real struggle right now, is in talent. When you talk about the ability to go to the Cloud, that requires significant talent and know how to get there. And the problem we have is we have legacy technologies that we have older skill sets that are managing, and at the same time I need these newer skill sets to go ahead and get us to the Cloud. So I don’t see it being just a quick and easy thing and snap your fingers and you’re in the Cloud. What I do see is a long, strategically planned, methodical way to get to the Cloud, and at the same time lessen your need for your footprint on premise.

Sanjog Aul [00:10:16]:

So, Bill, this is for you. When we talk about cloud by design, we are in a way, unless otherwise it’s a private cloud situation, for the most part, we are looking to and or banking on a cloud provider’s ability to handle the performance, the security, the availability, and everything else. But still we find, yes, we are supposed to eventually be owning it because we are the CIOs and are the leaders of IT in our company. But why are we holding that back when we are paying the premium to those cloud providers? And have we reached a point where we have less of that management hassle on our head?

William Fandrich [00:11:01]:

I think you have to look at it from a variety of things. I never believed and I don’t think the world changes that we as CIOs can give up responsibility even if we move it to the cloud of those vendors, which are those relationships, like everything else, are complicated to manage. And you have to going back to the premise of this, you have to design for the cloud. So many legacy technologies won’t work in the cloud. Most of these, off the shelf cloud vendors won’t support many of those technologies. Many aspects of their security, the more sophisticated security, many of us have to have to support the industry specific requirements. You have to add on top of that. So it’s not you’ve got to really understand going into it what your value driver is. I think what’s most important if you design for the cloud is you’re starting to work with your business on new capabilities. There is the opportunity to shape how you deploy and develop solutions. You are reducing a significant amount of your capital expenditure, replacing it with, if you will, an annuity from an expense based model, which finance needs to understand. And if you manage it right, you are leveraging capacity far superior than what you can manage in your own environment when you think about all the different environments you have to have from development to testing to production to disaster recovery. There’s no question you can say but you have to design that. It’s not as simple as taking something legacy and moving that and getting the benefits. Rarely does that work. It is not a panacea. But if you design for that and you work in your everything from your design and development of solutions from that framework, you do have the opportunity to gain tremendous value in a variety of ways.

Phil Bertolini [00:13:08]:

So can I jump on to what Bill just talked about? Because I think he nailed it. And I think what people fail to understand is that there’s a heavy decision that has to be made here. And you have to decide philosophically and strategically where you’re going to head. And I think what we also have to remember, and to add on to Bill’s comments, is we have to make sure we’re dividing and separating Cloud versus SaaS, Software as a Service. Because if I’m creating a Cloud that I’m gonna then house some of my technologies in, that’s one thing. If I’m simply consuming a SaaS model, where I’m consuming a technology that someone else already has in a Cloud, then it’s a different paradigm. And all of this costs money. And as CIOs, we have to work with our CFOs to make sure they understand that my operating is gonna go up and my capital should go down eventually, but not right away. So I think there’s a number of nuances here where cloud providers can say they’re all secure, and they can say it’s real easy, and they can say I have a roadmap for you. Doesn’t mean your organization can go there as fast as some people may think.

Speaker 0 [00:14:16]:

Let’s take a quick break, listeners.

Sanjog Aul [00:14:18]:

We’ll be right back. And let’s evaluate the net positivity of this whole move and or migration to cloud. So, Phil, you mentioned about the SaaS model and the cloud. And, of course, depending on what you’re using, you would use these different versions, if you will, of going where the capability that you’re finding is available through someone else, whether it’s an infrastructure or an application. But regardless, whatever we are trying to do here, what is our net positive or a net result? Are we essentially getting into something newer and sexier, but we are turning it into, forever exercise and increasing complexity? Or is it actually moving us into the desired direction? What’s the current state? What are the challenges? What are the advantages that we are finally finding when we are jumping into it and seeing what is going on with us? Please stay tuned listeners. We’ll be right back.

