Greatest Data Challenges Facing Large Enterprises in 2023
On this episode of The Six Five – Insider Edition, hosts Daniel Newman and Patrick Moorhead welcome Otho Lyon, VP of Global Support at Cloudera.
Their discussion covers:
- Why adaptability is crucial for cloud deployments
- The frequent changes organizations are facing today
- How data optimization drives decision-making within organizations and how it impacts growth
- How data growth will impact the IT workforce
- Critical innovation for the future
It’s a stimulating conversation, and one you won’t want to miss.
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Patrick Moorhead: Hi, this is Pat Moorhead and we are here for another Six Five Insider, where we talk with the most influential executives from the most impactful companies. And we are here to talk about the greatest challenges facing data leaders in 2023. I know that’s a mouthful, but it’s not enough, though, for Daniel Newman here, my amazing co-host, because he understands this stuff. Daniel, how you doing, buddy?
Daniel Newman: Hey, I think a big part of making this show a success is having people that know the material and have some insights about it. That’s why we are all about no news and lots of analysis, Pat, here on the Six Five, but buddy, I am excited to be back, excited to talk a little bit about data challenges.
Anybody that’s not paying attention to how companies, large and small, are addressing the most complicated data challenges right now probably aren’t very interested in growing their businesses or being successful. So a little cliche to start the show, Pat, but, hey, it wouldn’t be the Six Five if we weren’t spinning tall tales, would it?
Patrick Moorhead: It really wouldn’t. But like you said, the best thing about the show is our amazing guests and I’m going to bring, introduce Otho Lyon. Otho, how are you?
Otho Lyon: I’m doing well. How are you guys doing? Good to see you again. I know that.
Patrick Moorhead: I know. Second or third. Actually, I think this is the third time on the Six Five, and we just love having guests back. We just pick up where we left off and the last time we chatted, I believe, was in New York at your huge customer event that you had. So, listen, Otho, you’re on the front lines of Cloudera and you’ve got really great insights into some of your biggest customer challenges out there and you are the data company, Cloudera. It seems like you have a lot of opinions out there, but for the sake of the audience who may not know you, can you talk a little bit about what you do for Cloudera?
Otho Lyon: Sure. My name is Otho Lyon. I’m located in the great state of North Carolina. Raleigh, North Carolina, and I run global support for Cloudera.
Patrick Moorhead: Excellent. Thanks for coming on the show.
Otho Lyon: Yeah.
Daniel Newman: Yeah, it’s always good to have people back multiple times. We’ve got a great community here on the Six Five. Of course we’ve got to do that whole thing, Otho, because there are new people that have not watched all the shows. Sometimes I’m stunned when I find that out.
Patrick Moorhead: I know.
Otho Lyon: Yeah.
Daniel Newman: Some of the recent onslaught, Pat, where we’ve been at Reinvent or we’ve been at CES, people just come up to us, we’re like, “We love your show.” We’re starting to get a little bit of a complex that we’re famous, Otho, but in reality, lots of tech talk, lots of videos. You’re a really smart guy on this topic and I’m going to hold you to that now. So just giving you a heads up now, you’ve been proclaimed by Patrick, one of the most influential analysts on the planet, and myself as being a really smart guy. We’re going to hold you to that in the show, but are you ready to rock and roll-
Patrick Moorhead: Come on, Dan. Let’s get to the meat. Let’s jump in, baby.
Otho Lyon: I’m ready. Let’s jump in. I’m ready.
Daniel Newman: All right. So let’s actually start there. Adaptability. Everybody’s moving to the cloud under the onus that it gives you more flexibility, agility, and adaptability. You’re talking to the frontline data leaders, you’re talking about what these real challenges are for either moving to cloud or hybrid cloud. What are you seeing in terms of changes and challenges inside the organizations as it relates to adaptability?
Otho Lyon: Yeah, great question. It’s interesting. Leaders now are trying to adapt to change and obviously the change that they can’t affect. So these things are starting to happen, whether it’s banking, whether it’s manufacturing, the financial sectors, you name it. Everybody’s having to make adjustments and the biggest thing is cost. Even in Cloudera, we’re all looking at cost deficiencies, right? Optimization.
