How Unisys Enables ClearPath Mainframe Apps to Transition Seamlessly to Azure Cloud Without Code Changes

A discussion on how many organizations face a reckoning to move mainframe applications to a cloud model without degrading the venerable and essential systems of record. 

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Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions and you’re listening to BriefingsDirect.

Gardner

When applications are mission-critical, where they are hosted matters far less than keeping them operating smoothly -- as many of them have for decades.

Yet many organizations face a reckoning, a ticking time bomb of sorts, to move mainframe applications to a cloud model. The trick is to find a dependable, repeatable way to transition to cloud without degrading these vulnerable and essential systems of record. 

Stay with us now as we explore long-awaited means to finally solve the cloud-adoption quandary. We’re going to learn how Unisys and Microsoft can transition ClearPath Forward assets to Microsoft Azure cloud without risky code changes.

To learn more about the latest onramps to secure and agile cloud model adoption, please join me now in welcoming Chuck Lefebvre, Senior Director of Product Management for ClearPath Forward at Unisys. Welcome, Chuck.

Chuck Lefebvre: Thank you, Dana. I’m happy to be here.

Gardner: We’re glad to have you. We’re also here with Bob Ellsworth, Worldwide Director of Mainframe Transformation at Microsoft. Welcome, Bob.

Bob Ellsworth: Thank you, Dana. Nice to be here as well.

Gardner: Bob, what’s driving the demand nowadays for more organizations to run more of their legacy apps in the public cloud?

Ellsworth: We see that more and more customers are embracing digital transformation, and they are finding the cloud an integral part of their digital transformation journey. And when we think of digital transformation, at first it might begin with optimizing operations, which is a way of reducing costs by taking on-premises workloads and moving them to the cloud.

But the journey just starts there. Customers now want to further empower employees to access the applications they need to be more efficient and effective, to engage with their customers in different ways, and to find ways of using cloud technologies to transform products, such as machine learning (ML), artificial intelligence (AI), and business intelligence (BI).

Gardner: And it’s not enough to just have some services or data in the cloud. It seems there’s a whole greater than the sum of the parts for organizations seeking digital transformation -- to get more of their IT assets into a cloud or digitally agile environment.

Destination of choice: Cloud

Ellsworth

Ellsworth: Yes, that’s absolutely correct. The beauty is that you don’t have to throw away what you have. You can take legacy workloads such as ClearPath workloads and move those into the cloud, but then continue the journey by embracing new digital capabilities such the advanced services such as ML, AI, or BI so you can extend the usefulness and benefits of those legacy applications.

 

Gardner: And, of course, this has been a cloud adoption journey for well over 10 years. Do you sense that something is different now? Are there more means available to get more assets into a cloud environment? Is this a tipping point?

Ellsworth: It is a tipping point. We’ve seen -- especially around the mainframe, which is what I focus on -- a huge increase in customer interest and selection of the cloud in the last 1.5 years as the preferred destination. And one of the reasons is that Azure has absolutely demonstrated its capability to run these mission- and business-critical workloads.

Gardner: Are these cloud transitions emerging differently across the globe? Is there a regional bias of some sort? Is the public sector lagging or leading? How about vertical industries? Where is this cropping up first and foremost?

Ellsworth: We’re seeing it occur in all industries; in particular, financial services. We find there are more mainframes in financial services, banking capital markets, and insurance than in any other industries.

So we see a propensity there where, again, the cloud has become a destination of choice because of its capability to run mission- and business-critical workloads. But in addition, we’re seeing this in state and local governments, and in the US Federal Government. The challenge in the government sector is the long cycle it takes to get funding for these projects. So, it’s not a lack of desire, it’s more the time it takes to move through the funding process.

Gardner: Chuck, I’m still surprised all these years into the cloud journey that there’s still such a significant portion of data and applications that are not in the cloud environment. What’s holding things back? What’s preventing enterprises from taking advantage of cloud benefits?

Lefebvre: A lot of it is inertia. And in some cases, incorrect assumptions about what would be involved in moving. That’s what’s so attractive about our Unisys ClearPath solution. We can help clients move their ClearPath workloads without change. We take that ClearPath software stack from MCP initially and move it and re-platform it on Microsoft Azure.

Learn How to Transition

ClearPath Workloads
To the Cloud

And that application and data comes across with no re-compilation, no refactoring of the data; it’s a straightforward transition. So, I think now that we have that in place, that transition is going to go a lot smoother and really enable that move to occur.

 

I also second what Bob said earlier. We see a lot of interest from our financial partners. We have a large number of banking application partners running on our ClearPath MCP environment, and those partners are ready to go and help their clients as an option to move their workloads into the Azure public cloud.

Pandemic puts focus on agility

Gardner: Has the disruption from the coronavirus and the COVID-19 disease been influencing this transition? Is it speeding it up? Slowing it down? Maybe some other form of impact?

Lefebvre

Lefebvre: I haven’t seen it affecting any, either acceleration or deceleration. In our client-base most of the people were primarily interested initially in ensuring their people could work from home with the environments they have in place.

I think now that that’s settled in, they’ve sorted out their virtual private networks (VPNs) and their always-on access, processes, that perhaps now we’ll see some initiatives evolving. I think, initially, it was just businesses supporting their employees working from home. 

My perspective is that that should be enabled equally as well, whether they are running their backend systems of record in a public cloud or on-premises. Either way would work for them.

Gardner: Bob, at Microsoft, are you seeing any impact from the pandemic in terms of how people are adopting cloud services?

Ellsworth: We’re actually seeing an increase in customer interest and adoption of cloud services because of COVID-19. We’re seeing that in particular in some of our solutions such as Teams for doing collaboration and webinars, and connecting with others remotely. We’re seeing a big increase there.

And Office 365, we’ve seen a huge increase in deployments of customers using the Office 365 technology. In addition, Azure; we’ve also seen a big increase in Azure consumption as customers are dealing with the application growth and requirements of running these applications.

As far as new customers that are considering moving to the cloud, I had thought originally, back in March when this was starting to hit, that our conversations would slow down as people dealt with more immediate needs. But, in fact, it was about a two-to-three-week slow down. But now, we’re seeing a dramatic increase in interest in having conversations about what are the right solutions and methods to move the workloads to the cloud.

