Storage roundtable: Cloud and MSPs

Digital transformation is a buzz phrase that is being used in almost every channel conversation to describe the activities customers are undertaking to make sure they remain relevant. What it means for the channel in practical terms is plenty of spending on infrastructure and for those operating in the storage world it has also had an impact.

The aim of the roundtable is to gauge just how much of an impact it has had on the storage world and just what it means for vendors and their partners.

The best place to start is to get the view from the coalface and to find out just what is happening with digital transformation.

SCOTT REYNOLDS: Generally when we get engaged in digital transformation projects, much of the decision-making process around how to best drive a new digital strategy has already happened inside the business. It’s usually then left to the IT teams to actually implement these changes and solve any problems along the way, and so they will often consult a partner like us during these stages.

‘Digital transformation’ means different things to different people. It may relate to IoT. It may relate to hybrid IT and IT automation. In fact, we often see that those two actually go hand in hand; if you want to embrace hybrid IT, you have to embrace IT automation. You can't just do one or the other in isolation.

At Logicalis, we also see quite a lot of data centre consolidation projects as some global businesses downsize or decide to adopt cloud-first strategies, driving a need to have a smaller footprint. Many customers no longer want to own and operate their own data centres. The primary drivers for this that our team sees are probably productivity, internal process and efficiency as well as product and services innovation.

Q. Is the experience of Logicalis something that vendors have also seen in the market?

JAMES LOWE: You get a different answer depending on who you speak to within whatever part of the organization. So, regarding IBM, if you talk to GBS you'll be likely be having a conversation regarding the strategy behind digital transformation. This discussion regarding digital transformation will drive spend.

Q: So the digital transformation-related projects we're seeing are really about consolidation, being more efficient, converging, putting, moving stuff to the cloud to simplify, but not as much on that front, on doing more analytics, more value from our data, less on that front?

SCOTT REYNOLDS: Interestingly, at Logicalis, we have seen both sides. Customers often ask where do I place data how do I manage it, protect it, back it up? Essentially, they want to know how to carry out all the operational duties. But there’s also an increasing focus on how to shape and structure that data so that it can actually start to be understood and therefore leveraged.

So, the conversation turns to assessing their data landscape, indexing the content before we even talk about what platform to put it on. The customer needs to understand what they have before they can look at the BI piece on top in terms of how can they convert the data.

MARK SHAW: Digital transformation is a reality for most organizations from the top down and, as its effect filters down to IT we often see that it is the driving force for change within the traditional IT department and a real focus for how businesses spend their money on IT.

Instead of having an IT budget that’s shrinking, there is growth. But the portion assigned to traditional infrastructure is getting smaller. IT budgets are being assigned to projects and tools that will help the business digitally transform. CIOs want to invest in initiatives that align to the overall business strategy, that reduce IT complexity, and that set the stage for future innovation. The pressure is on for IT teams to do more with less.

There are key strategic long-term transformational initiatives, but the broader near projects are still more IT focused- things like, multi-cloud, automation, compliance and Data Centre modernization and consolidation. The reality is that all of the near term “projects” are the enabler for IT, allowing it to be in a position and to be agile enough- with the right skills- to help the business really transform and achieve key strategic goals.

JOACHIM MASON: We need to consider the way that we consume applications as individuals, and as organizations. We are seeing scenarios where IT is potentially less isolated, because it's no longer the organization which just says ‘no’ all the time or is slow and difficult to react. Organizations have to give their IT departments the toolsets they need based on operational analytics to truly know what's going on. This helps provide the visibility needed to understand what's going on from the end-user experience, from customers, and all the way through to what we can refer to as the IT stack. There's a lot of value around the visibility of what's going on, and not just from an operational context but also a business context; all of a sudden they become the same thing. You can actually monitor, step-by-step at ‘a line and code’ level, what is going on with a particular application for an end-customer or a group of end-customers. That's a level of insight that’s very valuable to do. It’s a much more digital market.

Q. Did GDPR have a big influence on spending as customers looked to get the data side of their operations in order?

JOACHIM MASON: I think the thing we need to guard against is these industry buzzwords. ‘Digital transformation’ is one. ‘Cloud’ is another. ‘GDPR’ is especially bad - you constantly see countless things on Twitter or LinkedIn about it. And it all becomes meaningless, because you switch off when you see it. GDPR is much more involved with people, process, and technology engagement. There's no one thing that will be a silver bullet.