Speaker 0 [00:15:25]:

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Speaker 0 [00:15:58]:

Your growing business needs a highly productive workforce, effectively communicating and collaborating without exposing corporate data to cyber attacks. Are you looking to balance security and workforce productivity? Move beyond short term measures and securely scale your business with BlackBerry Enterprise Mobility Management Solutions. To learn more, please visit blackberry.com/enterprise. Predict your company’s future by creating it. Is your workforce able to connect, exchange ideas, and share brilliance simply and securely? Create tomorrow, today. Empower your people to innovate anytime and anywhere with secured BlackBerry enterprise mobility management and document sharing solutions. To learn more, visit blackberry.com/enterprise. You are listening to CTN CIO Talk Network with Sanjog Aul. To learn more about our program, please visit ciotalknetwork.com. Now back to the show.

Sanjog Aul [00:17:14]:

Welcome back. So, Phil Bertolini, this is a question for you. With all the effort that’s going on in cloud adoption, and we are trying to find the best way to adopt, whether you mentioned the SaaS SaaS model or the regular cloud in whichever flavor we bring it in. What is the net result? What is the formula you’re using? And that final ultimate goal is to go hugely net positive. But as we are going through this journey, dealing with legacy and all these different, adoption curves, how are we faring with respect to the outcome we are seeing?

Phil Bertolini [00:17:52]:

Well, I think that’s a wonderful question because what we get hung up on in this entire topic is technology. And it’s really a business model and a business play. And if we don’t understand why we’re doing it, and I’m a big fan of the Simon Sinek TED video on how great leaders inspire others to act, he talks about why and not what. If we don’t understand all the whys underneath this, quite honestly, the business decision is much more difficult to make. So why are we doing it? We’re trying to make sure that we are able to optimize our technologies and be able to scale up and scale down when we need to. Why are we doing that? So they’re much more available to us, at the same time we’re managing cost. So we’re trying to do this teeter totter thing of availability, value, and the cost associated with it. And what I’m seeing with the Cloud right now is to get started is very, very expensive. And it’s like building another data center. But it’s because you have to have all the right appliances in place, you have to have all the right monitoring in place, and Bill mentioned that earlier. You have to have all the same things in place, whether it’s in the cloud or it’s sitting in your data center. But what are the wins? The wins are longer term. The wins are, I’m going to go ahead and I’m gonna have an environment that I can scale up and scale down where I need it. I’m going to have an environment that’s secure, and we can help manage that security through whoever our provider is. If I’m using a SaaS model, I don’t have to have all the servers in place, and I don’t have to worry about upgrading servers and versioning software and so on. It’s just happening out in the cloud, and I’m paying for it on an ongoing basis. So my big why to go to the cloud is a number of things, but a couple of different whys. One, I need to make sure I can manage my costs, especially in Government with limited revenues, I need to manage those costs at the same time, provide superior quality and value. The other why is that the whole world is going this way. Why can’t government get there too? And I think we can, and I think we’re working towards it. I do think there’s a value proposition, but you have to be ready to ride it out. You have to be ready to wait 3, 4, maybe 5 years before you see a financial win. And that’s okay as long as everybody that’s involved in the original decision is still around saying, yeah, we agreed 4 years ago to make that happen. So I think there’s an upside, I think there’s a positive, and we’re looking forward to getting into this new environment much more thoroughly. Because we’re in Amazon Web Services, and we’re using SaaS where we can. The question is, what is that mixture gonna be longer term? And that’s what we’re working on.

Sanjog Aul [00:20:32]:

So, William Fandrich, you must be sitting with CFO at some point when this all started

Phil Bertolini [00:20:39]:

to say, okay. We will go to

Sanjog Aul [00:20:40]:

this cloud journey. What did you promise, short term, medium term, and long term, in terms of the numbers or the outcomes that you will be able to, deliver or and or use as benchmarks to see whether you’re going in the right direction?