So, the adoption is accelerating as customers look for ways to reduce cost, increase agility, and find new ways of running the workloads that they have today.

Gardner: Chuck, another area of impact in the market is around skills. There is often either a lack of programmers for some of these older languages or the skills needed to run your own data centers. Is there a skill factor that’s moving the transition to cloud?

As we see our clients showing interest in moving to the pubic cloud, they are now looking to do that for mainframe applications. Once they do that, no longer do they have to worry about the care and feeding of that mainframe infrastructure.

Lefebvre: Oh, there certainly is. One of the attractive elements of a public cloud is the infrastructure layer of the IT environment is managed by that cloud provider. So as we see our clients showing interest in moving to the public cloud -- first with things like, as Bob said, Office 365 and maybe file shares with SharePoint – they are now looking at doing that for mainframe applications. And when they do that, they no longer have to be worried about that talent to do the care and feeding of that infrastructure. As we move those clients in that direction, we’re going to take care of that ClearPath infrastructure, the day-to-day management of that environment, and that will be included as part of our offering.

We expect most clients – rather than managing it themselves in the cloud – will defer to us, and that will free up their staff to do other things. They will have retirements, but less risk.

Gardner: Bob, another issue that’s been top-of-mind for people is security. One of the things we found is that security can be a tough problem when you are transitioning, when you change a development environment, go from development to production, or move from on-premises to cloud. 

How are we helping people remain secure during a cloud transition, and also perhaps benefit from a better security posture once they make the transition?

Time to transition safely, securely

Ellsworth: We always recommend making security part of the planning process. When you’re thinking of transforming from a datacenter solution to the cloud, part of that planning is for the security elements. We always look to collaborate with our partners, such as Unisys, to help define that security infrastructure and deployment.

What’s great about the Azure solutions is we’ve focused on hybrid as the way of deploying customers’ workloads. Most customers aren’t ready to move everything to the cloud all at the same time. For that reason, and with the fact that we focus on hybrid, we allow a customer to deploy portions of the workload to the cloud and the other portions in their data center. Then, over time, they can transition to the cloud.

But during that process supporting your high levels of security for user access, identity management, or even controls of access to the right applications and data -- that’s all done through the planning and using technologies such as Microsoft Active Directory and synchronization with Azure Active Directory. So with that planning it’s so important to ensure successful deployments and ensure the high levels of security that customers require.

Gardner: Chuck, anything to offer on the security?

Lefebvre: Yes, we’ll be complementing everything Bob just described with our Unisys Stealth technology. It allows always-on access and isolation capabilities for deployment of any of our applications from Unisys, but in particular the ClearPath environment. And that can be completely deployed in Azure or, as Bob said, in a hybrid environment across an enterprise. So we are excited about that deployment of Stealth to complement the rigor that Microsoft applies to the security planning process.

Gardner: We’ve described what’s driving organizations to the cloud, the fact that it’s accelerating, that there’s a tipping point in what adoption can be accomplished safely and reliably. We’ve also talked about what’s held people back and their challenges.

Let’s now look at what’s different about the latest solutions for the cloud transition journey. For Unisys, Chuck, how are your customers reconciling the mainframe past with the cloud future?

No change in digital footprint

Lefebvre: We are able to transition ClearPath applications with no change. It’s been roughly 10 years since we’ve been deploying these systems on Intel platforms, and in the case of MCP hosting it on a Microsoft Windows Server kernel. That’s been in place under our Unisys Libra brand for more than 10 years now.

In the last couple of years, we’ve also been allowing clients to deploy that software stack on virtualized servers of their choice: on Microsoft Hyper-V and the VMware virtualization platforms. So it’s a natural transition for us to move that and offer that in Azure cloud. We can do that because of the layered approach in our technology. It’s allowed us to present an approach to our clients that is very risk-free, very straightforward.

Learn How to Transition

ClearPath Workloads
To the Cloud

The ClearPath software stack sits on a Windows kernel, which is also at the foundation level offered by the Azure hybrid infrastructure. The applications therefore don’t change a bit, literally. The digital footprint is the same. It’s just running in a different place, initially as platform-as-a-service (PaaS).

The cloud adoption transition is really a very low-risk, safe, and efficient journey to the public cloud for those existing solutions that our clients have on ClearPath.

Gardner: And you described this as an ongoing logical, cascading transition -- standing on the shoulders of your accomplishments -- and then continuing forward. How was that different from earlier migrations, or a lift-and-shift, approach? Why is today’s transition significantly different from past migrations?

Lefebvre: Well, a migration often involves third-parties doing a recompilation, a refactoring of the application, so taking the COBOL code, recompiling it, refactoring it into Java, and then breaking it up, and moving the data out of our data formats and into a different data structure. All of those steps have risk and disruption associated with them. I’m sure there are third-parties that have proven that. That can work. It just takes a long time and introduces risk.

For Unisys ClearPath clients who have invested years and years in those systems of record, that entire stack can now run in a public cloud using our approach -- as I said before -- with absolutely not a single bit of change to the application or the data.

Gardner: Bob, does that jibe with what you are seeing? Is the transition approach as Bob described it an advantage over a migration process as he described?

Ellsworth: Yes, Chuck described it very well. We see the very same thing. What I have found, -- and I’ve been working with Unisys clients since I joined Microsoft in 2001, early on going to the Unisys UNITE conference -- was that Unisys clients are very committed and dedicated to their platform. They like the solutions they are using. They are used to using those developer tools. They have built up the business-critical, mission-critical applications and workloads.

For those customers that continue to be committed to the platform, absolutely, this kind of what I call “re-platforming” could easily be called a “transition.” You are taking what you currently have and simply moving it onto the cloud. It is absolutely the lowest risk, the least cost, and the quickest time-to-deployment approach.

The vast majority of committed Unisys customers want to stay on the platform, and this provides the fastest way to get to the cloud -- with less risk and quickest benefits.

For those customers, just like with every platform, when you have an interest to transform to a different platform, there are other methods available. But I would say the vast majority of committed Unisys customers want to stay on the platform, and this provides the fastest way to get to the cloud -- with the less risk and the quickest benefits.

