Leadership Insights: IT and the Cloud

Transcript

Mike: We’re here on the Digital CxO channel for TechStrong TV with Lars Cromley, who is a technology fellow and principal at Deloitte. Lars, welcome to the show.

Lars Cromley: Hey, thanks for having me, Mike.

Mike: You just wrote this huge paper about the impact that the cloud is having. And from my perspective it seems like we’re in maybe three different phases simultaneously. We have folks who have lifted and shifted stuff from on-premise onto the cloud, and now we’ve seen the rise of all these cloud-native technologies, and now I wonder if there’s a third phase coming where things are just going to be more turnkey and I just kind of stitch together a bunch of stuff through APIs, and I’m going to compose stuff as I – as we go forward. Does that make sense to you? Is that a way to think about this? Or, how are you seeing the whole evolution of the cloud these days?

Lars Cromley: Well, it’s like – it’s a great question. I think the way I look at it, there’s the three you mentioned, and then there’s a fourth one, which is everything in between. So, I think there’s that. But then, you talked about stitching APIs together, and it makes me think of some of the open-source projects that are out there, things like GraphQL and Apollo. And when I look at how successful some of those projects are and how they’re being developed, I mean, you’re absolutely right, that is the future of the way we’re looking at applications and the way they develop and the way that we start developing platforms is by creating smart data access interfaces that are much more capable of driving the demand of the developers and the engineers to look forward towards innovation and find new ways of connecting data.

Mike: Do you think the relationship between IT and the business overall has changed dramatically with all these shifts to the cloud? Or is it just a different venue but the conversations are pretty much the same?

Lars Cromley: Well, I think if done correctly it’s a very different conversation. I think there’s a couple different conversations that are being had, and I think the business that’s embraced IT as what I would say is a value-enabler, rather than a cost center, obviously has a leg up. There’s a great quote from Gartner a couple of years ago – I want to say it was 2012 or somewhere around there. It was like “Business today is essentially digital software enablement.” And if you want to compete and thrive in today’s economy, you have to have an increased competency in software delivery. And you can’t do that without IT. You can’t do that without the business working together and figuring out “What’s the real value that we’re delivering? And how are we delivering that to the customer in new and exciting ways?”

I think a lot of times you talk about innovation and how that kind of spurs people to kind of start doing new things and figuring out how to do it, but there’s a kind of conflation there between innovation and invention. And so, while invention is really cool – everybody likes to have the cool, new, shiny thing – a lot of times what it’s really about is innovation. And when we say “innovation” it’s about making it accessible and scalable for the masses and being able to deliver it. And that’s the really hard part.

So, if we think about innovation, you can’t do that without the ability to deliver and the ability to execute. It’s like a hard slog versus a really cut, neat “Hey I had a really cool idea. Wouldn’t it be cool if…” blank? Coming up with the idea is almost easier sometimes than actually delivering it.

Mike: In your paper you talk about digital ecosystems are evolving. Do you think business leaders get what those are and what the implications are? It seems to me how strong your ecosystem is and how robust and how flexible it is will become the basis around what you’re going to compete, but what are you seeing?

Lars Cromley: Well, sometimes it’s not even a matter of competing. I think this is – I think the interesting thing, the competitive advantage comes in how do you enable the people that partake in your platform to work with each other and combine that within an ecosystem? How do you facilitate the exchange of value in that ecosystem? If you look at the way – something like LinkedIn is a really good example of job seekers and professionals. That was one aspect. And now you have learning and development that’s being supplied on there. You have professionals that are creating the ability to deliver more value.

And I think the executives that find ways to facilitate that value and kind of even maybe crowdsource or creatively source some of that through the people that are partaking in their ecosystems are the people that are going to have an advantage. And I think there are some executives that understand that. By and large, I think if you understand that and you understand the value of platforms and the way they work and how people partake in them, you have a massive leg up.

Now, that’s not to say that every executive is going to see that. Not every business is a platform business, but I think that the ones that are really thriving and have a good advantage in this market right now are the ones that do see the benefit of that.

Mike: We hear all the time about how companies today are essentially a software company, an IT company that happens to make something or deliver some kind of service, but beyond that do you think that the lines that exist between companies in various vertical industries is starting to get thinner and thinner and it’s just becoming easier for companies to jump from one segment into another, and I may wake up one day and have a whole new competitor I never thought about?

Lars Cromley: Yeah. I think so. I mean, I think that what we’re seeing now, though, is – to kind of take a step back from the question a little bit, but first, let’s look at how companies grow and why they grow. People look at Amazon. Look at how many different lines of business Amazon has. And while they started selling out books they rapidly found other lines of business and other ways of making profits and extracting more value from their business. And if we were to say, “All right, well, that’s good enough, they’re just going to stop there,” well, that’s when they start getting left behind.

So, you have this moral, this imperative as an enterprise to continue to grow. And sometimes that means finding new ways to compete with people, new people to compete with, new industries, new lines of business. And sometimes it’s serendipitous and it just kind of makes sense. I used Amazon as an example; if I use them again, though, it’s like having that ability to run infrastructure at scale and being very good at it and then finding a way to profit off that and to give the public something they need, give the market something that they value. I think that line is blurring. And it’s been blurring for a long time. I think even going all the way back to mainframe timesharing, finding interesting ways to extract more value from the investments that you made in the industry is important. I think right now what we’re seeing is that the investments in IT over the past two decades are monumental. And a lot of the things that we do around kind of curated experiences online, digital ecosystems, all of these things – I don’t want to talk about a bunch of buzzwords, but basically making the product-buying experience or even the product more about the experience and the benefits for the customer of how they feel is only going to drive that even further.

