In this episode of the Futurum Tech Podcast – Interview Series, part of the HPE Executive Insights Series, I am joined by Darren Perks, Global Hosting Infrastructure Operations Leader at PwC, and Vishal Lall, SVP & GM at HPE GreenLake Cloud Services Solutions, for a conversation focusing on modernization and business model challenges in the industry.
In our conversation we discussed the following:
- Key objectives for the coming year for data centers and modernization
- Drivers for PwC’s data center consolidation
- A look into PwC’s modernization journey and how it reflects HPE’s own journey
- Challenges of upgrading business models & expected outcomes
- Best practices from the modernization experience.
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Daniel Newman: Hey everyone. Welcome back to another episode of The Futurum Tech podcast. I’m your host, Daniel Newman, principal analyst, founding partner at Futurum Research. Excited for this interview series. We’re going to be talking to two experts and leaders at the respective companies at HPE and PWC. And we’re going to be talking about cloud and cloud transformation and some of the big challenges that enterprises have right now. If I may say so myself, I always love when I can talk to a vendor or a technology company and their customers, and in this case a company that does a lot of technology advising themselves. So a great conversation here today on the Futurum Tech podcast. So without further ado, let me make a couple introductions. I got Darren Perks here with PWC and I’ve got Vishal Lall with HPE. Gentlemen, welcome to the show.
Vishal Lall: Thank you Daniel. Thanks for having us over.
Daniel Newman: It’s good to have you both here. I got a lot of thoughts about where we’re sort of heading in this cloud transformation and I’m probably, if anyone out there knows me at all, I’m going to share those thoughts. But the beautiful thing about having guests is getting other people’s thoughts and ideas out there. So before I do that though, before I start asking you all questions, Darren, why don’t just do a quick introduction and tell us a little bit about yourself, your work at PWC?
Darren Perks: Yeah, no problem at all. Great to be here. My name’s Darren Perks. I work for Pricewaterhouse Cooper’s IT Services Co, which is a entity within the Pricewaterhouse network. It is responsible for its global delivery. And in that I’m responsible for the operation, the global hosting operations for our cloud and on premise solutions that we provide not only to our territories and our internal users, but in some cases to our external business as well. That basically is for on premise data centers, two in Frankfurt, one in Singapore, one in the US, as well as our usage of Azure, GCP, and AWS. So overall we’ve got about 20,000 workloads. We manage directly another 30 or so 1,000 indirectly.
Daniel Newman: Great to have you here, Darren. Vishal?
Vishal Lall: My name is Vishal Lall. I run the cloud services business at HPE as well as our software portfolio. So it’s all about helping our customers transform to cloud, similar to what you said, Daniel, including kind of our key asset around private cloud as well as hybrid cloud solutions. In addition, I also own a couple of our software assets around DevOps as well as data services that are providers as part of our relay software, relay Cloud portfolio.
Daniel Newman: These are big mandates that you both have and it’s always great to be out there talking about what we’re doing, because hopefully, I always say that the high tide rises all boats, there’s some truth to that and there’s so much to learn. The transformation that’s going on certainly acts as a competitive advantage. What we see at future in research is that companies that are getting this right, that are making these migrations, understanding and Vishal, I’m glad you said private and hybrid, because a lot of times when people say cloud, the immediate assertion is that we’re talking about hyperscale public cloud. And the reality is what’s going on with transformation is one, the battle has been fought and it’s actually over hybrid and multi are going to be the architectures of enterprises of the future. It is not going to be all in the public cloud.
Second observation that we’re certainly making is, even though a couple years ago we were saying only a small percentage, less than 25 or in the percent of workloads are in the public cloud, it’s been a few years later and we’re still hovering right around that data point. It hasn’t changed that much. And that’s because of a couple of different things. That’s because the whole landscape of applications and enterprise workloads continues to grow. And even though more workloads are ending in the public cloud, there’s more workloads as a whole. And of course the proliferation of data is probably one of the biggest opportunities and biggest challenges for enterprises across the planet. More data creates more opportunities to get closer to your customers, build better supply chain, improve operations, but it also creates all kinds of challenges. So I guess that’s what I’m seeing. And with that in mind gentlemen, I’d love to ask you, Darren, maybe to go first, but what are kind of the big objectives that you have in the coming year for your transformation?