And so, Pat, you wrote an article about Goldilocks. Is it all in on the cloud or is it all in on prem or is it somewhere in the middle that we play? And so that’s one of the things I like about Cloudera is this hybrid cloud, but the challenges is customers are trying to adopt and these changes are unpredictable. So unpredictability is one of those things where you need to be able and some of these CIOs need to have control to the greatest degree on a lot of this. So, for us, we’re trying to provide that hybrid kind of model for them where it’s first to cloud, come back. It’s all about having that flexibility and the distributed computing in their environments, where they run. Whether it’s traditional or cloud native, we want them to be able to have a flexible computing model.
Patrick Moorhead: Yeah, that’s exactly right, Otho. So first of all, thank you for reading my articles. I appreciate it. Sometimes I wonder who reads them-
Otho Lyon: I’m a big fan. I’m a big fan of you guys.
Patrick Moorhead: Yeah, the Goldilocks thing, you even picked up on that, so thank you very much. But you said it right, and Daniel on your intro, talking about the cloud was never invented to reduce costs. In fact, I haven’t talked to a single enterprise that said, “Cloud is reducing my costs,” but part and parcel to the cloud is that it’s everywhere. By definition, it’s got to be adaptable. It’s on the edge, it’s in your own data center, it’s in a colo, it’s in the public cloud, it’s in a sovereign cloud, it’s in the new cloud that the company you just bought had. So almost, by definition, has to be adaptable. And then, which I think we all believe here, that your data strategy has to follow that infrastructure strategy or be part and parcel to it, and then the value of the data adaptability is key.
I want to bring in something that some people have gotten tired of, but I haven’t. And that’s the value of data. And I still like data is the new oil. And we keep saying it, we keep saying it, saying it, but I think that about 90 to 95% of that data, last time I checked, is not actually being used or something meaningful is, let’s say, decision support. So how does the lack of using this data or the trend that you can monetize or improve customer service and stickiness, how does this impact a company’s growth and what needs to change to move this number up to a more reasonable level?
Otho Lyon: So, you said it. Data is the new oil. And the thing about it is companies now have to make data-driven decisions. And the challenge is it’s so much data out there. I think the estimates I saw recently, there’s going to be in 2025, 175 zetabytes of unstructured data out there. And so making decisions and being able to process that amount of data in a timely manner is on everybody’s mind. Because, right now, if you look at it, if you look at our shareholders, our shareholders are all about growth.
At the end of the day, how can we grow our company faster and bigger? And so, being able to take this data and crunch it and make decisions will be one thing that we’ll have to make sure that we solve. And that’s why I think Cloudera really does a good job. Like I say, I’m going to go back to the hybrid model. We are very good at the cost structure because that amount of data’s going to take up a lot of money, a lot of costs. You try to do 175 zetabytes in the cloud, you see what happens. You’re going to do a real big deal. Now AWS is going to be your friend, but that’s okay. I won’t… Oh, did I say their name? I’m sorry.
Patrick Moorhead: Well, just getting it there, right? And maybe it’ll be a, I forget the name of the snow, a Snow Leopard maybe, but a full Mack truck that you can move your data so.
Otho Lyon: Yeah, that’s critical. And then, obviously, now like you say, if the decision to keep data on prem or in the cloud, that right there, moving it back and forth is becoming something that’s becoming very costly. So right now, your data is very precious and it’s the company that figures out, “Hey, we can solve your problem with cost efficiency, but also with speed or velocity,” that will be the company that wins.
Daniel Newman: So, let me gently push back, Otho.
Otho Lyon: Sure.
Daniel Newman: I agree with everything you’re saying in principle. My fear as an analyst is when I listen to companies talk about the data challenge and the amount of data, I feel like this has been the same bullet point for 10 years. And I’m not disagreeing that the challenge is getting bigger, but you’re a company that’s supposed to be solving that challenge, and I think you do solve that challenge. Can you articulate that a little bit?