William Fandrich [00:20:54]:

Yeah. So here’s the way I would in response to that question, I would frame it. First thing I did besides because there was, like, every company, they hear about this, the power of it. They hear about Amazon. And, of course, every company, every vendor out there is pitching to the business people the value of the cloud. First of all, before we sat down and just talked about moving to the cloud, we had long, long discussions, executive team, of what the cloud really means. And then where could it drive value and where it wouldn’t drive value to try to provide some clarification so we just didn’t fall into the panacea. Then equally to be honest there was a lot we could do in our new innovative capabilities in a lot of our, if you will, in the data management informatics space, in a lot of our even in some of our infrastructure spaces where it was more IT where we wanted, for lack of better words, eat our own dog food. We want to be able to demonstrate where we had most of the control that we could drive a value prop. And we were able to clearly measure the cost to deploy to the cost to operate the differences between the two model. We’re very transparent on that. The sales point is this is a business change, not just an IT change. In fact, it has to be about the business. So now our journey is really talking about how we start to leverage the cloud for our capabilities or innovations that we’re driving with the business and not thinking about as a technology, but thinking about as an operating model of how we design develop and deploy solutions in a much more rapid way at a much more cost effective timeframe in a much more flexibility for us to conduct business more across the various third parties that we do business with which is important to our business community. So if you go down this path, if you’re not spending 60-70% of your time as CIO educating your business, it’s going to come back and haunt you because it’s not something that should be considered just a technology, and the benefits will not happen because the change that has to occur across the organization is far beyond just IT.

Phil Bertolini [00:23:26]:

You know, and you think about it, Bill. That’s that long term change too. Exactly. That short term memory stuff drives me crazy sometimes where you talk about it, and a couple years later, you’re trying to bear the fruit now. And it’s like, why did we do this? Why are we going here? Why aren’t we changing our model? And I think in our organization, I’ve had CFOs that’s been here a very long time and our county executive as well that we have very good continuity of leadership to where we agree and we can move forward. But think about those organizations that don’t, and they have a changeover in leadership, and they’re right in the middle of a major deployment in the cloud, and people are wondering why they’re spending all that money. That would just drive me nuts.

William Fandrich [00:24:03]:

I agree. And I think, you know, for those of us who live through the waves, although it was more about a labor arbitrage, but there’s very similar comparisons to the emphasis on offshore, like, move everything offshore. I think people found if they didn’t approach it the right way, that your cost over time go up, and there’s tons of hidden costs that no one anticipated. And this is the same concept. It is not a panacea. It needs to be thought through strategically, and it’s about an organizational commitment, as Phil said, not just in a short long term, not just about a technology play and not about a short term return on investment.

Phil Bertolini [00:24:47]:

Yeah. That offshore thing was a short term look, wasn’t it?

William Fandrich [00:24:50]:

Oh, yeah.

Phil Bertolini [00:24:51]:

Everybody was thinking, oh, I can save $20 an hour by having a programmer overseas, and then, yeah, who’s gonna manage them? Who’s gonna be talking with them at night? Who’s gonna make sure you get the deliverable you need? So that was a short term fix to a long term problem that I’m glad we got through. Exactly.

William Fandrich [00:25:08]:

And we don’t want to make the same mistake with the cloud. There’s power with it, but it’s dangerous if you don’t understand what you’re getting into.

Sanjog Aul [00:25:20]:

So, Bill, William Fandrich, this is a question for you. You since you mentioned cost control, right, or a false sense of cost savings, what is the dark side when it comes to looking at cloud and thinking that, hey, it’s a subscription based model, it’s a simple pricing, and I can get away with many, many dollars of savings when it comes to trying to handle costs in a cloud environment?

