CA Technologies’ executive vice president of enterprise solutions and technology Peter Griffiths talks to Technology Spectator about the factors that influence enterprise app adoption, whether companies really need for a chief digital officer, and why firms should pay more attention to their server to employee ratio.
Harrison Polites: Thank you for talking to Technology Spectator. First question, we’ve been hearing about terms like the Cloud, Big Data, mobility and software like a service (SAS) for a couple of years now. Have they sunk in? Where are businesses at with grappling these trends?
Peter Griffiths: Those trends are driving the approach businesses are taking to the market. I struggle to find any reasonable enterprise or medium size business that is not transacting with its customers its employees or its partners through some form of IT interface. Be it mobile, social, video, voice over IP telephones.
The Cloud and the enormous shift in mobility is just changing the expectations of business, industry by industry, in terms of how they deliver their service with their customers, their staff and their employees. That big change is putting IT, and IT services in general, at the centre of their business.
When you look back at the last decade we spent a lot of time in transforming back-office systems, re-engineering ERP processes and improving efficiency in organisations. Five years since the iPhone hit the market you now expect to be able to do everything through that kind of interface. A consumer interacting with a bank, a government, a store, it all comes through this kind of IT system. Many of those are supported by Cloud.
Cloud is a term that’s become enormously overused, and really, in its own right means very little. Big companies are running private clouds, enormous organisations from Amazon to small managed service providers (MSPs) are all running public clouds. The cost to compute is going down. That’s the key thing with this model.
But step back and think what the CIO is doing with this model. Their world is changing. And what we do at CA Technologies is that we really are the IT management security partner to CIO’s of the largest organisations around the world. And we are helping them transform their businesses, in a way that makes them confident to do it.
Enterprise apps: download, use, delete
So, that’s what those drivers are creating. Mobile, has that sunk in?
I don’t think anyone can be in denial of the effect of mobile. In fact, mobile is one of the most significant drivers of innovation in every business. If you actually go to the US patent office and look at IT patents submitted over the past four years, 70 per cent of them have a mobile component to them.
Mobility is the expected experience and smart companies are designing for mobility first and working their way back to other forms of interaction.
Just to finish on that point, the expectation that a consumer now has of an organisation is that these services are available and performing and if there’s no way back. That those services are trusted, yet simple. So securing services, and securing their identity as they work through services is absolutely paramount. And those services need to be engaging and innovative. Attention span across any business are low. So if I download an application firstly its doesn't work, its gone instantly - deleted. If I download an application, and its slow, it’s gone.
If I download it and its works, great, I’ll use it. But if that application doesn’t continue to involve and engage me, somebody else is going to deliver one that will.
The consumer expects continuous high quality innovation to market. So those outside factors are sitting and driving change within the world of the CIO and the world of IT management and security. In fact, IT management and security goes from being a supporting service to an absolutely crucial part of the framework of how I deliver those expectations.
Avoiding a 'check-box' approach to IT innovation
HP: How many businesses do you reckon, see IT innovation as an ongoing process rather than as something that they have to tick off once and it’s done?
PG: I don’t know a business where IT is not a frontline part of their business.
We were just in the tube station in South Korea recently. And the walls are posted with Tesco supermarket posters. There’s no food there, just a beautiful poster of all of these products. You can go up there scan the barcode, order the product when you get off the tube in the evening, the products are all bagged up and waiting for you when they get home.
The storefront has gone completely virtual, but in a very, very physical interactive way. Banking; is done through IT. Travel; done through IT. Healthcare is increasingly led by healthcare innovation. The world of healthcare is going to transform in the next decade that is going to make it almost unrecognisable.
What is holding back enterprise IT innovation?
HP: Are there any factor holding back businesses from jumping aboard these trends? Cost? Fear of change?
The transitions that businesses are going through are very tough for traditional IT thinking practices. Firstly they have to move to a mobile first mentality, which means they have to deal with management of applications and securing the data on those applications, and securing the applications not only across their workforce but also across their database.
Second, they have to become very, very focused on identity for security. If you walk into most businesses the guy who runs the security world is focused on keeping people out. It’s perimeter security. How do I secure what I’ve got and make sure that nobody can climb the walls. That thinking has to change. The perimeter doesn't have to be very strong but you have to step up and think about how do I identify whether it’s Peter or John or Tim coming on through?
How do I identify that person and make it easy for them to move between internal systems and external clouds? The whole world of thinking about security by thinking of who is travelling through the system is a big change.