Gardner: Chuck, the process around cloud adoption has been going on for a while. For those of us advocating for cloud 10 or 12 years ago, we were hoping that it would get to the point where it would be a smooth transition. Tell me about the history and the benefits of how ClearPath Forward and Azure had come together specifically? How long have Microsoft and Unisys been at this? Why is now, as we mentioned earlier, a tipping point?

Lefebvre: We’ve been working on this for a little over a year. We did some initial work with two of our financial application partners and North America banking partners and the initial testing was very positive. Then as we were finishing our engineering work to do the validation, our internal Unisys IT organization, which operates about 25 production applications to run the business, went ahead in parallel with us and deployed half of those on MCP in Azure, using the very process that I described earlier.

Today, they are running 25 production applications. About half of them have been there for nine months and the other half for the last two months. They are supporting things like invoicing our customers, tracking our supply chain status, and so, a number of critical applications. 

We have taken that journey not just from an engineering point of view, but we’ve proven it to ourselves. We drank our own champagne, so to speak, and that’s given us a lot of confidence. It’s the right way to go, and we expect our clients will see those benefits as well.

Gardner: We haven’t talked about the economics too much. Are you finding, now that you’ve been doing this for a while, that there is a compelling economic story? A lot of people are fearful that a transition or migration would be very costly, that they won’t necessarily save anything by doing this, and so maybe are resistant. But what’s the dollars’ and cents’ impact that you have been seeing now that you’ve been doing this while transitioning ClearPath to Azure?

Rapid returns

Lefebvre: Yes, there are tangible financial benefits that our IT organization has measured. In these small isolated applications, they calculated about a half-a-million dollars in savings across three years in their return on investment (ROI) analysis. And that return was nearly immediate because the transition for them was mostly about planning the outage period to ensure a non-stop operation and make sure we always supported the business. There wasn’t actually a lot of labor, just more planning time. So that return was almost immediate.

Gardner: Bob, anything to offer on the economics of making a smooth transition to cloud?

Ellsworth: Yes, absolutely. I have found a couple of catalysts for customers as far as cost savings. If a customer is faced with a potential hardware upgrade -- perhaps the server they are running on is near end-of-life -- by moving the workload to the cloud and only paying for the consumption of what you use, it allows you to avoid the hardware upgrade costs. So you get some nice and rapid benefits in cost avoidance.

In addition, for workloads such as test and development environments, or user acceptance testing environments, in addition to production uses, the beauty of the cloud pricing is you only pay for what you are consuming.

So for those test and development systems, you don’t need to have hardware sitting in the corner waiting to be used during peak periods. You can spin up an environment in the cloud, do all of your testing, and then spin it back down. You get some very nice cost savings by not having dedicated hardware for those test and development environments.

Gardner: Let’s dig into the technology. What’s under the hood that’s allowing this seamless cloud transition, Chuck?

Secret sauce

Lefebvre: Underneath the hood is the architecture that we have transformed to over the last 10 years where we are already running our ClearPath systems on Intel-based hardware on a Microsoft Windows Server kernel. That allows that environment to be used and re-platformed in the same manner.

To accomplish that, originally, we had some very clever technology that allows the Unisys compilers generating unique instructions to be emulated on an Intel-based, Windows-based server.

That’s really the fundamental underpinning that first allowed those clients to run on Intel servers instead of on proprietary Unisys-designed chips. Once that’s been completed, we’re able to be much more flexible on where it’s deployed. The rigor to which Microsoft has ensured that Windows is Windows -- no matter if it’s running on a server you buy, whether it’s virtualized on Hyper-V, or virtualized in Azure -- really allows us to achieve that seamless operation of running in any of those three different models and environments.

Gardner: Where do you see the secret sauce, Bob? Is the capability to have Windows be pure, if you will, across the hybrid spectrum of deployment models?

Learn How to Transition

ClearPath Workloads
To the Cloud

Ellsworth: Absolutely, the secret sauce as Chuck described was that transformation from proprietary instruction sets to standard Intel instruction sets for their systems, and then the beauty of running today on-premises on Hyper-V or VMware as a virtual machine (VM). 

And then the great thing is with the technologies available, it’s very, very easy to take VMs running in the data center and migrate them to infrastructure as a service (IaaS) VMs running in the cloud. So, seamless transformation and making that migration.

You’re taking everything that’s running in your production system, or test and development systems, and simply deploying them up in the cloud’s VM instead of on-premises. So, a great process. Definitely, the earlier investment that was made allows that capability to be able to utilize the cloud.

Gardner: Do you have early adopters who have gone through this? How do they benefit?

Private- and public-sector success stories

Lefebvre: As I indicated earlier, our own Unisys IT operation has many production applications running our business on MCP. Those have all been moved from our own data center on an MCP Libra system to now running in the Microsoft Azure cloud. Our Unisys IT organization has been a long-time partner and user of Microsoft Office 365 and SharePoint in the cloud. Everything has now moved. This, in fact, was one of the last remaining Unisys IT operations that was not in the public cloud. That was part of our driver, and they are achieving the benefits that we had hoped for.

We also have two external clients, a banking partner is about to deploy a disaster recovery (DR) instance of their on-premises MCP banking application. That’s coming from our partner, Fiserv. Fiserv’s premier banking application is now available for running in Azure on our MCP systems. One of the clients is choosing to host a DR instance in Azure to support their on-premises production workload. They like that because, as Bob said, they only have to pay for it when they fire it up if they need to use that DR environment.

We have another large state government project that we’re just about to sign, where that client will be doing some of their ClearPath MCP workload and transition to and manage that in an Azure public cloud.

Once that contract is signed and we get agreement from that organization, we will be using that as one of our early use case studies.

Gardner: The public sector, with all of their mainframe apps, seems like a no-brainer to me for these transitions to the cloud. Any examples from the public sector that illustrate that opportunity?

Ellsworth: We have a number of customers, specifically on the Unisys MCP platform, that are evaluating moving their workloads from their data centers into the cloud. We don’t have a production system as far as I know yet, but they’re in the late stages of making that decision.