William Fandrich [00:25:47]:

I think that that’s again, you have to think about what service you’re procuring. If you think about infrastructure as a cloud, meaning a lot of our back things behind the walls traditionally in the data center, etcetera, and you’re doing that, that’s one aspect of it. And certainly people talk about, well, we don’t have to buy servers. We don’t have to deploy hardware. We don’t have to do patching. We don’t have to do all these things and you got to be real careful there because I’ve seen people move to that model very quickly and next thing they know they’re paying by the drink in this case, by the number of servers they provisioned or number of environments they’ve created. And because it’s so easy and simple, and there’s no governance, they’ve got 10 times the amount of volume in there than they ever had in their fixed environment and their costs are out of control. And they have no ability to understand usage and consumption. So depending on how you’re focusing the cloud, you need to put the right economics in place, but also the right governance and oversight to make sure you’re taking maximum value. Because just because it’s cheap and easy, doesn’t mean you should be doing it.

Phil Bertolini [00:27:04]:

Well, you know, on the tag on here, it’s also a permanent decision. I mean, people always say, well, as long as you have an exit strategy, you can get back out of the cloud. Once you make this decision, you’re getting rid of your infrastructure. And if you go to the cloud, it’s not like I can just turn around tomorrow and buy all new servers and come back.

Phil Bertolini [00:27:23]:

This is one of those decisions that takes some time, and you make sure you’re making the right decision because you’re gonna live with it for years.

Sanjog Aul [00:27:31]:

So given what we just discussed here, I think the next best way to approach this is to look at what is your usage gonna be. And when you look at the usage, most of the people like, Bill, you mentioned that you use Amazon, and I remember having a conversation with a CTO. When they were trying to use a formula, they said before you know it, the usage could go through the roof and it will very quickly provision something and the bills would go crazy. So then you have to deploy a set of tools to control something like that because humanly, it may not be always possible. So what are we dealing with here that it is like a horse that you get on and it is going to either throw you off or it’s gonna get unmanageable very quickly. Is that are we dealing with such situation in real time?

William Fandrich [00:28:25]:

It could be if not set up the right way, and that gets back to the governance and how you set up your relationships with these vendors. We as an IT industry just look at the 30 years of capacity management efforts we’ve had even in environments we totally controlled and managed and how difficult that was. Now multiply that times 100 in a complexity when you’re thinking about a cloud in all the things that you don’t understand till you’re in it. So there are a variety of things in our efforts we’ve worked with our third parties, cloud offering partners on. One is exactly that. We have some thresholds and other things that if things ever get beyond a certain threshold there’s triggers and flags that they’re on the hook too for flagging us about that, including agreeing on some capacity planning and modeling that we both use as the basis of our agreement and pricing models and incentives that drive the right kind of behavior along with the oversight and the governance. So these things around capacity planning are way more complicated than they used to be, and those were not things we always did very well.

Speaker 0 [00:29:56]:

Let’s take a quick break, listeners.

Sanjog Aul [00:29:57]:

We’ll be right back, and let’s talk about the approach one could take to help simplify this whole usage and the threshold management and when if there could be cost overruns, there is a way to signal. So many cloud providers, at least that has been reported, have not provided the most effective tools to do that. And because the tools are not available, that’s why there are third party services being made available or people are trying to manage without the tools and that’s where they’re seeing the cost overruns and they are paying through the nose. What can be done to prevent this from happening? What is being done by the vendor community and the enterprises who are supposed to be paying these bills to make sure the usage, the cost, everything stays under control. Please stay tuned listeners. We’ll be right back.

Speaker 0 [00:30:56]:

Patient centered care requires a connected enterprise. Are you ready? If you’re looking to scale your health care IT efforts, visit redmane.com/health today. Whether it’s to connect data from multiple partner solutions or developing software for unique needs, RedMane can help. To find out how RedMane can help your company deliver on the patient centered care promise, visit redmane.com/health or call (773) 693-3919. Visit today.