Darren Perks: Well, it’s interesting because obviously nothing is a yearly challenge anymore. It’s an ongoing, really iterative process. So our North Star strategy or our digital mission is to try and utilize the cloud as much as possible. And that’s hybrid cloud, public, private, et cetera. And we want to be able to be in best position our hosting service for our clients, both internal and external at the lowest cost. That really is about supporting how our territories, our member firms exit their data, their individual data centers and move to a consolidated hosting platform. Whether that’s private, on premise, cloud centrally managed in the global arena or whether that’s in the Azure, DCP, AWS public cloud. And so one of the challenges we are going to have in the next 12 months is how we accommodate effectively our biggest territory, aiming to shut down their data center?
Daniel Newman: Yeah. Exactly.
Darren Perks: You’re about to ask a leading question there.
Daniel Newman: No, it’s a significant mandate, is really what I was thinking. And that’s a massive challenge. Of course that’s probably why these partnerships that you’re working on with companies like HP are so critical. So I want to bounce this over to Vishal. What are you seeing, obviously in alignment with a company like PWCs massive, we’ll hit that in a minute, but what are your big objectives? Because this is, by the way, this role that’s new to you, you’ve had a pretty significant expansion and shift in your role as well.
Vishal Lall: Yeah, no thanks Daniel. I’ve been in this role now about a year and the objective is very straightforward. It’s if you take it to a high level of 30,000 foot level, my objective is to help our customers transform in the cloud journey. And that cloud journey, I think as you look at it over the last seven, 10 years is changed. If you ask one of our enterprise clients seven or 10 years ago, hey, are you thinking about going to cloud? They would be like, yeah, I’m thinking about going to public cloud. If you ask the same question today in terms of, hey, what’s your journey? They say, hey, we are using multiple public clouds today. We are looking at modernizing our existing data centers. We are using more polos. We are trying to go to more for private cloud. We are trying to orchestrate across the private public continuum.
It’s a multi-cloud world. And most of our customers know that they are going to live in that world now. And again, as we build our cloud solutions, our take was very simple. The question was, hey, why is public cloud attracted to our customers? And I can get into that in more detail, but it’s like in three or four levels. One is experience, the second was TCO, third was just abstraction of complexity. And the last one I think is the scalability and expansion that public cloud provided. So as we built out our cloud solutions, our take was let’s go address each of them, which we have been able to, but at the same time bring benefits to the table that we can’t get from the public cloud. Things like cost predictability, things like low latency for data intensive workloads, things of that nature. So we’ve been very, very thoughtful in terms of addressing customer needs and then building out our private as well as hybrid cloud solution in that context.
Daniel Newman: Yeah, I’m glad you said that. By the way, your four points, I might steal those and write an article or tweet that, because I think that’s really well said, Vishal, how you consolidate the four reasons, the company movement. I think it’s important, like I said, to continue to lean into the fact that it is about experience, it is about ease. And of course it has been a lot about the financial engineering of it. Why did HPE move to the quote, everything as a service? Well the bottom line, had a lot to do with the bottom line and it was people want to consume IT differently. So Darren, when it comes to PWCs data center consolidation, talk a little bit about what drove that.
Darren Perks: Okay, well it’s been a multi-year strategy to do that. Really kicked off in 2017 as our central European entity wanted to exit their mirrored data centers in Prague, followed by the UK wanting to exit their mirrored data centers as well. So there’s huge costs in these legacy mirrored data centers where full DR capability was available always on et cetera. And what we’re seeing now is that this is giving us the ability to obviously consolidate, shut down these smaller territory closets to the medium sized data centers, to the large entities and give ourselves a single or near significant reduced number of security perimeters. So we have to manage one, maybe 20 security perimeters rather than 130 security perimeters that we would’ve had to do previously. So it gives us that the better ability to run our hardware and our services a higher capacity, rather than being very distributed, et cetera.
So that’s really where we’re coming from here. It also puts us in the position as well, where we can control the standards as we exit those data centers, we’re no longer in that business. It was very 20 year ago from thinking where we were, we wanted to run our own data centers. There are people that do that far better than we do in most circumstances. So get it all to the center, making a decision as you move, whether it goes to the private, public or traditional host. Because there’s still reasons for it, because we get driven by clients requirements. Some clients are still not on board with the cloud and sometimes we have to just keep it on premise. Yeah.
Daniel Newman: I think that’s probably the maturation of this industry in this space. Obviously every company and every customer is a little bit unique. And so that uniqueness has sort of been the gaining factor to some of that public cloud scale. And of course every company trying to figure out how to run it, that’s why there’s massive multi-billion dollar consulting firms, PWC. And that’s why companies like HPE didn’t just acquiesce and say, oh you’re right, the public clouds here and we’re here. And you guys basically said, I think we need to build a bridge to the public cloud. And not only do we build a bridge, but we might have a mouse trap that is better. I mean to me, Vishal, it feels like this has a very nice mirroring to the HPE journey of moving to everything as a service moving to a very hybrid cloud oriented architecture. Do you see that parallel with the PWC journey?