Thirdly, the big change is around the expectations and speed of high quality delivery. Most IT organisations think in terms of quarters, half years, sometimes years for software delivery. You and I won’t wait that long. So IT organisations need to transform themselves to deliver on cadence with very, very high quality.
That means changing processes, bringing in new processes to development and operations, in a world that increasingly called DevOps - or combination of development and operations into an integrated group. And to do that you need to bring in new capabilities, new software. Think about testing in different ways that can scale and reduce the cost if you did it in a traditional fashion.
Who needs a Chief Digital Officer?
It’s a time of big change. And its actually a time of tremendous opportunity. Those CIOs that don’t evolve will become extinct. You see, in organisations that are not evolving, new titles being created. In fact, there a number of studies that talk about the creation of a CDO - the chief digital officer. And that CDO, where they exist, get all of the cool stuff. They get the intersection of the web, the customer, the mobile, social, interaction interfaces. And then, all the not so cool stuff, server room, managing the telecoms and the network, gets handed off to the CIO.
Of course, most of that, in many organisations is becoming an outsourced service. If you look at the way the market is evolving, servers, network, core telecom, very much can be delivered to scale by service providers, way more efficiently than a CIO can manage in their own four walls.
Many instances in government, military and financial institutions, there’s a very good reason to keep data local. But increasingly, the level of infrastructure services, is being moved to cloud based approaches. So that’s consolidating, costs are going down. The CIO, or CDO, depending on how innovative they are, gets the opportunity, to be really the one of the most powerful leaders in the company. Because all businesses are moving towards software and business services as being their way of interacting with customers.
CIOs: innovator or cost guy
HP: Just to clarify, you don’t think there’s a need for a Chief Digital Officer then? It should just all fall under the purview of the Chief Information Officer?
PG:I speak to great CIOs and I challenge them: you have a choice to make, you either become the chief innovation officer, not the old version of the CIO. You step forward and you start to talk about how you can transform this business through technology or innovation.
Or, you step back, and you become the cost guy.
I don’t think you need a CDO in an organisation. You need someone who is willing to figure out how the business will leverage technology to improve its costs.
Why you need more servers than employees
HP: Talking about costs, it could be argued that there is still a perception by some business leaders in the business world, that IT is still a cost-cutting measure. Is this the right approach? And what can be done to change it?
PG:You know, I would argue this based on a simple statistic. Look at the number of servers per employee in companies. You can even look at the number of servers per population in countries. You can quickly draw your own conclusions from that.
Now, think about a country that has a very low server count to population. A good example of that would be Chile in Latin America or India also has a very low server count to population. Now those countries are struggling with economic growth. Now think about a company. Let me ask you; give me an example of a company that has a very high server count to employee?
HP: If I had to say one of the top of my head, maybe your company, or perhaps maybe IBM? Or...
We’re getting there, but we’re nowhere near a Google or Amazon.
Google and Amazon are running in the range of 500 to 1000 servers per employee. Those are the companies that are driving growth, innovation, change, more so than anyone else.
When I walk into a customer and they tell me: ‘I’m looking to become more efficient, I’m going to reduce the number of servers and IT costs per employee’. You have to say, well, you are probably going to go out of business. You should be looking at it the other way around. You should be spending more.
The more you can spend on leveraging efficiency through servers and less on employees, the more likely you will be able to grow to scale and become a leader in the future. So clearly, IT has to be managed in an effective way. So that’s what we do at CA, we provide companies with the tools to understand where their IT spending is going, and how they can redirect it to shift it away from the ‘chore of running services’.
It all starts with consumer tech
HP: And just finally, I have to ask you this on the back of the recent launch of the iPhone 5s and 5C.
PG: I haven’t had a chance to watch that launch yet. I’m looking forward to it. I’ll get a chance later.
HP: It’s OK, I’m going broad, and so you should be able to answer this. I just wanted to know in your opinion, how much of an impact is the consumer tech market having on the enterprise tech trends and the adoption of those trends.
PG: Enormous, enormous. The consumer tech market, the smartphone, is the frontline of every business these days.
It’s the front line of taxicabs for goodness sake. It’s how I order a taxi while I’m in New York. It is changing the way we expect to interact with a business, and plainly we get frustrated when we can’t interact with a business service with a smartphone. The question is: why not?
I’m yet to find a business who is not either in the middle of a transition or very, very close to marking it. And those who are not thinking about it are going to be less relevant in the future.
HP: No worries Peter, Thank you very much for talking to Technology Spectator.