Speaker 0 [00:31:29]:

Your growing business needs a highly productive workforce, effectively communicating and collaborating without exposing corporate data to cyber attacks. Are you looking to balance security and workforce productivity? Move beyond short term measures and securely scale your business with BlackBerry Enterprise Mobility Management Solutions. To learn more, please visit blackberry.com/enterprise. Predict your company’s future by creating it. Is your workforce able to connect, exchange ideas, and share brilliance simply and securely? Create tomorrow, today. Empower your people to innovate anytime and anywhere with secured BlackBerry enterprise mobility management and document sharing solutions. To learn more, visit blackberry.com/enterprise. You are listening to CTN CIO Talk Network with Sanjog Aul. To learn more about our program, please visit ciotalknetwork.com. Now back to the show.

Sanjog Aul [00:32:47]:

Welcome back. So a question for you, Phil Bertolini, is about the way we are controlling or be able to control usage and able to control threshold and costs and different parameters when we work in a cloud model. And that has cost, that has created huge cost overruns for many organizations. So who is supposed to be left holding the bag? Should it be us as customers who are paying for this service? Should there be some responsibility on the vendor’s part? How can we bring this all together and maybe make a better sense of all of this?

Phil Bertolini [00:33:25]:

Well, I fall back to some of my early career in government where I was the tax assessor, and no one liked the tax assessor, and they would come and put a value on your house. And it was incumbent upon the taxpayer then to go ahead and fight that value and incumbent upon the assessor to defend that value. Same thing here. Both of us are in this. And if we just go about saying, oh, everything’s fine, and we aren’t watching the bills, and we’re just paying them every month, then we’re just as much at fault as the company that’s providing the service. Now it’s not easy to keep track of, though. There’s so many different moving parts in the cloud. And when you finally get it into the model that’s right and you work your contract to make sure you know what you’re paying for, then it’s a matter of monitoring what you’re using versus what you’re paying for. And you have to have somebody on staff, or somebody on your team, or an outsourced company that’s helping you with the ability to monitor what the usage is and what that bill should be. Now usage getting out of control, quite honestly, the cloud company is not going to spin up an environment for you without you asking for it. So the question would be, is why did that environment get spun up? Why did that extra capacity get used? Was there some threshold that we crossed over that we weren’t aware of? That’s kind of our fault. And I don’t mean to put too much pressure on us as CIOs, but we have to go into this with eyes wide open. And when we negotiate that contract, we should have every bit of cost in how change happens, change control, how something gets done and how it doesn’t get done and who’s responsible for it, that all has to be clearly delineated in the contract. And then the company has to obviously which I don’t think they do any of this maliciously. I think it’s an immature market still, and I think people are still finding their way, but there’s no reason why you can’t audit and find out what’s really going on and making sure you’re only paying for what you’re supposed to pay for. Now we found that early in our cloud days was we saw some of our bills, and they just didn’t look right. So we started digging in and finding out that we had spun an environment or an environment was supposed to be spun up that we were supposed to start paying for and it never happened, but yet we were paying for it. Just like watching your cell phone bills too as an organization. You gotta make sure that you’re getting billed right by the phone company. You need to make sure you’re getting billed right by the cloud company.

Sanjog Aul [00:35:44]:

And I also heard about situations where internally, our team wasn’t properly either trained, or there was no vigilance around someone willy nilly spinning up, you know, servers and incurring the cost, and we cannot go and challenge the vendor because we were at fault. So is there something we have to do in terms of readiness of an organization before you open up the floodgates and give these people the carte blanche to go ahead and create the environment, at their own free will?

Phil Bertolini [00:36:17]:

Well, I guess the issue you have to look at too is how mature is your organization, period. Organizations that do not have a good handle on their change control or what they’re doing process wise, they’re probably not great candidates to go to the cloud because you have to watch everything because you’re paying for it every month. And once you make that decision and go there, it’s a decision you have to live with for a very long time. So if you don’t have the right people internally to go ahead and manage it, you’re gonna have a problem. But then my question is, how immature are you as an organization to begin with? Do you have the right process and procedures in place to even manage your internal usage? So if you don’t know what you’re using in the Cloud, do you really know what you’re using internally on your servers in your data center? So I believe that, yes, to use the Cloud effectively, you need to have a more mature organization that has process and procedure in place and the right skill sets in place to be able to make sure it’s being managed properly and that you’re not paying for more than what you’re actually using.