As companies are dealing with this bigger sense of data and moving from peta to zeta, right, the truck, the snow leopard, how are you actually enabling that to get done because I think that’s what a lot of them are asking. They’re hearing this story. Yes, data is exponential. Trust me, I’ve written that, Otho, in my Forbes column a billion times. It lands every time. But the problem is in the end, the customer goes, “All right, I get it. A lot of data. What do I do?”
Otho Lyon: So, to your point, I think that’s where we become the consultant to our customers. I run the support organization, which includes quite a lot, support and customer success. We have to start showing customers, getting in there, showing them and helping them with their use cases and helping them utilize and show them the value of our software. And so by being in there and being in the trenches with customers instead of talking to them from an abstract point of view is where I think we’re going to be able to capture a lot of customers.
My whole mantra and premise is “I’m going to help you. I’m going to leave you better than I found you.” And so any person that works for me, I’m asking them to get in there, roll your sleeves up and ensure that customers understand how to use their software, what type of data… First of all, what kind of data do they have? Understand that. And then how are we going to help them make informed decisions with their data by the software that we provide for them? And here’s the thing, it’s not a new thing. This is an old adage. Customer service is key. It is key to making people feel like they can succeed for the future.
Patrick Moorhead: Dan, I really appreciate you adding that. And the way that I get comfortable with this is to really understand some history. The first AWS service came out in 2004 and then, if you remember, the industry was crashing on the rocks with open stack, I think, gosh, 11 or 12 years ago. That only stuck with one vertical in a big way, which was Carrier. Carrier and Walmart. But then it took years for new hybrid solutions like CDP cloud to come out. And by the way, I’m not saying that’s bad. That’s really good. So we’re hybrid cloud software compared to how old, I guess, 19 years old the public cloud is, I think it’s just a matter of time when you put the maturation of the hybrid cloud tools like CDP attached to the conservatism of these large enterprises to do anything different.
And also, they’re waking up to the cost of egress. With big data organizations, a third of their IT budget could be just getting data from where the data is generated to where it needs to be processed in the public cloud. And none of us are saying the public cloud’s bad. It’s just, “Hey, it probably needs a balance with a hybrid cloud.” And that is the biggest thing that I see Cloudera bring to the table.
You talked about labor and the fact that it appears like we’re going into a recession. I guess, technically, we are in a recession or have been in a recession. Part of that is labor volatility. We don’t go a day where somebody hasn’t announced a giant layoff, particularly in tech now. Could spread to the rest of industry, but there still are a lot of jobs out there in the IT sector. In fact, they can’t get enough data people out there. And I’m curious, can the job workforce keep up with the demand for data growth? Particularly, again, these cuts to me are a momentary thing. Or will innovation somehow bridge the gap between that to either operate and do what you’re doing today with fewer people or do more with the same?
Otho Lyon: Yeah, so it’s interesting because that’s kind of some of the things that we face. We’re looking at the volatility in the growth in the job market and one of the things that we are having to make big adjustments on is not only just volatility, but the remote worker. And I think that’s where a lot of companies are really kind of honing in on and selling on, “Hey, we know we’re going to have remote workers, so we’ve got to make sure that our processes, our workflows, all these types of things can adjust to having workers that are remote.”
And so I think that’s very critical to the people growth. To your point, there are plenty of jobs out there, but not enough people, so innovation is going to be a critical part of this. One of the things I’ve been doing some reading on this whole chatGPT thing, which is kind of blowing up. And it’s like, these are some of the things that maybe you can integrate into some of the workflows that will help you be able to offset not being able to hire a person.
So the AIML model is starting to really come to fruition here in the near term. So I think that’s going to be important. So innovation will be something that we’ll have to figure out. And then, obviously, I’m a big advocate of pushing folks into STEM, whether it’s science, math, technology. And I’m hugely trying my best to ensure that more students are going to school majoring in computer sci, computer tech, things of that nature, so that we do have a workforce that we can see in the next 10 years that can take over for us.
Daniel Newman: Yeah, I think you’re sort of referring to, though, the human machine. In the future, there will be more integration. I want to plug my book-
Patrick Moorhead: Hey, yeah, I was going to say, “Didn’t you write a book on that, Dan?”
Otho Lyon: You did write a book. Yes, you did.