ANGELO APA: Organizations are realizing that they have to change their business in order to survive. The industry can offer a bunch of tools that could or could not be used in order to assist in changing that business model. It has nothing to do with IT to begin with. I think the way that we then go on to think about data and the value of data is something which underpins everything that all of us in this room have to give cognizance to. This is no longer about, in our case selling hardware. It's now about how is it that you can help an organization to impact their (P&L) through the use of the data which they own.

But I think from a challenge perspective, what we have to think about is how do we help our channel to ask the question about whether or not an organization can survive in its current format or whether it needs to create some sort of future-defined data center to allow them to take advantage of the value of that data.

So, there's a way of looking at this in order to gain advantage as a channel partner rather than us making the mistake, which you're alluding to and you do not see these things on Twitter; it's just somebody trying to sell us something rather than going in and having a conversation with a customer to help them to understand that there may be other ways of looking at something in order to drive (P&L) impact from that data. And that's kind of the way we are looking at it today is how we can help our channel partners to do that.

AAD DEKKERS: We need to be looking at the different types of customers and the size of the organization. I think there is a different picture for each company, depending on its type and size. For example, with midsize enterprises and distributed organizations the challenges are growing around security, GDPR and digital transformation. For these organizations it's about adding value to a business and being strategic with three, four, five, six, seven or eight people.

If you can simplify this and help enterprises reduce the complexity and continue to basically leverage the same type of platform, they will be able to spend more time on strategic business operations. And whether that's within the company or the cloud, that depends on the nature of the business.

JOHN ROLLASON: It seems to me like the cloud changed everything, data changed everything, GDPR changed everything and nothing sort of thing, and it seems to come – we look at projects, it comes in two ways. It’s sort of internal pressures, people realise they have to do something different. Or there’s an external pressure of somebody disrupting somebody else’s market. And then that drives real – some digital transformation. And then to your point, we also seem to get the digital transformation projects but actually nothing of that sort, people doing exactly what they were last year they just have to tag it to digital transformation to get project funding type thing.

JOACHIM MASON: I think that it’s the technology that continues to change. But I think we need to be careful with the idea that if customers or partners implement one particular solution they are destined for digital greatness. That’s not necessarily the case. There's going to be very specific places where this could be possible, particularly when we consider potential impact on business models or employee experiences. The main point to consider though is that we all use technology differently to how we did 10 years ago, and that's relevant for everyone both professionally or personally.

STUART GILKS: I think also from a business perspective, there's more challenge around possibility, more challenge than traditional IT. What are they going to turn to that will allow them to raise their game? IT has an ever more demanding customer, which is pushing the boundaries and asking what can we do with the assets we’ve assembled, both digital and infrastructure.

MARK SHAW: It’s an interesting time because those within the channel and their customers are all part of the same GDPR learning process and trying to figure out what’s next. Many businesses are in the midst of a comprehensive review of processes, people and technology in order to provide a reasonable level of protection. We can help with GDPR compliance in some very specific ways. And often when we're selling to GDPR customers are bringing us into conversations on the future of their business- what does that mean for compliance, governance and legal, for how the business will look and operate in the future.

ANDY BREWERTON: With regards digital transformation, we need to understand that is the trigger that initiates change. We talk about digitization of an industry or a vertical, and it is usually a disruptor coming in to the market that makes everybody else react with some kind of digital transformation. A common reference is Uber versus the London cab; that's a classic example of somebody using IT to digitize an industry, then everybody else having to change really quickly to catch up.

JOACHIM MASON: Yes, because in that scenario, your differentiation is defined by your application. When you think software-as-a-service (SaaS) you sometimes think something ‘off the shelf’, you think of something which is fairly horizontal as a backend business process. However, nowadays it is your application, and there’s so much pressure on the application development teams to innovate for, and on behalf of, customers and businesses. If businesses can get this right it’s been shown that they can differentiate and disrupt the market very quickly. You want to appeal to the application development community because they're charged with the responsibility to innovate.

Q: Last year was actually the first year where we saw more deployment coming to off-prem versus on-prem. So hybrid cloud is the reality and more workloads and applications are moving to SaaS. Are you seeing that?

