Mr. Zilch, the number of cloud offerings is rising steadily, keeping pace with digitization. How can companies decide which is the right offer for them?
Firstly, many companies have recognized that they have to go to the cloud because many new business models are simply not feasible without digitization and cloud computing. They are no longer asking: shall we enter the cloud, or not? but: how can I exploit the benefits of the cloud, and how can I eliminate the risks? But the problem is not just cloud diversity but the fact that users are simply unable to understand the implications of many cloud offers. The first step, therefore, is for companies to develop a clear cloud strategy.
What do you mean by the implications of the cloud?
There are two sides to this question: on the one hand, when specialist departments, for example, have already been using the cloud for some time, usually in software-as-a-service models. But without consultation, without paying attention to governance or the legal framework and without the necessary security – just because it’s so simple to acquire and use them. History is repeating itself here. What we are seeing is a renaissance of shadow IT. I know companies that only notice they already have several thousand Salesforce users when they ask themselves why their central CRM system is hardly used any more. Compliance? – irrelevant for employees. Governance? – of no interest to anyone who says: “I need the application here and now in order to do my job.” But that is precisely the reason why a cloud strategy is important.
And the second point?
The cloud does not come free. Or it has a catch. When employees come across suppliers “who are offering a gigabyte of storage for seven cents”, it’s probably true. But what they are not aware of is the extent to which such an offer requires changes to processes and organization. And public cloud hyperscalers don’t have a classical understanding of enterprise computing where security and responsibility are essential when dealing with the cloud. They don’t understand much about legacy applications either, and are poor at rating their significance. But these old systems are there, and they can’t be thrown away or sent to the cloud at the press of a button. That is the advantage of suppliers such as T-Systems who understand this kind of transformation and can support the process.
The ability to integrate cloud solutions into existing IT structures, the cloudification of applications – is that still a central demand made of cloud providers by CIOs?
Absolutely. System integration is the big differentiator from cloud services offered on the principle of “like it or lump it”. Of course the price plays a major part in how CIOs will buy cloud services in the future and provide them to their respective divisions. Because roughly 2/3 of companies still see the biggest attraction of cloud computing in “cost savings” and only thereafter scalability, flexibility and faster time to market. But that does not mean “the cloud at any price”.
Because users themselves have little expertise when it comes to cloud transformation, and they need someone with the experience. It’s great to flash the credit card and power the application for three hours. But first you have to bring the application, possibly legacy data and the cloud together under one roof. And if it’s a genuinely ancient application, I am sure that even T-Systems architects and system integrators have sometimes had their work cut out. You don’t become a “cloudifier” overnight.
If the future belongs to hybrid clouds – what must companies pay attention to if they will soon be wanting to switch their applications between individual clouds ever more frequently?
That’s where we come to the royal discipline – cloud orchestration. Public, private and hybrid – IaaS, PaaS or SaaS – at the end of the day, companies aren’t using one cloud but six, eight or ten different ones. But managing them all end2end, that represents a major new challenge. And it is hugely complex. Who is going to do the work? – the company itself? – a provider? – hopefully at least somebody who has the ability and can master the complexity.
What will the cloud actually change in corporate IT departments?
They will have to reorganize themselves. Server strokers and SharePoint administrators will die out. What will be needed in the future is know-how in the orchestration and management of a wide variety of cloud offerings. They will have to think along the lines of automation. Because cloud services will have to be not only affordable and secure but also easy to use. And even if I give the job to a provider, I still need staff internally who can judge what the provider is doing and who can see which cloud is addressing what need and when in this area of the business. Anyone who then asks his user: do you want Azure now and at what security level, for what price and with what availability?, has already lost. Because the user couldn’t care less about that.
You mentioned the key word security. What do we need to look out for in terms of data protection and data security?
Both terms are often used in the same breath but you have to differentiate between them. Particularly the so-called hyperscalers, ultra modern and physically secure data centers and their standards and processes. The other crucial factor when it comes to data protection – cue “safe harbor” and “Patriot Act” – is not only where the data center is but also who is operating it. A technically perfect data center of a US cloud supplier in Frankfurt still belongs to this supplier, is operated by its people and from the perspective of the American authorities is therefore subject to American law. That is the advantage, for example, if Microsoft no longer “has its own hands” on T-Systems’ Azure cloud. That is a differentiating characteristic in the quality of provision.
You mention the partnership between Microsoft and T-Systems. Is the joint trustee model a kind of master copy?
Definitely in the German market and in France likewise. Because here we are extremely sensitive when it comes to data protection. In Holland or Scandinavia, for example, it will have little effect as the influence of national law is less. But one thing is certain: it creates a win-win situation for Microsoft and T-Systems. The competitors of both companies have registered this USP with eagle eyes. Along with “secure, simple and affordable”, quality is one of the biggest demands that companies make of every different cloud service.
How do you see T-Systems’ offensive partnering strategy against this backdrop?
Courageous and correct. And both for two reasons: I know of no IT provider who is so open to partners as T-Systems and who has understood how important it is not to perform digitization and transformation alone but only with partners. Because the whole thing only works through platforms and a certain degree of standardization. Otherwise neither quality nor failsafe operation can be guaranteed, and the complexity and costs would then be unmanageable. And what can be said specifically about the partnership with Huawei for the Open Telekom Cloud is that the business case is absolutely ingenious from a financial perspective alone. Because no other service provider has contracts with a hardware partner that provide for risk & revenue sharing in this way. An absolutely innovative business model with which T-Systems can now offer Infrastructure-as-a-Service from Germany not only securely but also at an extremely affordable price.
Why do you say it is also courageous?
Because in such a comprehensive and in some respects heterogeneous ecosystem, T-Systems is responsible for all its partners with regard to the quality they deliver. It’s also hard to manage such a comprehensive product and hard to market it externally. With this strategy, T-Systems is showing outstanding confidence in its own quality as well as in the people and process chains behind it.
Top-class authors from the world of business and the IT sector explain why there’s no getting around the cloud. Above all, they all agree on one thing: digitization and cloud-based processes will be the central business engines of the 21st century.