IT departments inside Australian enterprises run a bit ‘leaner’ than they do in the United States and have been quicker to deploy public cloud services.
This is according to Stephen Orban, head of enterprise strategy at Amazon Web Services, who was talking to local customers at the AWS Summit in Sydney last week.
“It’s very eye opening for me to see the rapid demand in financial services in particular. We’ve got a number of customers who are using the AWS platform in a meaningful way,” he said.
Financial services customers that have been using AWS services since the company launched here in 2012 include AMP, Commonwealth Bank, ME Bank, and Suncorp. Australia is one of the fastest growing regions for the public cloud service provider.
“Maybe there’s some amount of necessity where there is something that is going to make them more effective and utilise their resources, which are already lean and certainly most of the companies we talk to – their core business is not IT,” said Orban.
Prior to joining AWS, Orban was CIO at Dow Jones where he led substantial transformation programs to modernise the media company’s IT department. He introduced modern software development methodologies, and put in place a ‘cloud first’ policy.
Orban said ‘cloud first’ wasn’t his intention from day one but it became clear over a three-year period that it was the way to go.
Orban arrived at Dow Jones in 2012 after the company had been through a rough period due to the global economic crisis in 2008 and the proliferation of free content on the Internet significantly altering the organisation’s business model.
“IT was hit pretty hard in terms of cost cutting and then a lot of outsourcing had been done over the course of the last decade. We wanted to get our hands around that and bring more of the accountability and talent in-house,” he said.
Dow Jones was a bit ahead of the cloud curve at the time, he said.
“It’s become very clear to me that everybody is going to have to figure out what it [cloud] means to their business in some way because the benefits are just so great,” Orban said.
“It’s impossible for me to imagine that every major company in some meaningful way won’t be using the cloud to transform the way they do business.”
Cloud for cost reduction
Reducing the overall cost of IT infrastructure is a big driver for many organisations moving to cloud models. But Gartner research VP, Glenn Archer last week said that Australian government departments are rarely realising significant savings from cloud services. He said making moves to cut costs by adopting computing is not as simple as it sounds.
Orban said that in almost all cases, AWS has been about to save its customers money. How much they save will vary based on the efficiency of the organisation and the use of best practices and tools for automation, he said.
“If you are not going to pay attention to the traffic patterns and then grow and shrink your systems when they are not in use, then the cost savings are going to be far less than if you do that,” he said.
Still, organisations moving to the cloud for other reasons, like those that are taking a ‘lift and shift’ approach where they don’t re-architect or take advantage of best practices, are going to see less cost savings.
Orban took this approach at one stage at Dow Jones when he was required to move services in a short time frame from a data centre in Hong Kong – which was closing – to AWS’ Tokyo region.
“I still saved money – 40 per cent in terms of my ongoing run rate – and I would have saved more if I had actually taken the effort to automate and do some of the things we had learned how to do better in other areas of the business,” he said.
In this particular instance, Orban and his team didn’t have enough time to take full advantage of the cloud service.
“But if you are going to [move to] the cloud and not necessarily rethink the way you are going to implement some of your systems, it is quite possible that you might not get as much of the benefit that there is to offer.”
The greatest benefit cloud provides is the ability to devote more resources back into the business.
“That’s the real key,” he said.
Moving workloads between providers
Late last year, 88 per cent of 150 CIOs and IT decision makers in Australia told Forrester Consulting that they found it challenging to move workloads between cloud providers to avoid vendor lock-in. In fact, 38 per cent said that moving workloads was so difficult, it had jeopardised the transition and disrupted business.
Orban said that moving workloads between cloud providers is a lot of work.
“If you agree one of the primary benefits of moving to the cloud in the first place is to devote more resources to their business, you start to cancel some of that benefit out if you are spending time engineering the stitching between cloud providers,” he said.
“And it’s a really hard problem. You are going to be constantly stitching the slowest common denominator in for what I would argue is a small benefit … I haven’t seen many companies do that very well,” he said.
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