JOACHIM MASON: You hear the term ‘hybrid cloud’, you hear the term ‘multi-cloud’ and there are different academic definitions for both. If you think about it though it’s everything that is integrated on-prem, and public cloud is about accessing more than one external cloud service. If you put those two things together it’s top of the IT department’s list.

SCOTT REYNOLDS: Every single client we're talking to at the moment wants to enforce a multi-cloud or hybrid strategy because they're always going to have a bunch of stuff left behind. We estimate maybe between 40 and 60 percent of normal enterprise applications are not going to go to public cloud.

In the last 6 months, I have not met a single customer who doesn't have a cloud-first strategy where SaaS is top of the list. And customers with an existing enterprise application customised to their business model and designed to meet their workflow processes, cannot run it in any of the SaaS provided models because they do not allow for customisation or tailoring. So, instead, they have to manage those on-prem.

JOACHIM MASON: I think what customers actually want when you get into the conversation is ‘cloud-like first’. They don't really care where it is or what the execution workload venue is. But they want the experience. They want the ‘cloud-like’ experience. They want the economics of it, the agility, flexibility, all those words that we all use in every single presentation. That’s what they want.

ANDY BREWERTON: I would agree with that, customers are wanting a cloud-like experience, and are increasingly understanding that this means a combination of on and off prem infrastructure. In the customers mind, it’s about the speed of execution. If the infrastructure is designed correctly, then that could deliver “cloud-like” on prem,. The key thing is that it all really comes down to how much it costs to operate in a particular location. Then how can that be measured? Organisation need to keep asking, Is that currently the most efficient? As the application matures, does somewhere else become a more cost efficient way of running the application?

ANGELO APA: People are interested in the economics of cloud more than they're interested in the ability to host it somewhere else. It's basically how can I pay for what I use rather than how do I pay up front. That's the real question that's being answered here, the flexibility and the availability and all that stuff is what we use is used in order to go out and try to sell the stuff. But in terms of what it is that the customer is looking for, the customer is looking for a model that they can they say, "Today, I want to use that, pay for that. I don't want to pay for it any more." And that's what this is I think really all about.

MARK SHAW: I think the reality here is that there is pressure to deliver new services at the speed that the business needs are driving adoption of Public Cloud, when IT is not capable or ready to deliver those services. It is easy for a department to purchase a SaaS application, rather than wait for IT to deliver, or for a developer to leverage new services in Public Cloud platforms.

This- and the fact that hybrid cloud has become the new normal for many enterprises- leads to new common challenges for a business, which often center around, or are caused by, silos forming within the organisation. If you’re responsible for one portion of your infrastructure, you still require visibility and control of other data in other locations and applications.

When it comes to SaaS, some businesses find themselves  I see similar challenges and issues for customer that you've seen in business often.  It might be more of an issue on the digital side of things.  But it looks like silos and if you're responsible for that portion of your infrastructure, then, all of a sudden we still have compliance and governance, less control.  We still require visibility for all those data in all those locations.  So, they're struggling with SaaS applications because they were initially introduced that were brought to them by a department outside of IT the marketing department, but IT are then expected to provide the business with the control,  governance and cost management it needs, now needs IT control and up until this point there has been a lack of visibility. It’s a real pain point and a challenge- it needs to change for organizations. So, I just see a big change, real pain, lots of silos in information and how – the change, how do you remove those together in a normal controlled way that IT has done for a long period of time.

JOHN ROLLASON: I would say 99 percent of companies are using public cloud somewhere.

AAD DEKKERS: It depends on which type of applications you are using. There needs to be a balance between applications, costs, performance, compliance and the experience of the application. There are so many different parameters that determine the location of the application.

JOHN ROLLASON: It's like balance of investment and that seems more important really than will you use these models.

JOACHIM MASON: It’s interesting that some customers seem to be turning to the cloud to save money, as in some cases it can cost more. In some instances, customers are prepared to accept that because it might give them some sort of business advantage. But you don't get economy of scale from utilizing cloud. Very often, the driver for the cloud piece is because those are the toolsets that we’re developing. So, they've got that responsibility to code and innovate. They're going to do that quickly and they might not care what sits underneath. The business case though, is transforming the reputations of IT teams as ‘the enemy’, into entities which are seen to fully support business environments and business-critical outcomes. The thing to guard against in that scenario, however, is developing such that you are completely locked-in to a particular cloud environment. There are two or three well-known ones.

