by Divina Paredes

Outsourcing in the age of cloud: Kiwi startup uses own software to assess next move

May 29, 2017
Big DataCareersCloud Computing

“We were born in the cloud, our application from day one has been cloud native,” says Neil Calvert, chief operating officer of LINQ.

“Our organisation has been run that way from day one when we started. We made a fundamental decision we would pretty much own no physical structure.”

That means, for instance, using Office 365 and finding solutions in the cloudas they run the organisation, he states.

This approach helped them during their recent move to Amazon Web Services (AWS)for their cloud infrastructure.

The startup, with headquarters in Wellington, provides software to help companies across the globe visualise their supply chains.

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We were able to demonstrate our security credentials to the most demanding of customers in the public sector.Neil Calvert, LINQ

“Our business helps companies understand how to focus on the information flow and verify that the people and systems are working harmoniously and efficiently. It’s a solution that can be used for any kind of transformation project,” explains Calvert.

Calvert says they used their own software to assess whether they would undertake the migration themselves or outsource the work.

He says he and co-founder and chief technology officer David Swann investigated whether Rackspace, which they had known from a previous job, will be able to provide what they needed.

We modelled a target state for what our business will be like if they take on the outsourcing path, and included the cost of implementation.

When we modeled the cost of doing it ourselves and the time it would take, we realised we would have at least a six months journey ahead of us to get to the point where we would get an infrastructure expected by by our customers in terms of security, performance and scalability, he tells CIO New Zealand.

“We looked into other options, including hiring our own AWS-certified experts, or going with a smaller local provider, but these were both more costly and didn’t come with the extensive tooling that Rackspace has invested in on top of the AWS platform,” explains Calvert.

This knowledge using their own software basically told us we would be completely bonkers if we take the risk and cost of doing it ourselves, and we should outsource this, he says.

“We finished the migration in two months,” he states. “As a startup, a difference of four months is critical.

“We were faster to market and our development teams could focus on building out our solutions and improving our customers’ experience, rather than managing the migration.”

One of the things we can do now is use cloud formation templates. “Those are done in minutes from the click of a button, rather than having to invest in somebody’s time to build those.”

This put us in control of our development platform and so, the development teams are able to do their jobs faster, he adds.

“Development test environments now allow for automatic deployment, reducing intervention from the systems team.”

He says Rackspace used its customer service programme Fanatical Support for AWS. This provided active system monitoring, shorter migration to better network architecture to keep pace with the development team, better resourcing and addressing any previously hidden costs involved on running their business through the cloud.

Calvert says the outsourcing approach works for them as a startup with a small team – 13 people in Wellington and one staff in Tauranga.

“We were pretty much faced with quite a stark choice which is you either hire skills into the organisation or do you spend your time skilling yourself up to be able to do things yourself?”

“You work out the cost of doing all that versus taking an outsourced approach to solving any problem.

In their case, “We did not have to hire resources into the organisation you need once in order to do this type of work.”

The first mover advantage

His advice to other organisations?

“Take the first – and maintain – that first mover advantage,” he says.

“As a startup, the main goal is to get your product your solution out into the marketplace as quickly as possible.”

“Make sure you are taking decisions internally based on all of the available knowledge and being hypercritical about the decisions you will be making.”

“You want to go as fast as you can but sometimes you need to slow down to make sure you are doing the right thing,” he says.

“Do not dismiss the outsourcing model because it appears to be expensive outfront,” he says, on a key lesson learned. “When, actually it can save you massive amounts of money in the medium term. It can also get you where you want to go significantly faster.”

“Collaborating with Rackspace also provided us with the security and management capabilities of a business many times larger than ourselves.

“We were able to demonstrate our security credentials to the most demanding of customers in the public sector,” he concludes.

The LINQ team (from left) Emma Dowman (designer), Alex Glasspool (office manager), Grant Reid (product manager), Jonny Hay (business development manager), Mark Shaw (CIO), Stew Darling (CEO), Neil Calvert (COO), Chris Lowe (systems administrator) and Jono Halse (lead developer).

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