And this is hugely fueled by data. And we talk about data-driven decisions; it’s a huge topic over the past five years. As we get more data – data is something we collect. There’s a quote from Kelsey Hightower: “Data is something we collect. Information is what we get once we analyze it. And then, knowledge is what we get from it when we understand it.” And that’s what’s happening today, is we get more and more data, we get that information, we analyze it, and now we have knowledge about how we can go to the market in a different way.

Mike: Is the way we manage data changing? If I look back in time, data was kind of a burden and now I think we’re trying to think about it more as an asset and manage it in isolation from the applications that were used to create it and the place where it’s stored. Are people changing their fundamental mind about how they think about data? Or does that still need to happen?

Lars Cromley: Well, there’s a couple things in that. That’s a great question. A really, really great question. Everybody says data has gravity. And I would like to say I think that in the future – and I’ll caveat this with I think this is a little further in the future, but I think what we’re going to find out is that while data has gravity we need to kind of reverse gravity and start putting all that data towards compute. Where the compute is going to lie, where you’re going to run it is where that data is going to have to be massed and aggregated. But if I look at it, I would say it’s still very much a burden. There’s still a ton of overhead. There’s all types of different data. Data governance has never been more important than it is now. With how accessible and available data is, it’s really easy to wrongly expose the wrong data and provide the incorrect safeguards around personally identifiable data, health data, PCI data, all these things. It’s a veritable dungeon of possibilities that you can kind of step into some type of calamity.

But I think that finding ways and being able to sort through the data, that truly is valuable. It gives you insights into your business. Yes, it’s definitely a burden. I mean, it’s a burden in protecting it but it can be very much a boon. And data access and data governance is more important today than it ever has been. And it’s only going to continue to get more important.

Mike: We hear a lot about edge computing these days, and as far as I can tell most of those edge computing platforms are ultimately connected back to some data center or cloud service. And I can’t help but wonder if the term “cloud computing” itself is just going to dissipate because, well, everything is a cloud, and once everything is a cloud then what’s not a cloud? So, what’s your sense of where the notion of the term “cloud computing” evolves from here? Is it – has it outlived its usefulness or is something else going on here?

Lars Cromley: I don’t think it’s quite outlived its usefulness because I think there’s still very much different modes of operation between very many different IT organizations. And the way that they manage their IT and their resources and their assets and the way they manage their compute databases is very different. So, if you look at the way that traditional data centers have been handled and accessed and managed, there’s a lot more emphasis on the physical, on the physical hardware, the racking and stacking, all of the other things that go into it. And then, you have software-defined networks, software-defined compute, and there’s programmable APIs that expose resources.

And I think that you hit on a really good part, is – and I think this is something that was really important in the paper. When we wrote that there was only a handful of times that we mentioned public and private cloud. And I don’t think there’s going to be much of a differentiation in the future. It’s just going to be cloud. And I don’t think it’s going to be analogous or ubiquitous in the sense that it’s just going to replace the data center. The data center will still serve a purpose. Not to say that the world is hybrid but I think that edge computing is going to be much more explosive over the next ten years. And this is where I think I said previous – you know, a caveat, a little bit further in the future – when we start thinking about how do we flip the gravity, how do we start pulling that data and amass and aggregate it, to your point, it’s going to be connected to some type of cloud, some type of data center. I think that in the future it’s going to be all cloud. I don’t think that – I think that eventually many companies, many organizations are going to start thinking about “What’s my core competency? Is my core competency running digital infrastructure? Is that a part of the business value that we’re delivering?” And I think if they have a realistic answer and they’re really honest with themselves, no. If I look at a company in the beverage and hospitality industry, they’re – they exist to solve world thirst. They’re not in the business of racking and stacking servers. And I think that the more time they can spend on the steak versus the sizzle is where they’re going to go.

So, I think that in a – in a nutshell, I think that cloud world is here to stay. I think that the data center is going to be relegated to a much more specific focus of managing edge devices within the local environment and facilitating a connection to cloud.

Mike: Do you think post-COVID-19 – for as long as I can remember at least people were talking about the divide between IT and the business, and yet I see more IT people who are business-savvy and I see a lot more businesspeople who are also IT-savvy. So, do you think that that divide is finally coming to be bridged? Or is it just always going to be with us and we have to find some way to work around it?

Lars Cromley: I actually think it’s going to be bridged. I think that we understand more now about IT and we’re becoming more technologically savvy over all parts of the organization because we have to. And it’s a matter of adapt and evolve or go extinct. And I think that the people that are able to adapt and evolve to include a consideration of the rest of the organization, including IT, are only going to be served by it.

Mike: All right. So, what’s your best advice to people to achieve that goal? Should I just take the entire C-suite and lock them in a room somewhere? Or we’ve got to go on a big, giant retreat? Or – how do we kind of get there?

Lars Cromley: Yeah. Well, I think if we look at it holistically, there’s not one answer. And the reason why is because no organization is exactly the same. I think Deming said it best. When we look at – to achieve a profound understanding of a system and we look at the organization itself as a system it’s the most complex system you’re ever going to work on. People are inherently very complex. You have all types of motivators, all types of drivers. The most important thing is starting to look at how – where are you today as an organization, and starting from where you’re at now, how do you get where you want to be? And that does involve collaboration. I don’t know if it necessarily involves locking them in a room but it does involve collaboration and being very honest with what you want out of the business. And it’s focusing on those project outcomes and the goals and the mission of the company and having all that aligned and saying, “How do we do this? And how do we all do this together?” Because that’s what’s happening. We’re all in this together.

Mike: All right. Put the politics – I’m sorry. All right. Put the politics aside, guys. Lars, thanks for being on the show.

Lars Cromley: Hey, my pleasure, Mike. Thank you very much.