Q: Are you changing the way that you sell and the way that you package your infrastructure solutions to really support this IT guy?

ANDY BREWERTON: A common goal of any customer is to simplify how IT is delivered to the organization, how to drive efficiency in order to free up time and budgets so innovation can occur. However, it is not uncommon that by moving into a hybrid world, the IT guy could have a more complex environment so delivering the opposite. This is because now, you're not just monitoring different infrastructures and different applications in the datacenter, you’re now managing the business relationship with your cloud provider. We are developing tools and components of our platform that drive automation and therefore help simplify these often increasingly complex environments.

JOACHIM MASON: Yes. I agree with that. The responsibility to simplify has never been greater but nor have the complexities ever been more apparent. You're trying to get a simplified ‘cloud-like’ (if that’s the phrase) experience for your customer and maybe IT. It could just as easily be someone in the business. It could just as easily be someone with an application responsibility. You're trying to be relevant to them, and driving that relevance requires different approaches and meeting different priorities.

Q: As things become more complicated that must be good news for the channel? Are you seeing like an increase in services revenue around stuff like this?

SCOTT REYNOLDS: Yes, definitely, without a shadow of a doubt. A lot of it is based on the fact that clients who move in this direction want their existing IT staff to manage the new, but they still need to manage the old. So, there's a huge opportunity for channel players like us to step in and help manage the older systems. Or, if it’s the other way around and the organisation needs to embrace the new but doesn’t fully understand it, then we can also help there.

More often than not, our first point of call is to establish why the business fundamentally wants to change its systems. Sometimes it’s based on perception; for example, if people inside the business that think cloud is easy. It's cheap. It's scalable. It's more agile. But, the moment you move into the cloud model, you lose some element of control. So, you have to layer complexity on top to manage the new environment. But most clients I talk to aren’t going to employ 20 more people; they're still on the same headcount.

So, there's plenty of opportunity out there for us to help. Our challenge is that the landscape has changed dramatically. It used to be very simple and one-dimensional, and now it’s very broad. So, we have to make sure the skillset within our business can match this.

But we also have to accept the fact that there's huge competition in our space.

JAMES LOWE: The complexity is an interesting discussion point because I think as that gets more increased, then, not only do most resellers have to scale out their workforce to do but partnering opportunities suddenly also become much more viable. So, I see the ecosystem beginning to have to mesh to deal with that increased complexity. We as organizations are having to be much more open in how we talk to our partners, often who were competitors 12 or 18 months ago. Now, we're talking in a much more collaborative way about how we’re going to market, and that's been driven by complexity of the requirements.

SCOTT REYNOLDS: Yes. From a delivery point of view, we can't do this by ourselves; we need people to help us in all these different areas. Sometimes, we approach competitors sitting across the table, and in the bid process we end up partnering together to try and jointly win an opportunity. This is possible because we realise that we’re greater than the sum of our parts. We have had to expand our vendor portfolio to accommodate this complex world and access complementary tools and technologies. In fact, we often find that widening our partners also introduces us to other players- an added bonus.

JAMES LOWE: People haven't got the skill sets especially with some of the new technologies coming down the line. If your heritage is in a particular legacy technology, and the adoption of that technology is now being driven by A.I., then partners have to look at partnership. Otherwise, you don't get the opportunity to sit at the table, so, yes, absolutely.

AAD DEKKERS: Our partner program was called “community” program for a reason, to basically bring those partners together. And if you go down to the infrastructure level, there are some partners in there, let's say specialized on security and others that are focused on infrastructure. The idea is to ensure they work together in a complementary way.

Partners are looking to build skills - they have a pretty solid business and want to work together to satisfy customer needs. The vendors we have been working with also stimulate a cooperation between partners, everyone is in agreement that this needs to be complementary and as a whole it’s agreed they won’t ‘bite each other’.

SCOTT REYNOLDS: I'll probably say there are less than 10 partners in the U.K. that probably do most of this themselves.

In the next part we cover the growth of managed services, hyperconvergence and hear from the vendors about how they are helping partners seize opportunities in this world of digital transformation.