Daniel Newman: …human machine. But I think I want to just talk about the two sides of that, Otho, because, obviously, we are seeing this kind of global reduction in force. We are seeing a lot of conversations in this macro about less talent, but at the same time, you said something really interesting. There may be cut backs, but the actual needed talent, the people that can handle these data pipelines and people that understand analytics, data scientists, data leaders that we’re speaking to are actually in super high demand.
So while you see 3%, 7%, 10% work forces being cut, those job recs, they’re not going away. And so what are you recommending? I know I heard one of your good partners, IBM, Arvind Krishna, keeps saying that IT is the most protected line item in any enterprise budget right now. And he also said something along the line of, “Technology will grow 2 to 4% faster than GDP right now.” So he’s basically saying tech is deflationary. As GDP slows, tech will grow. Data leaders are going to be the most in demand or among the most in demand to enable. So what are you telling your enterprise and your customers about figuring this problem out of the shortage?
Otho Lyon: So, some of the things that we’re doing, and to your point, when you’re talking to leaders, hey, you have to change the way you offer your… Or let me back up. You have to actually start working with these leaders and you have to change the way that you approach these new workers today, and one of them is the remote side. I think that’s one of the things that is very, very dear to a lot of these new engineers is that, “I like to work from home, and it’s easier for me to work from home than to work in an office.”
I know there’s a lot of controversy out there right now with folks saying, “Well, I want people back in the office and I’m going to lose that level of camaraderie.” I think there’s a balance. And one of the things that we’ve done is we’ve got this hybrid approach to getting folks back into the workplace. That’s going to be one of the big ones.
And I know, for me, it’s a big one. I come into the office two days a week, but I also like working from home. So your approach to hiring will have to change and the profile that you hire will have to change. And we’re slowly but surely approaching this you can hire from anywhere and pay them anything. And that’s going to, right there, is going to attract a lot of engineers coming in, especially when you start looking offshore. We had this mantra of low cost now. Maybe it’s no longer low cost. Maybe it’s whatever you pay for the best engineer to work for you in your industry.
Patrick Moorhead: Yeah, it’s amazing. There’s a couple ways to look at this, the labor challenges, and I have listened to these conversations since the mid-80s, and they really don’t change. First of all, there’s a fear of technology replacing people. That conversation goes all the way back to the wheat thresher and the Industrial Revolution and how it brought people from farms into the city. And the conversation we’re having now is, “Will technology replace people?”
But the irony here of is we can’t get a lot of people to do a lot of the jobs. We’re talking about layoffs, but the frontline workers and the amount of programmers and data science experts that are out there. So that’s the weird dichotomy here. So I actually think the industry, what it’s doing is it’s just reacting with automation and, again, same classic argument. “Does automation replace people?” Or is it doing stuff that people don’t actually want to do?
Otho Lyon: Right. Yeah.
Patrick Moorhead: So, I don’t think that’s going to be going away anytime. All I know is that the last 12 times we did this test since the Phoenician era, it has not wound up with people having less work to do. And it was funny, back even 50 years ago, the theory was that we were going to have a 20-hour work week, but what we actually did is we filled that time with, guess what, more work. Anyways, I’m sure for the next 50 years, we will be debating that.
I want to get a little bit more literal here and I want to align ourselves with CDP. Otho, we talked about adaptability, we talked about data being the new oil, people aren’t using it. We talked about the labor market volatility. How does CDP… What are you offering for customers and how do they get engaged? How do they kick this off?
Otho Lyon: So, for us, I think it comes with that initial contact for myself is just a general conversation. I’ll tell you what’s interesting. I was in the airport and I was getting ready to fly out and I was sitting next to a gentleman and we just struck up a conversation. And I had no clue who he was, and come to find out he works for a large bank and he’s in charge of their data department. And so we were talking about it, and I said, “Had you ever heard of Cloudera?” And he says, “Faintly.” Right? And so I started to give him… Of course, I was talking to him about CDP and some of the things we’re doing, streaming and all that, these types of things. And he was like, “I’m very interested in that. Give me your business card and let’s have a follow-up conversation.”
