CONTRIBUTOR
General Manager and Editorial Director,
Techstrong Group

Synopsis

In this Digital CxO Leadership Insights series video, Mike Vizard speaks with Kyndryl CTO Antoine Shagoury about how cloud computing is driving the next wave of digital business transformation.

 

Transcript

Mike Vizard: Hello and welcome to the latest edition of the Digital CxO video podcast. I’m your host, Mike Vizard. Today we’re with Antoine Shagoury who’s the CTO for Kyndryl, which is the spinoff from IBM that focuses on IT services and a few other things. Antoine, welcome to the show.

Antoine Shagoury: Thank you very much, Michael. Pleasure to be here.

Mike Vizard: You guys initially came out of the chute with a deal with Microsoft, and now you’ve got a deal with AWS in place. And I’m assuming you’ll be working on all the big clouds as we go forth. And the question I would have to you is, are customers coming to you and saying, “We want to standardize on one cloud,” or are they using multiple clouds and you guys are becoming the conduit for making that happen?

Antoine Shagoury: Yeah. I think the best answer is probably the most fun answer. It’s a little bit of everything. We have a very diverse client base. Whether I guess the audience is aware or not, we’re servicing about 75 percent of the Fortune 100. We’re operating in about 63 countries. And as you get into that type of breadth of our client base, we have clients that are on different parts of their journey and are looking for expertise, partnership and even assistance in their migrations to cloud.

So we’ve gotten very – I’ll say it probably in an easy way to say it. Many clients asked for an approach to multi-cloud solutions, even looking at their workloads to see if there’s opportunities to optimize. And we have many clients are even just starting their journeys today. And if I, I guess, relate that to what we’ve been doing, you know, post the spin of IBM, it’s really building out that ability to be responsive to our clients and their modernization and their transformation work.

Mike Vizard: Mm-hmm. Speaking of a transformation work, it seemed to me, at least – right after the COVID pandemic – there was this massive rush to digital business transformation. And here we are a year or two later, and I wonder if folks are reining that in a little bit and trying to pick the ones that are going to matter most. Have you seen any effort to focus more of those efforts?

Antoine Shagoury: Yeah. That’s a great question. I think it’s – we’ve definitely seen, I guess, this mature – if I can use that word – in a couple different dimensions. So, you know, one, yeah; everyone ran for the gate when the pandemic started to really set in. And a lot of our effort in one of our areas is digital workplace. And as we started getting to that, how we enable the remote workforce, how we would enable remote operations. And although that had, you know – I’ll say cloud or implications around, you know, kind of virtualizing services, it really started to move from that initial area.

So corporate access, E-mail service saying operational services are poor. And as we got into more, how they could extend operations. A tremendous amount of conversations started to happen around, “What could we look at to further federate operations with our clients and then how we could address questions around Edge computing, Edge access, security obligations,” that went with that as well. So it really opened up the entire view, basically, if I can put it that way for you.

When they went from – again – that literally untethering the employee to really opening and liberating the operations to now what the implications that could be to actually mobilizing their business. And that’s where I think some interesting strategy and at least reflections, or even renewed views, on how companies we’re looking at, this business mobility, as a strategy now going forward. And this is where it’s – that’s where that maturity is coming from in my reference to you; where that conversation’s really coming to the front stage now.

Mike Vizard: Do you think organizations are building more custom software to drive those digital processes or are they trying to do that with packaged applications? What’s the mix?

Antoine Shagoury: Oh, yeah. There is a – there is a material shift in looking at services. So not going custom. So what do you want to call it? XAAS or anything-as-a-service or software-as-a-service kind of adoption? That is definitely taking the lead in the discussions. Now, if I look at, again, that client type or demographic, there is clients that have a tremendous amount of legacy and operations, and that obviously begets an approach for modernization deprecation. And that’s unique in its own right.

And that has a pass. But when we look at the majority of the discussions, it’s where we can actually build complementary services or introduce complementary services. So whether you even compare what the Cloud Alliance partnerships have been doing over the last few months, even going deeper into the VMWare Alliance as well, a lot of that has now gotten into that conversation. So what can we open up into the marketplace of services that allows them to move faster and allows our clients to move faster to the adoption or to Cloud adoptions out-servicing?

Mike Vizard: As we go down that path towards digital transformation, people are – at least using multiple clouds along the way. But how do you balance that out against – every time I seem to add a new platform, I have to add specialists and people to manage it. And the total cost of IT tends to rise with each new platform. So how do I balance multiple clouds, and my on-premises environments without letting the total cost of IT spin out of control?

Antoine Shagoury: Yeah. It’s, you know, funny. I think even that reflection – I can almost have fun, too. It’s like you’re leading the witness a bit [laughs]. What we – you know, when we start to look at this holistically, that is opening up a very unique niche in the market, is, “How do we create that simplification for businesses not to have to grow complexity or grow their complexity in operations as they get into multi-cloud or multi-vendor solutions around that cloud?”