Sanjog Aul [00:37:20]:

So, William Fandrich, question for you. You had the pre cloud days and, of course, with the cloud days. And when it happened, did you have any specific guideline to say these specific changes we would make to our policies and procedures, which will make sure that everyone who whenever they provision a server or a desktop or whatever other compute will go through a certain very set of training and or audits before it actually get provisioned on the server before you even get billed an extra nickel? How did you prevent unnecessary leakage from happening? And how did you know you got you are there now in terms of organizational maturity before you allowed the cloud to be provisioned through your bill, if you will, through your account.

William Fandrich [00:38:14]:

To be 100% transparent on that, we still limit probably more so, even in our traditional legacy world, even though it’s not the same as building out a server farm or standing up a new server. Our business people had a lot of ability in SharePoint to create things and spin them up on their own, and we had guidelines there, etcetera. And always, as you can imagine, those things were challenged to overseeing governance. But when it comes to the cloud, there are only a couple people with the keys to the kingdom to do that. And even though you can self provision, it still goes through a validation step. And as part of that, there’s a very heavy scrutiny, getting back to what Phil was saying before, very heavy scrutiny on the bills, and the detail behind the bills that tells us what’s being consumed, what’s being deployed, etcetera, so we can better understand it. So I actually think in this new world, it’s not just about rolling it out in training. You have to think about a different decision making process and an authority process of who actually can invoke those services. And quite frankly, you gotta rein that in tighter, not looser, because the implications are far greater when they’re outside your boundaries.

Sanjog Aul [00:39:51]:

Did you have a signal or a litmus test that, okay, my organization is fully cooked for cloud in terms of the people, policy, and processes?

William Fandrich [00:40:01]:

Yeah. And we do it area by area, environment by environment. So as you think about just the normal life cycle of how we deploy things is, again, most of our stuff for now has been in our new innovative capabilities going to the cloud. So we are redesigning. As part of that, everything’s managed tightly within a project while we’re doing that. And then there’s a level of maturity that you’re building out before it becomes truly operational with most of the people who design and build still controlling it. But when we move now that we’re moving to an operational state, we go through a redesigned IT support model that affects virtually every aspect of our organization within IT, but it does change roles and responsibility and decision makers. So until we see those things in place and until we see that people are responding consistently the way we’re expecting it, we just don’t roll it out. It has to be tied to hitting certain levels of maturity and being able to, also change the authority levels within the organization who can do what.

Sanjog Aul [00:41:15]:

So, Phil Bertolini, this is a question for you. When we are looking at cloud management and it’s getting literally out of hands in some cases, we would definitely like to introduce automation. But then, like with any other automation exercise in within IT or otherwise, we want to find the best candidates where we start doing it. What would be your recommendation where humans should still watch for what’s going on versus where automation could play a role so that we are not unnecessarily putting our team to a task which they can anyway not do well, and plus it will be a waste of their time and energy?

Phil Bertolini [00:41:55]:

Well, I guess I have to challenge the premise that there’s so much work monitoring the cloud that we need automation to do it. If you wanted to talk to me about cybersecurity and the logs that we generate and all the information that gets generated, I might say, hey, let’s get some more artificial intelligence in there, and let’s get some automated ways to look at patterns and to deal with the outcomes. But as far as monitoring the Cloud, the question is, what are we using, when are we using it? Our people should know that. And so whether it needs to be automated or not, or you need a dashboard, I guess, depends about how much you have out there. There’s some indication that smaller entities may struggle using some cloud technologies, but they certainly are using SaaS technologies. They’re certainly using applications that are housed in somebody’s cloud somewhere, and they’re simply consuming them. And it actually lightens up the need to manage and to look at trends and so on. So I guess my challenge to everyone is, you have to know what you’re getting into when you get into it. If you don’t have the right resources to do it, you gotta find them. If you have the right resources but the volume of data is gonna be too great, then maybe we need to start looking at management portals or management technologies that allow you to do it. And again, that’s all that does is add cost to the system. And the question is, do you have the budget to do it? It’s gonna depend on the organization.

