Giants in Cloud

How Giant Companies See the Cloud

16 large enterprises talk about their use of the cloud, their plans, challenges they've run into and how they're approaching the skills issues.

giants no text
Credit: Chris Koehler
Cloud giants

CIOs and cloud leaders at large enterprises -- Campbell Soup, Dow Chemical, GE, Nationwide, Western Union, Whirlpool and others -- talk about their successes and challenges as they deploy resources to public, private and hybrid cloud environments. Here’s a snapshot of life in the cloud for each of these companies (organized alphabetically by company name).

steve phillips avnet
Credit: Avnet
Avnet - Steve Phillips, CIO

Avnet, a $27 billion distributor of electronic components, runs a hybrid cloud environment. The company has been building a private cloud internally since the early 2000s, while its public cloud usage, which is primarily limited to SaaS, began in 2008. Its biggest rollout, a pilot of Microsoft Office 365, is just getting underway.

Avnet is open to wider use of public cloud services, says CIO Steve Phillips, and IT has identified three scenarios where it makes sense for the company: to provide functionality that’s not a core competency for IT and wouldn’t sacrifice competitive advantage; when there’s a need to implement quickly and a cloud offering can reduce risk and capital expense; and when a short lifespan is expected.

Rich Adduci Boston Scientific
Boston Scientific - Rich Adduci, CIO

Boston Scientific engages in cloud computing in cases when “it’s mature enough to meet the needs we have,” says CIO Rich Adduci. The medical device maker is currently rolling out SuccessFactors’ cloud-based human capital management software.

Boston Scientific also has adopted cloud services for collaboration, accounts payable, invoicing and supply chain. The company is moving faster with SaaS than with IaaS workloads.

“SaaS allows us to quickly support our business globally,” Adduci says. “The ability to access a lightweight app, with a powerful back end, and spin it up in minutes, is really a tremendous asset when you’re moving in fast-paced markets.” The “maturity level” of IaaS puts that on the “near-term horizon,” Adduci says.

Joe Spagnoletti Campbell Soup
Campbell Soup - Joe Spagnoletti, CIO

Adoption of outsourced services in the mid-1990s led to Campbell Soup’s general “IS light” approach: Keeping internal that which is of critical importance in order to create "proprietary institutional knowledge," while giving other vendors the opportunity to provide services that aren’t so mission critical. "Now it's a core tenet of our IT strategy as a way to provide service," says CIO Joe Spagnoletti.

Campbell has developed formal processes, reviewed monthly, for the acquisition, management and recertification of its cloud partners. “There are no limitations to the things we're doing in the cloud, but we’re also not trying to do everything,” Spagnoletti says.

Paula Tolliver Dow Chemical
Dow Chemical - Paula Tolliver, CIO

Dow Chemical has so far moved more infrastructure than apps to the cloud, and its cloud-based infrastructure includes systems hosted by vendors as well as its own private cloud.

Moving infrastructure to the cloud is easier to justify financially because those are largely commodity services, whereas applications offer competitive advantage, says Paula Tolliver, CIO and corporate vice president of business services at Dow.

On the applications side, about 10% of Dow’s applications are in the public cloud, hosted by external vendors. Looking ahead, 30% to 40% of applications are expected to be in the cloud in three years. “We’re very optimistic” about the cloud, Tolliver says.

Josh Jewett Family Dollar
Family Dollar - Josh Jewett, CIO

Family Dollar runs a variety of cloud setups, including SaaS applications and infrastructure-as-a-service through Amazon. Systems that have been moved to the cloud include training, hiring and screening of new employees; SharePoint, through Amazon, for store operations info; and the Familydollar.com website, also run through Amazon.

In general, the systems that lend themselves to the cloud need to be used most of the day, don’t have a batch processing cycle and aren’t terribly data intensive, says CIO Josh Jewett.

Still, much of the retailer’s IT resides on premises. ERP and data warehousing, for example, are internal largely because so much data runs through these systems that “there isn’t a good business case” for passing it in and out of the cloud continuously, Jewett says.