So there’s – and I think you probably see this as well – tremendous investment in new observability tools, tremendous amount of work with companies like ourselves, trying to make sure we can insulate our clients from some of those complexities or challenges as they start to move their businesses potentially to two or three providers and different technical solutions around the globe. So there’s a very unique kind of approach to it. What I say is, 100-percent moving in that, into meteorite-type opportunity?”

No, it’s not. There’s still a lot of work around, “How do we close the gap?” Either from a software standpoint of management observability standpoint. But the dichotomy is really splitting between single partnerships, or heavily focused on a single partner – cloud partner – to where we get into these types of intermediary types of solutions that helps to imitate that complexity of operations and transition.

Mike Vizard: Mm-hmm. Do you think we might someday get to that one magical control plane that’ll rule them or is that, you know, hybrid cloud vision a little too ambitious?

Antoine Shagoury: Well, how about I say I think we’re betting some investments on it? I mean, we’re definitely betting on the investment of creating, you know, kind of that ease of – passport ease of access. So how do we start to provide, again, in the most simple sense? You know, the right passport of services for our clients and be able to automatically direct workloads where it’s best serviced; either regionally, provider-wise or technology-wise.

Or in an ecosystem standpoint, which sit he real driver here, by the way – is, “Where can we actually populate that right ecosystem or platform model that our client’s businesses can really take advantage of?” So yeah. I think we’re all definitely investing into that – I’ll say the ultimate control plane capability.

Mike Vizard: A lot of organizations, of course, are struggling to find the talent to drive these things. What is your sense and what is the balance of consumption of services going to be versus things that the internal IT team does? And how do I fringe the relationship between those two so they work hand-in-glove?

Antoine Shagoury: Yeah. Crystal balls are a little bit tough on the balance. I’ll probably get in trouble for saying it that way. But when I look at it, I think the – if I reflect a little bit on the conversation that there is gaining momentum and service subscription, right, amongst our clients. And on the one hand that can be very much a conflict point or a friction point – right – between internal IT, service providers or even service operators; that we also perform, by the way, within that capacity.

But when we get the right balance between the two, that’s where you start to have the internal IT teams that we partner with start to focus on – again – business operations, business services and we become a part of that enablement equation. Right? Within that capacity. So we do see an interesting kind of, I guess, shift in the layering of how we start to partner within our clients’ organizations. So early on, as you can imagine, there is a lot of ideation, there’s a lot of different innovation, there’s targeted solutions.

So you go after pieces of applications, pieces of business services which adds that complexity referred to earlier. But as we get deeper into that relationship and into the migration journey of their transformation or all the words that we love to hate sometimes and these next journeys is where we start to see that interesting balance. So, one, “Can week take some of the variability and risk out of looking at the solutions, looking at the portfolios across the hyper-scalers, across the enablers – right – and the partners, data providers, intelligent providers and the like – and then we get into that interesting balance where we now start looking at business value.

“So can we actually introduce better automation around RPA that’s pervasive across agnostic infrastructure?” Whether it’s on-prem or off-prem. “Can we actually make it seamless to the IT operations now as if it was before?” And that’s an interesting kind of driver that we’re – again, we’re definitely driving towards with our clients.

Mike Vizard: We hear a lot about Edge computing these days. What challenges will that bring to the whole equation? ‘Cause it seems like the IT environment’s becoming more distributive by the day.

Antoine Shagoury: I think this is probably a – this’ll be probably an interesting conversation in its own right. I think the – outside of some of the physical challenges in re-engineering, extending into 5G LTE capabilities and we’ve just done some – I don’t think – you’ve probably seen it…some of the initial Alliance work with Nokia as well, to extend that capability out. Also with Microsoft and AWS around extending Edge capability. So that’s kind of laying the foundation a little bit on the compute infrastructure.

But the tremendous amount of work that’s happening around data, data management, entitlements as well as things like SaaS-ie in regard to how to control security of access of information and even how we’re moving kind of the federation of that business process…you know, literally to these operating instances that we’re engineering into. So there’s tremendous work – again, going back into it – to design around the infrastructure, integration and communication.

So basically, integrating everything from SDX services or SD-WAN services to security services to data management, entitlement and then core operations. It’s a tremendous – again, tremendous investment happening in the space. It’s definitely on an emerging and a growth path and we have different clients – especially in some of the areas, like most recently Dal with us and Nokia, on really starting to extend out the opportunity to the Edge IoT-embedded capabilities as well as AI on core operations. And then reliability.

Mike Vizard: Sometime ago, I think we promised people there would be flying cars and that IT would be easy. We have neither. So the question is, “Is IT ever going to get easy or should we just accept the complexity and the messes it is and figure out how to go from here?