There are so many ways of utilizing the cloud, for things like DR, at a very low cost, instead of having to have a separate data center or failover system. Customers can even leave their production on-premises in the short-term and stand up their test and development in the cloud and run MCP system in that way.

And then, once they’re in the cloud, they gain the capability to set up a high-availability DR system or high-availability production system, either within the same Azure data center, or failover from one system to another if they have an outage, and all at a very low cost. So, there are great benefits.

One other benefit is elasticity. When I talk about customers, they say, “Well, gee, I have this end-of-month process and I need a larger mainframe then because of those occasional higher capacity requirements. Well, the beauty of the cloud is the capability to grow and shrink those VMs when you need more capacity for such end-of-month process, for example.

Again, you don’t have to pre-purchase the hardware. You really only pay for the consumption of the capacity when you need it. So, there are great advantages and that’s what we talk to customers about. They can get benefits from considering deploying new systems in the cloud. Those are some great examples of why we’re in late-stage conversations with several customers about deploying the solution.

Increased data analytics

Gardner: I supposed it’s a little bit early to address this, but are there higher-order benefits when these customers do make the cloud transition? You mentioned earlier AI, ML, and getting more of your data into an executable environment where you can take advantage of analytics across more and larger data sets.

Is there another shoe to drop when it comes to the ROI? Will they be able to do things with their data that just couldn’t have been done before, once you make a transition to cloud?

Ellsworth: Yes, that’s absolutely correct. When you move the systems up to the cloud, you’re now closer to all the new workloads and the advanced cloud services you can utilize to, for example, analyze all that data. It’s really about turning more data into intelligent action. 

In the past, when you built custom applications, you had to pretty much code everything yourself. Today, you consume services. There's no reason to build an application fro scratch. You consume services form the cloud.

Now, if you think of back to the 1980s and 1990s, or even 2000s, when you were building custom applications, you had to pretty much code everything yourselves. Today, the way you build an application is to consume services. There’s no reason for a customer to build a ML application from scratch. Instead, you consume ML services from the cloud. So, once you’re in the cloud, it opens up a world of possibilities to being able to continue that digital business transformation journey.

Lefebvre: And I can confirm that that’s a key element for our product proposition as well as from a ClearPath point of view. We have some existing technology, a particular component called Data Exchange, that does an outstanding change and data capture model. We can pump the data coming into that backend system of record and using, Kafka, for example, feed that data directly into an AI or ML application that’s already in place.

One of the key areas for future investment -- now that we have done the re-platforming to PaaS and IaaS – is extending our ePortal technology and other enabling software to ensure that these ClearPath applications really fit in well and leverage that cloud architecture. That’s the direction we see a lot of benefit in as we bring these applications into the public Azure cloud.

The cloud journey begins

Gardner: Chuck, if you are a ClearPath Forward client, you have these apps and data, what steps should you be taking now in order to put yourself in an advantageous position to make the cloud transition? Are there pre-steps before the journey? Or how should you be thinking in order to take advantage of these newer technologies?

Lefebvre: First of all, they should engage with their Unisys and Microsoft contacts that work with your organization to begin consultation on that journey. Data backup, data replication, DR, those elements around data and your policy with respect to data are the things that are likely going to change the most as you move to a different platform -- whether that’s from a Libra system to an on-premises virtualized infrastructure or to Azure.

What you’ve done for replication with a certain disk subsystem probably won’t be there any longer. It’ll be done in a different way, and likely it’ll be done in a better way. The way you do your backups will be done differently.

Now, we have partnered with Dynamic Solutions International (DSI) and they offer a virtualized virtual tape solution so that you can still use your backup scripts on MCP to do backups in exactly the same way in Azure. But you may choose to alter the way you do backups.

So, your strategy for data and how you handle that, which is so very important to these enterprise class mainframe applications, that’s probably the place where you’ll need to do the most thinking and planning, around data handling.

Gardner: For those familiar with BriefingsDirect, we like to end our discussions with a forward-looking vision, an idea of what’s coming next. So when it comes to migrating, transitioning, getting more into the cloud environments -- be that hybrid or pure public cloud -- what’s going to come next in terms of helping people make the transition but also giving them the best payoff when they get there?

The cloud journey continues

Ellsworth: It’s a great question, because you should think of the world of opportunity, of possibility. I look back at my 47 years in the industry and it’s been incredible to see the transformations that have occurred, the technology advancements that have occurred, and they are coming fast and furious. There’s nothing slowing it down.

And so, when we see the cloud today, a lot of customers are still considering the cloud for strategy and for building any new solutions. You go into the cloud first and have to justify staying on-premises, and then customers move to a cloud-only strategy where they’re able to not only deploy new solutions but migrate their existing workloads such as ClearPath up to the cloud. They get to a point where they would be able to shut down most of what they run in their data centers and get out of that business of operating IT infrastructure and having operation support provided for them as-a-service.

Learn How to Transition

ClearPath Workloads
To the Cloud

Next, they move into transforming through cultural change in their own staff. Today the people that are managing, maintaining, and running new systems will have an opportunity to learn new skills and new ways of doing things, such as cloud technology. What I see over the next two to three years is a continuation of that journey, the transformation not just of the solutions the customers use, but also the culture of the people that operate and run those solutions.

Gardner: Chuck, for your installed base across the world, why should they be optimistic about the next two or three years? What’s your vision for how their situation is only going to improve?

Lefebvre: Everything that we’ve talked about today is focused on our ClearPath MCP market and the technology that those clients use. As we go forward into 2021, we’ll be providing similar capabilities for our ClearPath OS 2200 client base, and we’ll be growing the offering.

Today, we’re starting with the low-end of the customer base: development, test, DR, and the smaller images. But as the Microsoft Azure cloud matures, as it scales up to handle our scaling needs for our larger clients, we’ll see that maturing. We’ll be offering the full range of our products in the Azure cloud, right on up to our largest systems.