Vishal Lall: Oh, very much so. And we are seeing it with multiple customers as well, right? I mean, if you look at it, I mean what Darren you were talking about in terms of existing data centers, et cetera. I mean, a lot of our customers are having the exact same, we are having the same conversations with our customers. Basically what’s happening is, and I think it’s gotten worse with COVID, is a lot of our customers are realizing they don’t want to be in the business of running data centers, less than apparel company or retail company. I mean, they’d rather leverage their limited resources that they have in the IT to focus on business specific applications. So anything kind of infrastructure related, running the infrastructure. I mean, they’re basically saying at this point, hey can I find a different means to do that? And again, what we are seeing is that our customers, and I think you’re one of them as well, is looking at each of these decisions on a workload by workload basis.
So there are some workloads that are really good for public cloud. It gets the right TCO, it gives you the right scale. If there’s high variability like seasonality, et cetera, it’s probably the right place to go. There are a set of workloads that are much more effective and efficient if it’s in a very automated private cloud IT modality. So again, it’s a workload by workload decision that we are seeing. But most of our customers are having the discussion around, let’s get out of the data center. Maybe we just have our applications in a colo plus public cloud. Some of them are saying, hey, I don’t want to manage it myself. HP, can you manage it? Or I just put something in the public cloud. But that’s the conversation that is happening all the time.
Actually we just did that ourselves as well as a company, because if you remember our transformation, we had spun out other old EDS business [inaudible 00:13:49]. So our data center actually went with that part of the business. Over time, we have transformed that into a private cloud. We have moved all our applications into a private cloud. So again, we’ve gone ourselves as a company we’ve gone down that journey as well.
Daniel Newman: Yeah, and it’s been a fun one to watch, Vishal. I’ve been watching from the onset of what’s been happening, how companies are thinking about this? And it is a very interesting sort of continuum of choice. All the OnPrem companies are moving towards the cloud, all the cloud companies are moving towards OnPrem. And if there wasn’t a clear market indicator of where we were going to land, is that everybody was working towards where they weren’t, that might have been the most evident proof point.
And of course this is just across talking to lots and lots of customers and of course there is this continuum. Some companies are 70% in the public cloud, some are five percent in the public cloud. And so for you, Darren, though, a company like PWC, tons of choice, tons of companies would obviously be courting you for your business. And you can only put your chips in on so many different bets. You can’t bet on every company. Apparently you feel that what HP and GreenLake is doing was right for you. Talk about what kind of drew your appeal, what sort of made you and your team comfortable that this as a service model and this partnership with HP was the right way to go?
Darren Perks: Well, I think our partnership went back a long way from a pure hardware team type relationship. And we’ve been a long time user of HP, but as we came up through starting to do technology refreshes in 2016, we really found, as it was called then, flexible capacity service or configuration service, it really met our requirement. It gave us that almost enforced four year refresh cycle. It gave us our ability to have a cloud-like offering, where we could burst and contract within our hardware on site and more importantly, gave us an OPEX model. So we had a very easy to manage monthly payment for that four year period. And if we ever needed to increase, we could move to a just in time purchasing model. And we weren’t happy to worry about that annual large purchase that we were traditionally doing instead of buying couple of hundred bigger storage, which we do now.
At the time we were buying petabytes type thing, just to make sure we had the budget, that OPEX model and that just in time delivery really worked well and it gave us that the ability to respond to clients. So we didn’t have to buy you a piece of hardware and you’re going to wait six weeks. We went into our buffer zone, we came out of our buffer zone and that’s really what we got, and that’s why we moved from our initial implementation in Germany, into Singapore and into the US. It really fitted well with that. People thinking like cloud like to start with.
Daniel Newman: So with that in mind though, this is a good question for both of you, because you got the technical chops. From semi just to applications, it’s not just lift and shift. I think there’s so much of this kind of perception that’s like, oh, why not just move it all to the cloud? I mean, part of the reason more isn’t in the cloud is, because it takes time or it’s expensive, but some of it is just technically things don’t work or do not work easily. I love as a pundit, because I’m an analyst, I don’t have a real job, but I can say things like use Kubernetes or, and I’m being a little facetious, but Vishal, I’m sure you guys deal with this all the time. It’s not that easy. You don’t just lift and ship. What are some of the big reasons you don’t see the workload move to the cloud and how important is this a partnership like this for helping companies to figure out which are those workloads that can go, which aren’t, and maybe what a realistic migration timeline looks like?