Antoine Shagoury: I – part of me wants to say, “We have to get used to the mess,” because I think we’ve lived in it, and a lot of us have actually kind of grown up in it. But there is a – and, you know, I guess I’m getting old, so you can laugh at me, too, when I say this. But there’s definitely a light at the end of the tunnel here.

When we start to look at the concept of operability and configurability, the concept around that has really started to meet, you know, kind of that CX or UX or human-centered design, you know, I guess of approach to it. So it’s really interesting, you know, kind of weaving out happening that I think is going to provide a lot of ease of operations and a lot more fluidity if I can use another weird term for a minute – right – on how we approach business opportunities.

So again. Ideation now and Tow innovation now is as real-time as a trading business. And you can now start to demonstrate things and put them into production. I did – a little while back, I’d done some AR work on fund creations with investment funds. And even just the concept of getting analysts out of the way, getting programmers out of the way, you know, and getting these designers out of the way, people were literally able to start to create an investment profile that they’ve never done before.

And at first, you know, you walk into it, “This is never going to work.” When you actually try it, it really starts to I guess bring to life the capabilities of what we’ve actually been working on for the last decade or so. So I do think that’s light at the end of the tunnel when we get into that ease of – I guess ease of operability or ease of access.

Mike Vizard: Well, let’s assume that the light at the end of the tunnel is not a proverbial oncoming train. But –

Antoine Shagoury: Oh, good man. Okay [laughs].

Mike Vizard: The question is this. We’ve been talking about the divide between businesses and IT forever in a day. You know, a lot of times, companies like yours play a key role in bridging that divide. But in your perspective right now in this land with digital business that we’re all in, is that divide narrowing or is there just as wide as ever?

Antoine Shagoury: No. I’m confident to say it’s narrowing. I’ve also had the luxury of operating on both sides of this fence. So I’ve been a CIO at a large – one of the largest custody banks in the world. I’ve run COL with exchanges. And obviously now doing this in the service providing sense, I’ll say the business value is king. It used to have – again. I said something the other day, and I love to get myself in trouble, so I might as well keep it up with you.

When I got into it, I said, “You know, a lot of the times when I grew up in the business side of things, the business did a lot of – when the business evolved, we lazily followed and we built a lot of duct tape, a lot of solutions. And a lot of times, we had worked on technologies that were interesting to us. And we figured out how to find the problem.” And that really is waning.

And now we really talk about, “All right. What’s actually being applied and how quickly can it provide value to that business or that business strategy?” And I’d love to say that was always at the table, but I can’t say in the last two years it hasn’t been at the table. Very different. So I’d love to say, “Hey. We’re a laggard.” Now we’re at the – so technology’s at the table. And companies like Kyndryl – the interesting with that…and this is probably a little bit of tangent to your point.

But when customers have partners like us, we understand their operations; we understand their business workflows. So from the start of day to the end of day, what’s cooperating in their business. And when you start to look at that modernization equation, you can’t separate those. So this is where it gets very unique.

And when we gave the reference before of internal IT versus that service kind of provider and that subscription kind of mindset happening or that kind of area growing, this is where that becomes the perfect recipe. So you start to see, “What is immediately beneficial to the opportunity to the business?” And whether it is a new, you know, business opportunity, whether it’s a new kind of market or a new product, it’s a very different and a very strong conversation of how to actually bring that together.

Mike Vizard: Well, let me ask you one last question, then. Historically, there’s always been the criticism that IT cannot keep up with the business and the business wanted to change faster than the IT could handle. And I wonder if today – with Agile and DevOps and a lot of these other technologies and AI people are talking about – are we getting to the point soon where IT might be more agile than the business can absorb and the rate of change is too fast for the business?

Antoine Shagoury: You know I have to say yes, right? So I actually have to say yes. And I’m actually being honest, too, other than being funny. So yeah. We could definitely open our shirt up and see the Superman t-shirt coming out. We are definitely – and I’ll say that we technologists….I can say it like the brethren that it is – we’re definitely in a very strong position to help drive business value again.

So we can be very much help to accelerate even beyond the concept of business. So ideation really becomes a proof point. And this is where first-of-a-kind proof of concepts really are borne by that agility that we’ve now developed into the microservices approach that we’ve brought in; the data visualization techniques and the technologies that we now have.

We can look at, really, what-if’s in an operating model that effectively acts like a digital twin if you want to use the analogy for what could happen to the business if we try something with them in that capacity. So we’re – again, we’re definitely at a very interesting business inflection point with technology capabilities.

Mike Vizard: All right. We’re good. Hey, Antoine, thanks for being on the show.

Antoine Shagoury: I appreciate it, Michael. An absolute pleasure.

Mike Vizard: All right, guys. Thank you for spending some time with us. This show and all our other shows can be found on digitalcxo.com. We invite you to check them all out. And thank you once again for tuning in.

Show Notes