That builds confidence across the board in our client base; in Microsoft and in Unisys. We want to crawl, then walk, and then run. That journey, we believe, is the safest way to go. And as I mentioned earlier, this initial workload transformation is occurring through a re-platforming approach. The real exciting work is bringing cloud-native capabilities to do better integration of those systems of record, with better systems of engagement, that the cloud-native technology is offering. And we have some really interesting pieces under development now that will make that additional transformation straightforward. Our clients will be able to leverage that – and continue to extend that backend investment in those systems. So we’re really excited about the future.

Gardner: I’m afraid we’ll have to leave it there. You’ve been listening to a sponsored BriefingsDirect discussion on the latest on-ramps to secured agile cloud adoption for mainframe applications. And we’ve learned how a partnership between Unisys and Microsoft Azure allows many organizations to move their applications and data to a cloud model without degrading these vulnerable and essential systems of record.

So please join me in thanking our guests, Chuck Lefebvre, Senior Director of Product Management for ClearPath Forward at Unisys. Thank you so much, Chuck.

Lefebvre: Thank you.

Gardner: And a big thank you as well to Bob Ellsworth, Worldwide Director of Mainframe Transformation at Microsoft. Thank you, sir.

Ellsworth: Thank you.

Gardner: And a big thank you to our audience for joining this BriefingsDirect cloud computing adoption best practices discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of Unisys- and Microsoft-sponsored BriefingsDirect discussions.

Thanks again for listening. Please pass this along to your IT community, and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Unisys and Microsoft.

A discussion on how many organizations face a reckoning to move mainframe applications to a cloud model without degrading the venerable and essential systems of record. Copyright Interarbor Solutions, LLC, 2005-2020. All rights reserved.

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How Digital Transformation Navigates Disruption to Chart a Better Course to the New Normal

A discussion on how HPE Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging market opportunities.

Listen to the podcast. Find it on iTunes. Download the transcript. See the video. Sponsor: Hewlett Packard Enterprise.

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of Innovation podcast series.

Gardner

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this timely discussion on architecting businesses for managing ongoing disruption.

As enterprises move past crisis mode in response to the COVID-19 pandemic, they require a systemic capability to better manage shifting market trends.

Stay with us now as we examine how Hewlett Packard Enterprise (HPE) Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging opportunities.

Here to share the Pointnext view on transforming businesses to effectively innovate in the new era of pervasive digital business, is Craig Partridge, Senior Director Worldwide, Digital Advisory and Transformation Practice Lead, at HPE Pointnext Services. Welcome back, Craig.

Craig Partridge: Hey, Dana. Good to speak with you again.

Gardner: Craig, how has the response to the pandemic accelerated the need for comprehensive digital transformation?

Disruption demands digital solutions 

Partridge: We speak to a lot of customers around the world. And the one thing that we are picking up very commonly is a little bit counter-intuitive.

At the beginning of the pandemic -- in fact, at the beginning of any major disruption -- there is a sense that companies will put the brakes on and slow everything down. And that happened as we went through this initial period. Preserving cash and liquidity kicked in and a minimum viable operating model emerged. People were reluctant to invest.

Partridge

But as they now begin to see the shifting landscape in industries, we are beginning to see a recognition that those pivoting out of these disruptive moments the quickest -- with sustained, long-term viability built behind how they accelerate -- those organizations are the ones driving new experiences and new insights. They are pushing hard on the digital agenda. In other words, digitally active companies seem to be the ones pivoting quicker out of these disruptions -- and coming out stronger as well.

So although there was an initial pause as people pivoted to the new normal, we are seeing now acceleration of initiatives or projects, underpinned by technology, that are fundamentally about reshaping the customer experience. If you can do that through digital engagement models, you can continue to drive revenue and customer loyalty because you are executing those valued transactions through digital platforms.

Gardner: Has the pandemic and response made digital transformation more attractive? If you have to do more business digitally, if your consumers and your supply chain have become more digital, is this a larger opportunity?

Partridge: Yes, it’s not only more attractive – it’s more essential. That’s what we are learning.

A good example here in the UK, where I am based, is that big retailers have traditionally been deeply into the brick world experience of walking into a retail store or supermarket, those kinds of big, physical spaces. They figured out during this period of disruption that the only way to continue to drive revenue and take orders was on digital platforms. Well, guess what? Those digital platforms were only scaled and sized for a certain kind of demand, and that demand was based on a pre-pandemic normal.

This transformation is not just an attractive thing to do. For many organizations pivoting hard to digital engagement and digital revenue streams is their new normal. That's what they have to focus on -- not just to survive but for beyond that.

Now, they have to double or treble the capacity of their transactions across those digital platforms. They are having to increase massively their capability to not only buy online, but to get deliveries out to those customers as well.

So this transformation is not just an attractive thing to do. For many organizations pivoting hard to digital engagement and digital revenue streams is their new normal. That’s what they have to focus on -- and not just to survive but for beyond that. It’s the direction to their new normal as well.

Gardner: It certainly seems that the behavior patterns of consumers, as well as employees, have changed for the longer term when it comes to things like working at home, using virtual collaboration, bypassing movie theaters for online releases, virtual museums, and so forth.

For those organizations that now have to cater to those online issues and factor in the support of their employees online, it seems to me that this shift in user behavior has accelerated what was already under way. Do companies therefore need to pick up the pace of what they are doing for their own internal digital transformation, recognizing that the behaviors in the market have shifted so dramatically?

Safety first 

Partridge: Yes, in the past digital transformation focused on the customer experience, the digital engagement channel, and building out that experience. You can relate that in large parts to the shift toward e-commerce. But increasingly people are aware of the need to integrate information about the physical space as well. And if this pandemic taught us anything, it’s that they need to not only create great experiences – they must create safe, great experiences.

What does that mean? I need to understand about my physical space so I can augment my service offerings in a way that’s safe. We are looking at scenarios where using video recognition and artificial intelligence (AI) will begin to work out whether that space being used safely. Are there measurements we can put in place to protect people better? Are people keeping certain social distancing rules?

All of that is triggering the next wave of customer experience, which isn’t just the online digital platform and digital interactions, but -- as we get back out into the world and as we start to occupy those spaces again -- how do I use the insight about the physical space to augment that experience and make sure that we can emerge safer, better, and enjoy those digital experiences in a way that’s also physically safe.