Chris Drumgoole GE
General Electric - Chris Drumgoole, COO, cloud

General Electric has adopted a mix of public, private and hybrid cloud technologies. It’s been doing IaaS for some time, using both internal and external clouds, while SaaS has taken off more slowly, beginning with apps such as Salesforce.com and Cisco WebEx. "Our businesses have a choice -- they can use our [IT-provided] cloud services, or they can go to the open market," says Chris Drumgoole, chief operating officer of cloud at GE. "So we have to be competitive."Although the entire company is "rethinking our application stack from the ground up," GE also firmly believes in "taking the opportunity to transform the business" instead of simply re-creating the existing app environment elsewhere.

Overall, he says, "We're all in. We firmly believe that in the fullness of time, cloud is the operating model of the future."

Brian LeClaire Humana
Humana - Brian LeClaire, CIO

Virtualization paved the way for cloud at Humana. The health insurance provider has, over time, worked to virtualize its infrastructure to enable flexible, cost-effective provisioning, says Brian LeClaire, Humana CIO. "We use private cloud to share capabilities around data centers, and then leverage interconnectedness" to link elements that are private and public. "Now we’re moving into software-defined data networks. That last layer is becoming highly virtualized -- server, data, network virtualization." Humana works with Rackspace for IaaS and Salesforce.com for SaaS. "More quickly and at lower cost, we can dial up capacity on demand versus build out a full infrastructure and then later, when we no longer need that capacity, figure out how to repurpose that environment," LeClaire says. "We no longer have to make longer-term investments not warranted by demand."

Mike Macrie Land O'Lakes
Land O'Lakes - Mike Macrie, CIO

Land O'Lakes is using a lot of SaaS, and a little PaaS, says CIO Mike Macrie. Applications in the cloud so far include CRM, EDI, travel and IT operations. "Our goal isn't to move everything, but to take advantage where it makes the most sense," he says.

So far, so good. "We're getting twice the service -- uptime, reliability -- for the same level of cost we were paying before," he says. Also, "our abilty to implement a business request has been cut in half in many cases."

Randy Spratt McKesson
McKesson - Randy Spratt, CIO

McKesson runs a "huge array" of apps on its internal cloud for business processes such as new employee requisition, board meeting management, and compensation management, says CIO and CTO Randy Spratt.

On the SaaS front, the healthcare services company is in the process of converging multiple Salesforce.com deployments into a single instance.

On the infrastructure front, McKesson spent about a year piloting a converged infrastructure appliance before launching it into production. Today the appliance runs about 1,200 virtual machines, and a business-facing broker layer lets IT choose either a private, Amazon or Azure deployment model depending on the risk profile of the system.

Looking ahead, McKesson’s next major pursuit is full hot-hot disaster recovery capability, spreading the cloud across two data centers. At that point, McKesson will be close to migrating its legacy apps from current environments as they depreciate to zero value and building apps on new environment, Spratt says.

Greg Moran Nationwide
Nationwide - Greg Moran, CIO

Nationwide’s cloud efforts have been largely internal, built on a virtualized infrastructure with Linux running on mainframes. That approach provides the company with many of the benefits associated with cloud -- flexibility, standardization, manageability -- but in a private setting, says CIO Greg Moran.

Early on, there weren’t many packaged apps for the insurance industry, so Nationwide built its own. Now Moran sees more at-scale solutions for Nationwide’s side of the business, which changes the conversation between developers and the business units.

On the infrastructure side, IT today is more of a broker of hosting services -- both internal and external -- than a purveyor of specific tech platforms. It’s changing the nature of the work across IT, Moran says.

“As we look at what's in the pipeline for the next three years, what services and solutions do we need to provide? That's a change that's come on as we've been able to extract technology further.”

Ray Voelker Progressive
Progressive Insurance - Ray Voelker, CIO

Progressive Insurance today relies on the cloud mainly for SaaS applications that aren’t core to running the business, such as HR management and expense reporting, says CIO Ray Voelker. He estimates that 20% of the company’s business process applications are hosted and run in a SaaS model; that leaves 80% of those apps still running on the company’s own hardware.

On the infrastructure side, Progressive uses IaaS largely for experimentation at this point. “Given the highly regulated industry within which we operate, we need to keep our data private,” Voelker says.