Speaker 0 [00:43:31]:

Let’s take a quick break. Let’s just we’ll be right back. And we did talk about talent, a little bit, but we didn’t go into in terms of what would it take for us to get our organization ready for the cloud? So, yes, the cloud is not new. We have been using it, and we have been trying to hire people, whether consultants or in house. But what’s the current situation? Is it really out of hand? How are we developing talent? And what does the future hold? What should we be preparing toward? So please stay tuned. Let’s do it. We’ll be right back and explore.

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Sanjog Aul [00:46:06]:

Alright. So, welcome back listeners. William Fandrich, this is a question for you, and this is about talent. So we have had talent in the past. We also have talent now and gonna have in the future. With the cloud coming in, what changes? If there is challenge related to talent, what is the major reason why we are having this crisis?

William Fandrich [00:46:30]:

Well, there’s no question. Oftentimes, people want to get to the cloud because they think it is a panacea and it’s actually more complicated to manage. You have to remember IT became, and within our organizations, we’ve become very sophisticated and specialized in certain areas, but what you really need is an end-to-end understanding. You’re bringing the network, the hardware, the software, capacity planning, and all those services together. So when you’re thinking about it, it’s a more sophisticated technology individual who understands the interplay of all those dimensions as you’re thinking about administering a cloud model. So talent is an issue. There’s not many out there who understand all those dimensions and oftentimes what you find is you gotta find some of your best talent, and you’ve gotta work with third parties, whether they’re consultants or others, to help get up the learning curve, but it is a commitment. Now the good news about it is there’s other areas of specialization in your organization you don’t need to be good at anymore. But that’s still a challenge.

Phil Bertolini [00:47:48]:

I’ll tag onto that with Bill and say that this is a special skill to the point where some of your internal people and your internal assets are gonna fight against you originally. They believe that as you go to the cloud that they may lose their jobs. Their jobs just become that much more difficult. And we actually had to go out and find a third party consultant to come work with us to make sure we were going in the right direction, because it was a skill set we just did not have on board. So I can’t stress enough, you gotta have the right people internally, and if you don’t, get the right people externally to make it happen.

Sanjog Aul [00:48:24]:

One last question, 30 seconds each. Bill, Phil Bertolini, I’ll start with you. What would be that one top mindset, leadership mindset someone should assume in a position of a CIO while dealing with cloud as a resource to be able to create the most value using it for the organization?

Phil Bertolini [00:48:47]:

Well, the first thing is it’s a business issue, not a technology issue. Make sure that your business culture and your leadership are willing to go along with you. And always remember, it’s all about the people. You gotta have the right people to make it happen.

Sanjog Aul [00:49:01]:

And, William Fandrich?

William Fandrich [00:49:03]:

Yeah. I would just add on to that. Everything Phil said, spot on. Just also recognize it’s a journey, and it’s not a panacea, and you need to approach it in the right way, with the right mindset from a business paradigm change, not a technology play to move through it successfully.

Sanjog Aul [00:49:26]:

On behalf of the show and our listeners, thank you so much, William Fandrich and Phil Bertolini, for sharing your views on how organizations can build a strong foundation with cloud as a resource for the most outcome that it can generate for the business. Thank you so much again. And, listeners, please like us on Facebook, search for CTN CIO Talk Network, and be sure to follow us on Twitter and LinkedIn. Thank you again for listening to this segment on CTN. This is Sanjog Aul, your talk show host. Till next week, take care, and God bless.