I say, “Okay, well let me give you a business card and then we’ll all join together.” And I say all that because sometimes it’s just a general conversation that’s how we’re starting these conversations with new customers. Existing customers, obviously, those touchpoints. That’s why I think it’s so critical to have customer success, to have someone talking to those customers, understanding their use cases and being able to touch them frequently.
Because if you don’t do that, customer will churn on you very fast. And so I think the other side of this is making sure that everyone in the company understands what it is that you do and how you do it. And that’s from the COE that takes the case to the CEO who runs the company. Everyone has to understand. And so, for us, we have this class called the modern data architect. Everybody has to be able to speak the speak. And I think that’s critical to starting those conversations because we all know people. We have a big network-
Patrick Moorhead: That’s really cool. I expected you to give this big CDP pitch, which I hope you will, but what you’re talking about is almost advocacy selling of everybody in the company getting around it.
Otho Lyon: Absolutely.
Patrick Moorhead: So you don’t have a sales force of 200. You have a sales force of thousands. Just kind of talking about you. That’s really fascinating.
Otho Lyon: And obviously CDP, that’s near and dear. We’re data services. I will pitch that. One of the big things I think that’s going to be emerging on the forefront is our streaming, CDF, the UDD, because that’s going to help customers get data out of the silos and get it to where it needs to be. Because right now, a lot of data’s stuck. So how do we get all that unstuck data out? So I think that’s going to be one of the big things.
The other thing is, like you say, the data services, those microservices. That’s going to be the next big thing for Cloudera. And I’m excited because I think Cloudera is on the precipice of just taking it to the next level when it comes to helping customers make those informed decisions with their data.
Daniel Newman: Well, we know that hybrid architecture’s one out and Cloudera has gone all in on hybrid. I like your story a lot about the airport. You’re sort of understanding that pretty much anywhere you sit, anyone you chat to, they now have the capacity to understand the critical importance of data in their organization’s long-term journey. So you really have seen, symbiotically, data’s moved from the D suite to the C suite.
It really was a data thing and now it’s a C-level thing that they’re thinking about. And going forward, Otho, I think more of those kinds of conversations really, to use the customer success example, it really is consultative. What are you trying to solve? What are you trying to use data to solve? And I think a lot of times we’ve gotten into the technology. Is it in the cloud? Is it hybrid? Is it on prem? What’s the app look like?
What’s the UX? What’s the building? What’s the development? Those are all things and in the end you’ve got to worry about that stuff, but that question of what you’re trying to solve and then it’s how do we get there, doing it together? Who’s the best company to work with? And I think you guys are really starting to find that story. By the way, narrowing your focus. I used the IBM analogy earlier. Cloudera can benefit from a similar run to what IBM’s done. You’ve gotten narrower, you’re getting more focused, your story’s getting more in line with the architectures the enterprises are using, and now you just need to stand at the bar longer, Otho. Get more data leaders to give you their business card.
Otho Lyon: You know what? I don’t mind standing at the bar and having that conversation because the thing about it is, and this is another thing that I tell all my folks, you have to care about the customer. And that’s not a cliche for me. You have to care about what the customer’s trying to achieve because a lot of times, a lot of pressure on a lot of these leaders here to make the right decision. And I want to be there to help them to make the right decision. So call me if you need me to just have a conversation at the bar. I’ll be there. Drinks on me.
Daniel Newman: All right. You heard it here. Otho at the bar. Whatever airport you’re at, Otho’s there. And if you’re not there, he’ll give you his credit card or he’ll Venmo you or something. And in all fairness, Otho, we’ve got to run. But thank you so much. Really enjoyed the conversation. Always great to have you on the Six Five. I expect this won’t be the last time.
Otho Lyon: Thank you, gentlemen. Thank you so much.
Daniel Newman: All right, for everybody out there, go ahead and hit that subscribe button. Be part of our community of Six Five. Six Five’s weekly show, Six Five’s insider editions like this one, on the road, at events around the world and in the booth at some of the most important tech companies in the world. And finally, Six Five summits back in June. We appreciate you all. Got to go. Bye.
Patrick Moorhead: Bye.
Daniel Newman is the Chief Analyst of Futurum Research and the CEO of The Futurum 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