Beyond just the digital transactions side, now it’s much more about starting to address the movement that was already long on the way -- the digitization of the physical world and how that plays into making these experiences more beneficial.

Gardner: So if the move to digitally transform your organization is an imperative, if those who did it earlier have an advantage, if those who haven’t done it want to do it more rapidly -- what holds organizations back? What is it about legacy IT architectures that are perhaps a handicap?

Pivoting from the cloud 

Partridge: It’s a great question because when I talk to customers about moving into the digital era, that triggers the question, “Well, what was there before this digital era?” And we might argue it was the cloud era that preceded it.

Now, don’t get me wrong. These aren’t sequential. I’m not saying that the cloud era is over and the digital era has replaced it. As you know, these are waves. And they rise on top of each other. But organizations that are able to go fast and accelerate on the digital agenda are often the same organizations.

The biggest constraint we see as organizations try to stress-test their digital age adoption is to see if they actually have agility in the back end. Are the systems set up to be able to scale on-demand as they start to pivot toward digital channels to engage their customers? Does a recalibration of the supply chain mean applications and data are placed in the right part of on- or off-premises cloud architecture supply chains?

The biggest constraint we see as organizations try to stress-test their digital age adoption is to see if they actually have agility in the back end. Are the systems set up to be able to scale on-demand as they pivot to digital channels to engage with their customers?

If you haven’t gone through a modernization agenda, if you haven’t tackled that core innovation issue, if you haven’t embraced cloud architectures, cloud-scale, and software-defined – and, increasingly, by the way, the shift to things like containerization, microservices, and decomposing big monolithic applications into manageable chunks that are application programming interface

(API)-connected -- if you haven’t gone through that cloud-enabled exploration prior to the digital era, well, it looks like you still have some work to do before you can get the gains that some of those other modern organizations are now able to express.

There’s another constraint, which is really key. For most of the customers we speak to, it tends to be in and around the operating model. In a lot of conversations that I have with customers, they over-invested in technology. They are on every cloud platform available. They are using every kind of digital technology to gain a level of competitive advantage.

Yet, at the heart of any organization are the people. It’s the culture of the people and the innovation of your people that really makes the difference. So, not least of all, the supply chain agility, right in the heart of this conversation. It is the fundamental operating model -- not just of IT, but the operating model of the entire organization.

So have they unticked their value chain? Have they looked at the key activities? Have they thought when they implement new technology, and how that might replace or augment activities? And what does that mean to the staff? Can you bring them with you, and have you empowered them? Have you re-skilled them along the way? Have you driven those cultural change programs to force that digital-first mindset, which is really the key to success in all of this?

Gardner: So many interdependencies, so much complexity, frankly, when we’re thinking about transacting across the external edge to cloud, to consumer, and to data center. And we’re talking about business processes that need to extend into new supply chains or new markets.

Given that complexity, tell us how to progress beyond understanding how difficult this all can be and to adopt proven ways that actually work.

Universal model has the edge 

Partridge: For everything that we’ve talked about, we have figured out that there is a universal model that organizations can use to methodologically go off into this space.

We found out that organizations are very quickly pivoting to exploring their digital edge. I think the digital agenda is an edge-in conversation. Again, I think that marks it out from the preceding cloud era, which was much more about core-out. That was get scale, efficiency, and cost optimization out of service delivery models in-place. But that was a very core-out conversation. When you think digital, you have to begin to think about the use case of where value is created or exchanged. And, that’s an edge-in conversation.

And we managed to find that there are two journeys behind that discussion. The first one is about deciding to whom you are looking to deliver that digital experience. So when you think about digital engagement, really caring passionately about who the beneficiary persona is behind that experience. You need to describe that person in terms of what’s their day-in-the-life. What pains do they face today? What gains could you develop that could deliver better outcomes for them? How can you walk in their shoes, and how do you describe that?

We found that is a key journey, typically led by kind of chief digital officer-type character who is responsible for driving new digital engagement with customers. If the persona is external to the customer, if it’s a revenue-generating persona, we might think of revenue as the essential key performance indicator (KPI). But you can apply similar techniques to drive internal personas’ productivity. So productivity becomes the KPI.

That journey is inspired by initiatives that are trying to use digital to connect to people in new, innovative, and differentiated ways. And you’ll find different stakeholders behind that journey.

And we found another journey, which is reshaping the edge. And that’s much more about using technology to digitize the physical world. So let’s hear about the experience, about business efficiency and effectiveness at the edge -- and using the insights of instrumenting and digitizing the physical world to give you a sense of how that space is being used. How is my manufacturing floor performing? The KPI is overall equipment effectiveness (OEE) in the manufacturing space and it becomes key. Behind this journey you’ll see big Industry 4.0-type and Internet of Things (IoT)-type of initiatives under way.

If organizations are able to stitch these two journeys together -- rather than treat them as siloed sandpits for innovation – and if they can connect them together, they tend to get compound benefits.

You asked about where the constraint comes in. As we said, it is about getting agility into the supply chain. And again, we’ve actually found that there are two connected journeys, but with very different stakeholders behind them, which drive that agenda.

We have a journey, too, that describes a core renovation agenda that will occupy 70 to 80 percent of every IT budget every year. It’s the constant need to challenge the price performance of legacy environments and constantly optimize and move the workloads and data into the right part of the supply chain for strategic advantage.

That is coupled with yet another journey, that of the cloud-enabled constraint and that’s very much developer-led more than it is led by IT. IT is typically holding the legacy footprint, the technical debt footprint, but the developer is out there looking to exploit cloud-native architectures to write the next wave of applications and experiences. And they are just as impactful when it comes to equipping the organization with the cloud scale that’s necessary to mine those opportunities on the edge.

So, there is a balance in this equation, to your point. There is innovation at the edge, very much line of business-driven, very much about business efficiency and effectiveness, or revenue and productivity, the real tangible dollar value outcomes. And on the other side, it’s more about agility and the supply chain. It’s getting that balance right so that I have my agility and that allows me to go and explore the world digitally at the edge.

So they sort of overlap. And the implication there is that there are three core enablers and they are true no matter which of the big four agenda items customers are trying to drive through their initiative programs.

In digital, data is everything 

Two of those enablers very much relate to data. Again, Dana, I know in the digital era data is everything. It is the glue that holds this new digital engagement model together. In there we found two key enablers that constantly come up, no matter which agenda you are driving.

The first one is surely you need intelligence from that data; data for its own sake is of no use, it’s about getting intelligence from that dataset. And that’s not just to make better decisions, but actually to innovate, to create differentiated value propositions in your market. That’s really the key agenda behind that intelligence enabler.

And the second thing, because we are dealing with data, is a huge impact and emphasis on being trusted with that data. And that doesn’t just mean being compliant to regulatory standards or having the right kind of resiliency and cybersecurity approach, it means going beyond that.

You need to gain intelligence from the data; data for its own sake is of no use, it's about getting intelligence for the datasets. And that's not just to make better decisions, it's to innovate and create differentiated value propositions in your market.

In this digitally enabled world, we want to trust brands with our data because often that data is now extremely personal. So beyond just General Data Protection Regulation

(GDPR) compliance, trust here means, “Am I being ethical? Am I being transparent about how I use that data?” We all saw the Cambridge Analytica-type of impact and what happens when you are not transparent and you are not ethical about how you use data.

Now, one thing we haven’t touched on and I will just throw it up as a bit of context, Dana. There is a consideration, a kind of global consideration behind all of this agenda and that’s the shift toward everything-as-a-service (EaaS).

A couple of key attributes of that consideration includes the most obvious one; it’s the financial flexibility one. For sure, as you reassemble your supply chain -- as you continue to press on that cloud-enabled side of the map -- what you are paying, what you consume, and doing that in a strategic way helps get the right mix in that supply chain, and paying only for that as you consume, is kind of obvious.

But I think the more important thing to understand is that our customers are being equally innovative at the edge. So they are using that everything-as-a-service momentum to change their industry, their market, and the relationship they have with their customers. It helps especially as they pivot into a digital customer experience. Can that experience be constructed around a different business model?

We found that that’s a really useful way of deconstructing and simplifying what is actually quite a complex landscape. And if you can abstract -- if you can use a model to abstract away the chaos and create some simplicity -- that’s a really powerful thing. We all know that good models that abstract away complexity and create simplicity are hugely valuable in helping organizations reconstruct themselves.

Gardner: Clearly, before the pandemic, some organizations dragged their feet on digital transformation as you’ve described it. They had a bit of inertia. But the pandemic has spurred a lot of organizations, both public and private, on.

Hopefully, in a matter of some months or even a few years, the pandemic will be in the rearview mirror. But we will be left with the legacy of it, which is an emerging business paradigm of being flexible, agile, and more productive.

Are we going to get a new mode of business agility where the payoff is it commensurate with all the work?

Agility augurs well post-pandemic 

Partridge: That’s the $6 million question, Dana. I would love to crystal ball gaze with you on that one because agility is key to any organization. We all know that there are constraints in traditional customer experiences -- making widgets, selling products, transactional relationships, relationships that don’t lend themselves to having digital value added to them. I wonder how long that model goes on for as we are experiencing this shift toward digital value. And that means not just selling the widget or the product, but augmenting that with digital capabilities, with digital insights, and with new ways of adding value to the customer’s experience beyond just the capital asset.

I think that was being fast-tracked before this global pandemic. And it’s the organizations now that are in the midst of doubling down on that -- getting that digital experience right, ahead of product and prices – that’s the key differentiator when you go to market.

And, for me, that customer experience increasingly now is the digital customer experience. I think that move was well under way before we hit this big crisis. And I can see customers now doubling down, so that if they didn’t get it right pre-pandemic, they are getting it right as they accelerate out of the pandemic. They recognize that that platform is the only way forward.

You will hear a lot of commentators talk about the digital agenda as being driven by what they call the platform-driven economy. Can you create a platform in which your customers are willing to participate, maybe even your ecosystem of partners who are willing to participate and create that kind of shared experience and shared value? Again, that’s something that HPE is very much invested in. As we pivot our business model, to EaaS outcomes, we are having to double down on our customer experience and increasingly that means digitizing that experience through that digital platform agenda.

Gardner: I would like to explore some examples of how this is manifesting itself. How are organizations adjusting to the new normal and leveraging that to a higher level of business capability?

Also, why is a third-party organization like HPE Pointnext Services working within an ecosystem model with many years of experience behind it? How are you specifically gearing up to help organizations manage the process we have been describing?

HPE digital partnerships 

Partridge: This whole revolution requires different engagement models. The relationship HPE shares with its customers is becoming a technologically enabled partnership. Whenever you partner with a customer to help advance their business outcomes, you need a different way to engage with them.

We can continue to have our product-led engagement with customers, because many of them enjoy that relationship. But as we continue to move up the value stack we are going to need to swing to more of an advisory-led engagement model, Dana, where we are as co-invested in the customers’ outcomes as they are.

We understand what they are trying to drive from a business perspective. We understand how technology is opening up and enabling those kinds of outcomes to be materialized, for the value to be realized.

A year ago, we set out to reshape the way we engage with customers around this conversation. To drive that kind of digital partnership, that means sitting down with a customer and to co-innovate, going through workshops of how we as technologists can bring our expertise to the customer as the expert in their industry. Those two minds can meld to create more than one plus one equals two. By using design thinking techniques and co-design techniques, we can analyze the customers’ business problem and shape solutions that manufacture really, really big outcomes for our customers.

For 15 years I have been a consultant inside of HP and HPE and we have always had that strong consulting engine. But now with HPE Pointnext Services we are gearing it around making sure that we are able to address the customers’ business outcomes, enabled through technology.

Never has there been a time when technology has been so welded into a customer's underlying value proposition. ... There has never been a more open-door policy from our partners and customers.

And the timing is right-on. Never has there been a time when technology has been so welded into a customer’s underlying value proposition. I have been 25 years in IT. In the past, we could have gotten away with being a good partner to IT inside of our customer accounts. We could have gotten away with constantly challenging that price and performance ratio and renovating that agenda so that it delivers better productivity to the organization.

But as technology makes its way into the underlying business model -- as it becomes the differentiating business model -- it’s no longer just a productivity question. Now it’s about how partners work to unlock new digital revenue streams. Well, that needs a new engagement model.

And so that’s the work that we have been doing in my team, the Digital Advisory and Transformation Practice, to engage customers in that value-based discussion. Technology has made its way into that value proposition. There has never been a more open-door policy from our partners and customers who want to engage in that dialogue. They genuinely want to get the benefit of a large tech company applying itself to the customers’ underlying business challenges. That’s the partnership that they want, and there is no excuse for us not to walk through that door very confidently.

Gardner: Craig, specifically at HPE Pointnext Services, what’s the secret sauce that allows you to take on this large undertaking of digital transformation?

Mapping businesses’ DX ambition

Partridge: The development of this model has led to a series of unique pieces of intellectual property (IP) we use to help advance the customer ambition. I don’t think there has ever been a moment in time quite like this with the digital conversation.

Customers recognize that technology is the fundamental weapon to transform and differentiate themselves in the market. They are reaching out to technology partners to say, “Come and participate with me using technology to fundamentally change my value proposition.” So we are being invited in now as a tech company to help organizations move that value proposition forward in a way that we never were before.

In the past, HPE’s pedigree has been constantly challenging the optimization of assets and the price-performance, making sure that platform services are delivered in a very efficient and effective way. But now customers are looking to HPE to uniquely go underneath the covers of their business model -- not just their operating model, but their business model.

Now, we are not writing the board-level strategy for digital ambition because there is a great sweet spot for us, rather it’s where customers have a digital North Star, some digital ambition, but are struggling to realize it. They are struggling to land those initiatives that are, by definition, technology-enabled. That’s where tech companies like HPE are at the forefront of driving digital ambition.

So we have this unique IP, this model we developed inside of HPE Pointnext Services, and the methodology of how to apply it. We can use it as a visualization tool, as a storytelling tool to be able to better communicate, and onward to further communicate your businesses’ digital ambitions.

We can use it to map out the initiatives and look at where those overlap and duplications occur inside organizations. We are truly looking at this from edge to cloud and as-a-service -- that holistic side of the map helps us unpick the risks, dependencies, and prerequisites. We can use the map to inspire new ideas and advance a customer’s new thinking about how technology might be enabled.

We can also deploy the map with our building blocks behind each of the journeys, knowing what digital capabilities need to be brought on-stream and in what sequence. Then we can de-risk a customer’s path to value. That’s a great moment in time for us and it’s uniquely ours. Certainly, the model is uniquely ours and the way we apply it is uniquely ours.

But it’s also a timing thing, Dana. There has never been a better time in the industry where customers are seeking advice from a technology giant like HPE. So it’s a mixture of having the right IP, having the right opportunity, and the right moment as well.

Gardner: So how should such organizations approach this? We talked about the methodology but initiating something like this map and digital ambition narrative can be daunting. How do we start the process?

How to pose the right questions 

Partridge: It begins by understanding a description of this complex landscape, as we have explored in this discussion. Begin to visualize your own digital ambition. See if you can take two or three top initiatives that you are driving and explore them across the map. So what’s the overriding KPI? Where does it start?

Then ask yourself the questions in the middle of the map. What are the key enablers? Am I addressing a shared intelligence backbone? How am I handling trust, security, and resiliency? What am I doing to look at the operating model and the people? How is the culture central to all of this? How am I going to provide it as-a-service? Am I going to consume component parts of the service? How to stress over into the supply chain? How is it addressing the experience?

HPE Pointnext Services’ map is a beautiful tool to help any customer today start to plot their own initiatives and say, “Well, am I thinking of this initiative in a fully 360° way.”

If you are stuck, come and ask HPE. A lot of my advisors around the world map their customers initiatives over to this framework. And we start to ask questions. We start to unveil some of the risks and dependencies and prerequisites. As you put in more and more initiatives and programs, you can begin to see duplication in the middle of the model play out. That enables customers to de-risk and be quicker to path of value because they can deduplicate what they can now see as a common shared digital backbone. Often customers are running those in isolation but seeing it through this lens helps them deduplicate that effort. That’s a quicker path to value.

We engage customers around one- to two-day ideation workshops. Those are very structured ways of having creative, outside-of-the-box type thinking and putting in enough of a value proposition behind the idea to excite people.

We do a lot around ideation and design thinking. If customers have yet to figure out a digital initiative, what’s their North Star, where should they start? We engage customers around one- to two-day ideation workshops. Those are very structured ways of having creative, outside-of-the-box-type thinking and putting in enough of a value proposition behind the idea to excite people.

We had a customer in Italy come to us and say, “Well, we think we need to do something with AI, but we are not quite sure where the value is.”

Then we have a way of engaging to help you accelerate, and that’s really about identifying what the critical digital capabilities are. Think of it at the functional level first. What digital functions do I need to be able to achieve some level of outcome? And then get that into some kind of backlog so you know how to sequence it. And again, we work with customers to help do that as well.

There are lots of ways to slice this, but, ultimately, dive in, get an initiative on the map, and begin to look at the risks and dependencies as you map it through the framework. Are you asking the right questions? Is there a connection to another part of the map that you haven’t examined yet that you should be examining? Is there a part of the initiative that you have missed? That is the immediate get-go start point.

Gardner: I’m afraid we will have to leave it there. We have been examining how to better architect businesses for not only managing ongoing disruption, but to get to a new and better way of doing business.

And we have learned how HPE Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging market opportunities.

So please join me in thanking our guest, Craig Partridge, Senior Director Worldwide, Digital Advisory and Transformation Practice Lead at HPE Pointnext Services. Thank you so much, Craig.

Partridge: Thanks, Dana. It was great fun speaking to you again.

Gardner: And thanks as well to our audience for joining this sponsored BriefingsDirect Voice of Innovation Discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of HPE-supported discussions.

Thanks again for listening. Please pass this along to your IT community and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. See the video. Sponsor: Hewlett Packard Enterprise.

A discussion on how HPE Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging opportunities. Copyright Interarbor Solutions, LLC, 2005-2020. All rights reserved.

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