More widespread use of the public cloud is a ways off, if ever, at Progressive. “We’re likely to continue to watch the move toward hybrid clouds very closely as that technology continues to develop and mature,” says Voelker. It would be “a whole new ballgame” if Progressive were some medium-sized business that didn’t have an extensive data center footprint, he says, but “we already have assets we own that we can leverage.”

Bob Fecteau SAIC
SAIC - Bob Fecteau, CIO

SAIC’s cloud pursuits impact both its internal operations and its commercial offerings. Internally, SAIC uses cloud resources including SharePoint, Taleo for talent management, and ServiceNow, a portfolio of products for managing IT service delivery.

As a systems integrator, SAIC provisions cloud capabilities for its customers, many of which are government agencies. That duality benefits both sides of the house. CTO Charles Onstott, who’s responsible for SAIC’s cloud line of business, can learn from internal IT’s deployment of a SaaS app, for example.

When approaching customers, it lends credibility that SAIC has implemented and is confident in the security and reliability of a particular tool. Other times, a tool will be implemented first with customers and later deployed internally, Onstott says. Internally, as an IT capability matures, CIO Bob Fecteau doesn't hold it inside IT; he turns it over to the line of business and purchases it back as a service.

Wayne Shurts Sysco
Sysco - Wayne Shurts, CIO

Food distributor Sysco recently completed a major cloud project: deploying Microsoft Office 365 for 20,000 users. “There’s nothing in my managing email that’s a competitive advantage. I’m perfectly happy having someone else manage that for me,” says CTO Wayne Shurts.

Sysco also has 15,000 of its users working with Salesforce.com, which has been in place for about a year. “We did a rollout of that product to the entire sales force, across the U.S. and Canada, in less than 18 months,” Shurts says. “If we had to stand up the environment and manage it, we never could have moved at that speed.” Sysco wants to move its HR applications to the cloud but hasn’t decided on a vendor.

Looking ahead, Sysco is considering master data management in the cloud.

John Marcante Vanguard
Vanguard - John Mercante, CIO

The Vanguard Group is pursuing all aspects of cloud computing: IaaS, SaaS and PaaS in both public and private models. The investment firm, which manages approximately $2 trillion in assets, has partnered with application vendors to migrate internal corporate systems to SaaS-based public clouds, says CIO John Marcante.

The private cloud deployment, meanwhile, is “about streamlining our development model,” leveraging IaaS and PaaS, he says. Speed to market, higher utilization and improved productivity, especially from a devops perspective, have been the biggest gains. The key to these deployments is freedom, portability, mobility and “not locking yourself in to any one vendor,” Marcante says.

Sanjay Saraf - Western Union
Western Union - Sanjay Saraf, CIO

Western Union has selectively deployed cloud apps, including Salesforce.com, Workday for human resources, and several from Adobe. “We’ve made some reasonably safe bets with vendors who are recognized leaders,” says Sanjay Saraf, CTO at Western Union. The company is in investment mode and not necessarily looking to “take costs out” by using the cloud, Saraf says.

That said, he’s convinced that leveraging cloud technologies in select areas has delivered bang for buck, especially with time to market. The company is trying to meet corporate growth targets and improve the customer experience. “There are growth targets versus cost targets. Those are well communicated,” he says.

The company is taking a prudent approach to leveraging the cloud for infrastructure. Western Union is wary of moving too fast because it must comply with hundreds of local, national and international financial regulations. “Money movement is complex,” Saraf says.

Michael Heim Whirlpool
Whirlpool - Michael Heim, CIO

Cloud is part of a strategy to make Whirlpool more competitive and more nimble. Although some industry skeptics worry about security and risk in the cloud, CIO Michael Heim says those issues are improved by cloud computing because the vendors stay up to date on the latest technology. Security problems arise from “how you’re managing, not where it is.” Whirlpool is executing several big cloud projects: moving to Google apps, which will allow engineers and designers in four design centers worldwide to collaborate more easily; implementing VTEX, an e-commerce suite from a company in Brazil, for Whirlpool’s biggest e-commerce market, Latin America; deploying ServiceNow IT service management software for internal operations. Whirlpool is also working with IBM on cloud-based e-commerce, disaster recovery and Internet of Things projects.