Vishal Lall: I’ll give you my perspective, Daniel and I would love to hear Darren’s kind of perspective as well, because I’m sure he’s looking at it across his 50,000 workflows that he manages. I mean, really, I think I’ll put it on one word, is the data. I mean, end of the day, if you really look at multi factor applications, moving an application, just the application by itself, is some amount of work, but still less. But if you really have a ton of data that is in your existing systems, in your premises and you have business critical systems that are running off that data and that have low latency requirements, it gets very difficult. And at that point to lift and shift the entire, and you can, but then what also happens is the ingress and ingress charges associated with data from public cloud makes it very, very expensive.
So as we speak with our customers, they’re looking at all of these variables as they are thinking about, hey, what can I move? Again, I look at it and say, okay, there’s some things like a mobile front, right? Easy to build on the public cloud. But once there’s a lot of data in the public cloud, then you start getting into data. See the other question, I mean, I think the other topic really that’s of interest is data silos.
Our enterprise customers started using public cloud. Over time they’re using multiple public clouds and then they have on premises infrastructure as well, on-premises data store as well. And all of a sudden now they’re living across three or four data silos and they can’t get access to the data, they can’t get business value across data. So the whole bunch of new problems that are also dropping up with the advent of public cloud and the utilization of public cloud that we did not think about earlier. But again, I’d love to get Darren’s perspective as well on this in terms of lift and shift off applications. Why isn’t it all that simple and trivial?
Daniel Newman: Yeah, I think we kick this over to you, Darren. I would say though you didn’t even mention the edge, but we can talk about that later. That’s a whole ‘nother ball of wax, right?
Vishal Lall: Absolutely. And especially the latency issues associated there. The need for connectivity is absolutely important as well. And again, in some cases where we see kind of manufacturing locations et cetera, hospital systems, it’s difficult, especially when you have business critical applications that are running on the edge.
Daniel Newman: Absolutely. So Darren, what’s your take on the lift and shift in those challenges?
Darren Perks: Well, I think it’s interesting, because the whole lift and shift, it’s as Vishal said, it’s not easy, but everybody thinks it is, because everybody is doing it and then they’re realizing how difficult it actually is, because the system doesn’t perform or it doesn’t communicate or the costs have suddenly gone through the roof, because they didn’t consider rearchitecting, replatforming, et cetera. So we’ve been seeing lift and shift systems suddenly costing significantly more once they get into the cloud, because of the different charges to do with bandwidth, the ingress et cetera. As well as it not performing, because they just chose the standard server that they needed to choose, because it was very cheap and then the storage doesn’t perform. Whereas they’re very used to OnPrem and in a private cloud, where we all have high speed SSDs or MBME drives, et cetera, that’s not there in the cloud unless you pay extra for it. So that’s the sort of thing, I think it’s easy to do until you realize it’s not easy.
Daniel Newman: Wait, all storage isn’t created equal?
Darren Perks: Ah, it’s shiny. Yeah, not…
Daniel Newman: Wait. All CPUs don’t have the same performance? I could go on all day, but we don’t have all day, bunch of busy folks on this pod. I’m sure everybody out there is too. So let’s talk about outcomes. One of my favorite things, besides everything as a service, is kind of the outcome as a service idea. Increasingly businesses are trying to get to a state of which they can look at their technology investments as drivers of the business. Whether that’s efficiency, whether that’s productivity, whether that’s customer and delivery from a PWC point of view. Darren, what are some of the outcomes that you’re hoping that this migration and this model and the implementation are going to enable for you and for PWC and your customers?
Darren Perks: Well, I think the important thing is speed to market and the ability to deliver at the speed of business. Historically, IT has never been able to keep up, because of those demand and the supplier chain issues and things, which just shouldn’t be there now, either with an on-premise cloud or private cloud or a public cloud. So we want to get there. We’re moving to try and position ourselves as a digital company, as you said at the beginning. In some respects we compete with HP, et cetera. Some ways we go together, we go together to market, but ultimately we want to deliver our internal systems at the speed the business is, and that’s what this starts to give us.
Daniel Newman: Yeah, I like that. I imagine, first of all, just the competition thing, is that what we call it? I don’t know. There’s a word that we all like to use for that, very common these days. I mean, technology companies, as you all want to continue to solve all your customers problems, the portfolios tend to grow. But I always say I find the cooperation to be pretty inspiring that you all are able to put your commons aside and bring in best of breed A and best of breed B and solve problems. Vishal, what are some of the outcomes that you’re looking at, not just with PWC, but for HP as a whole with the customers that you’re serving?
