It is always exciting to meet executives of leading IT industry companies face-to-face. As an Infor customer, I had face-to-face meetings with Charles Philips, CEO at Infor’s New York headquarters, and Duncan Angove, one of the four presidents of Infor.
A few weeks before CeBIT started, an HPE employee asked me to meet face-to-face with Heiko Meyer, General Manager & Vice President Enterprise Group Germany, and Bärbel Meiborg, Manager Regional Sales Germany. Mr. Meyer and Ms. Meiborg were especially interested in the way the German “Mittelstand” (SMBs) is dealing with Digital Transformation and digitalization, and how HPE can support them.
Mr. Meyer was very clear when he stated to me that he considers Hybrid Cloud as the primary approach within the near—not distant—future. Of course, from HPE’s point of view, establishing Hybrid Cloud systems in the near future is very desirable. I wrote a rather critical blog post a few months ago on this topic: What Can We Expect From Hardware Vendors In The Cloud-Age?
I pointed out that, from an SMB’s point of view (who must handle increasingly complex IT on premises), moving systems to the Cloud is one way to gain flexibility and, more importantly, greatly minimize complexity. As a CIO, I prefer SaaS to IaaS, and IaaS to on-premises solutions. This is our strategy for the future, although it is not possible 100% of the time. Every new system we plan to implement must be able to be run in the Cloud. Existing systems will be analyzed, and, if possible, moved to the cloud.
SaaS will support our bimodal IT, which we just started implementing. Office 365 is a good example. In Mode 1 (predictable, improving, and renovating as Gartner suggests), we make sure to keep up our systems and rely on existing technologies that we already understand. Exchange will be migrated from 2010 on premises to 2016 in the Microsoft Azure Cloud. Standard procedures—no fancy stuff.
In Mode 2 (referring to Gartner: exploratory, experimenting to solve new problems), we use Cloud services to evaluate technology we have not yet used. In Office 365: Groups, Skype for Business, Planner, or Teams. Evaluating Skype for Business (formerly known as Lync) was impossible to do on premises, although we considered it. The only way to pull that off was to set up and configure all of the servers, but that was cost-prohibitive and risky (if the outcome had been negative). Activating Skype for Business in the Office 365 environment is so simple that it took not much more than a mouse-click.
In the meeting, we agreed that Hybrid Cloud would pave the way to the future. This will not be possible or necessary for every business, so on-premises solutions will still play a role. My prediction is that this will be required less and less. Most startups have already proven this—they don’t install servers if not absolutely necessary. These businesses use Cloud systems to scale and grow. Additionally, SMBs do not need complex IT like big enterprises, and yet they don’t take advantage of Cloud technology like they should. While security issues must also be considered, it has been my experience that data on premises is not safer than in the Cloud. See my post: Is Your Data More Safe On Premises Than In The Cloud?
Of course, running a Cloud system (SaaS or IaaS) is not cheaper than running the IT on premises . It might even look more expensive today. I am convinced that prices will keep dropping, and that utilizing the Cloud will eventually be less expensive than on premises IT. Consider the recent price raise of Microsoft Windows Server. It is much more expensive today. My peers argue that Microsoft did that to push businesses to the Cloud…and they are right! Is that fair? It doesn’t matter! Microsoft will do what they want whether we like it or not.
Digital Transformation in SMBs
We also discussed Digital Transformation in the German Mittelstand as such. Ms. Meiborg was amazed to see so many DX initiatives in that area, and I am as well. However, “bright lights cast dark shadows.” This is true for Digital Transformation. In my experience, many DX initiatives were started at the CIO level without much support from the CEO and other C-level executives. I recently wrote a blog post on this issue: Four DX Experiences from German “Mittelstand”.
All in all, it was a very interesting and open discussion. Both executives were sincerely interested in my opinion. I, too, learned about the strategy of one of our important partners. Thank you Ms. Meiborg and Mr. Meyer for your time.
The purpose of this blog is to start a discussion. Please leave your comments, whether you agree or if you disagree. I hope to hear from you!