Vishal Lall: I mean, end of the day, very similar to how Darren put it, right? We are looking at the outcome that we are trying to help our customers with is around business agility. As we work with our customers, they realize that they need to move faster to be ahead of the competition. And so what we are trying to do is make sure that we are enabling that business agility across the entire IT operations, so that they are able to respond faster to market trends and faster to customer requirements. So that’s kind of the main thing that we are enabling them with. Infrastructure is a piece of it, software is a piece of it, data is a big element of that. So that’s kind of how we are thinking about how we can be successful. We can be successful when our customers are successful and when they’re more agile.
Daniel Newman: Yeah, absolutely. So speed around question, because this is probably my favorite to ask when I have experts like both of you. And by the way, thank you so much for just taking the time here with me. It’s a lot of fun to talk and hear. You both have the benefit of talking to tens of dozens, of hundreds, of thousands of customers, sometimes both directly, sometimes through your teams. Vishal, what are some of the key learnings that you’re able to maybe share for all those out there, that are in the process of thinking about their own migrations and their challenges to get their systems optimized?
Vishal Lall: Yeah, I mean I’ll kind of focus on the cloud transformation for, as our customers are thinking about this, and again, like I said, their thought process has evolved and is evolving, right? Because the technologies are evolving as well. So at some point people will kind of focused on, hey, I want to go to public cloud. Now it’s most of our customers have realized that the best answer for them is some form of combination of public clouds, plus private cloud and then being able to have some element of orchestration across them. So that’s kind of like where our customers are and they’re looking at kind of advancement in technology.
Especially I think the on premises world was much behind the public cloud four or five or three years ago. I think the gap between the two is much lower now. So I think as we are talking with the customers, they’re kind of getting excited about the potential of getting that same benefit that they saw in public cloud onto where the applications are, where the data are, and that in that context, build out their transformation journey. So that’s kind of the key, I think I would say, Daniel, in terms of where we are seeing our customers and the excitement that we are seeing with them around hybrid, I’m actually super excited myself as I kind of sit down with them. And like I said, I’ve been in this role for the last year, talking to a ton of customers. I personally am very pumped at the opportunity that I see around both private and hybrid in context of a multicloud world.
Daniel Newman: Absolutely. That’s great insights, Vishal. Darren, I’d love to have you take us home if you can even layer down one more level to what you’re seeing and obviously in the implementations that you’re doing both with HP and across the cloud ecosystem.
Darren Perks: Yeah, firstly, I agree with everything Vishal said, but I’d add to that, is don’t rush into it. Cloud in its public sense is not everything everyone thinks it is. Look at your workloads, look at your data, look where it needs to be and how you need to manage it. Look at your cost profiles, how they compare to what they are now, how they will be in the cloud and re-architect. Don’t just lift and shift. It would be painful longer term and cost you much more.
Daniel Newman: That’s a great set of points. And as someone that commentates not only a lot on the technology, but the markets themselves. I actually think one maybe small silver lining of a little bit of economic slowdown is companies being a little bit more thoughtful. Now, none of us like this in terms of getting our contracts and getting our businesses executed across the line. We’ve heard some of the CEOs go on TV lately and talk about elongated deal cycles, but there has been a bit of a board level command of moving to the cloud that, I don’t know that it was all founded in science. Some of it was just we want to be in the cloud, because we think that’s where we want to be.
And I think taking that time to assess your landscape, understand your applications, your business, your data, figuring out the right partnerships, moving at a pace that is at the right speed for you and your business and your clients, these are all really important things. Darren and Vishal, I want to thank you both for just a ton of expertise here. Can’t believe it’s already been 30 minutes. You two both are really making meaningful contributions to the market, to your customers. And of course, congratulations on the partnership. I think there’s a lot of workloads to be moved and a lot of opportunity for the both of you.
Darren Perks: Great, thank you very much.
Vishal Lall: Thank you, Daniel. Thank you, Darren.
Daniel Newman: All right everyone, you heard it here first. I want to thank both HPE and PWC for participating in this Futurum Tech podcast. Excellent guests. Check out the show notes or some links to learn more about both companies. Those links will give you a little bit more insight and follow up on the things that you heard both of them say. It’s a fast moving world. Transformation is all around us, and the cloud is certainly going to be part of that story as is data, AI, automation, Edge. We talked about all that a little bit here, but if you want to learn more about all the things going on across the tech industry, hit subscribe button, join this Futurum Tech podcast. We have lots of interviews, lots of great guests, lots of experts. Promise you, you’ll be entertained. But for this episode, I got to go. Got to say goodbye. Thanks for tuning in.
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio