Transcript of a discussion on what enterprises can do to make the most of hybrid cloud models and be ready specifically for Microsoft Azure Stack solutions.

1. Hybrid Cloud Ecosystem Readies for
Impact From Microsoft Azure Stack
Transcript of a discussion on what enterprises can do to make the most of hybrid cloud
models and be ready specifically for Microsoft Azure Stack solutions.
Listen to the podcast. Find it on iTunes. Get the mobile app. Download the
transcript. Sponsor: Hewlett Packard Enterprise.
Dana Gardner: Welcome to the next edition of the BriefingsDirect Voice of the Customer
podcast series.
I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and
moderator for this ongoing discussion on digital transformation strategies. Stay with us
now to learn how agile businesses are fending off disruption -- in favor of innovation.
Our next cloud deployment options interview explores how hybrid cloud ecosystem
players such as PwC and Hewlett Packard Enterprise (HPE) are gearing up to support
the Microsoft Azure Stack private-public cloud continuum.
We’ll now learn what enterprises can do to make the most of hybrid cloud models and be
ready specifically for Microsoft’s solutions for balancing the boundaries between public
and private cloud deployments.
Here to explore the latest approaches for successful hybrid IT, we’re joined by Rohit “Ro”
Antao, a Partner at PwC. Welcome, Ro.
Ro Antao: Thanks a lot, Dana. Thrilled to be here, and
thanks for having me.
Gardner: We’re glad you are with us. We are also joined by
Ken Won, Director of Cloud Solutions Marketing at HPE.
Welcome back, Ken.
Ken Won: Hi, Dana. Excited to be here with you again.
Gardner: Ro, what are the trends driving adoption of hybrid
cloud models, specifically Microsoft Azure Stack? Why are
people interested in doing this?
Antao: What we have observed in the last 18 months is that a lot of our clients are now
aggressively pushing toward the public cloud. In that journey there are a couple of things
that are becoming really loud and clear to them.
Antao

2. Journey to the cloud
Number one is that there will always be some sort of a private data center footprint.
There are certain workloads that are not appropriate for the public cloud; there are
certain workloads that perform better in the private data center. And so the first
acknowledgment is that there is going to be that private, as well as public, side of how
they deliver IT services.
Now, that being said, they have to begin building the capabilities and the mechanisms to
be able to manage these different environments seamlessly. As they go down this path,
that's where we are seeing a lot of traction and focus.
The other trend in conjunction with that is in the public cloud space where we see a lot of
traction around Azure. They have come on strong. They have been aggressively going
after the public cloud market. Being able to have that seamless environment between
private and public with Azure Stack is what’s driving a lot of the demand.
Won: We at HPE are seeing that very similarly, as well. We
call that “hybrid IT,” and we talk about how customers need to
find the right mix of private and public -- and managed services
-- to fit their businesses. They may put some services in a
public cloud, some services in a private cloud, and some in a
managed cloud. Depending on their company strategy, they
need to figure out which workloads go where.
We have these conversations with many of our customers
about how do you determine the right placement for these
different workloads -- taking into account things like security,
performance, compliance, and cost -- and helping them evaluate this hybrid IT
environment that they now need to manage.
Gardner: Ro, a lot of what people have used public cloud for is greenfield apps --
beginning in the cloud, developing in the cloud, deploying in the cloud -- but there's also
an interest in many enterprises about legacy applications and datasets. Is Azure Stack
and hybrid cloud an opportunity for them to rethink where their older apps and data
should reside?
Antao: Absolutely. When you look at the broader market, a lot of these businesses are
competing today in very dynamic markets. When companies today think about strategy,
it's no longer the 5- and 10-year strategy. They are thinking about how to be relevant in
the market this year, today, this quarter. That requires a lot of flexibility in their business
model; that requires a lot of variability in their cost structure.
When you look at it from that viewpoint, a lot of our clients look at the public cloud as
more than, “Is the app suitable for the public cloud?” They are also seeking certain cost
advantages in terms of variability in that cost structure that they can take advantage of.
And that’s where we are seeing them look at the public cloud beyond just applications in
terms that are suitable for public cloud.
Won

3. Public and/or private power
Won: We help a lot of companies think about where the best place is for their traditional
apps. Often they don’t want to restructure them, they don’t want to rewrite them,
because they are already an investment; they don’t want to spend a lot of time
refactoring them.
If you look at these traditional applications, a lot of times when they are dealing with data
– especially if they are dealing with sensitive data -- those are better placed in a private
cloud.
Antao: One of the great things about Microsoft Azure Stack is it gives the data center
that public cloud experience -- where developers have the similar experience as they
would in a public cloud. The only difference is that you are now controlling the costs as
well. So that's another big advantage we see.
Won: Yeah, absolutely, it's giving the developers the experience of a public cloud, but
from the IT standpoint of also providing the compliance, the control, and the security of a
private cloud. Allowing applications to be deployed in either a public or private cloud --
depending on its requirements -- is incredibly powerful. There's no other environment out
there that provides that API-compatibility between private and public cloud deployments
like Azure Stack does.Solutions
Gardner: Clearly Microsoft is interested in recognizing that skill sets, platform affinity,
and processes are all really important. If they are able to provide a private cloud and
public cloud experience that’s common to the IT operators that are used to using
Microsoft platforms and frameworks -- that's a boon. It's also important for enterprises to
be able to continue with the skills they have.
Ro, is such a commonality of skills and processes not top of mind for many
organizations?
Antao: Absolutely! I think there is always the risk when
you have different environments having that “swivel
chair” approach. You have a certain set of skills and
processes for your private data center. Then you now
have a certain set of skills and processes to manage
your public cloud footprint.
One of the big problems and challenges that this
solves is being able to drive more of that commonality
across consistent sets of processes. You can have a
similar talent pool, and you have similar kinds of
training and awareness that you are trying to drive
within the organization -- because you now can have
HPE Private and Public
Hybrid Cloud Solutions
for Microsoft Azure Stack
The biggest
challenge to
adopting new
concepts is not
the technology;
it's really the
people and
process issues.

4. similar stacks on both ends.
Won: That's a great point. We know that the biggest challenge to adopting new concepts
is not the technology; it's really the people and process issues. So if you can address
that, which is what Azure Stack does, it makes it so much easier for enterprises to bring
on new capabilities, because they are leveraging the experience that they already have
using Azure public cloud.
Gardner: Many IT organizations are familiar with Microsoft Azure Stack. It's been in
technical preview for quite some time. As it hits the market, in seeking that total-solution,
people-and-process approach, what is PwC bringing to the table to help organizations
get the best value and advantage out of Azure Stack?
Hybrid: a tectonic IT shift
Antao: Ken made the point earlier in this discussion about hybrid IT. When you look at
IT pivoting to more of the hybrid delivery mode, it's a tectonic shift in IT's operating
model, in their architecture, their culture, in their roles and responsibilities – in the
fundamental value proposition of IT to the enterprise.
When we partner with HPE in helping organizations drive through this transformation, we
work with HPE in rethinking the operating model, in understanding the new kinds of roles
and skills, of being able to apply these changes in the context of the business drivers
that are leading it. That's one of the typical ways that we work with HPE in this space.
Won: It's a great complement. HPE understands the technology, understands the
infrastructure, combined with the business processes, and then the higher level of
thinking and the strategy knowledge that PwC has. It's a great partnership.
Gardner: Attaining hybrid IT efficiency and doing it with security and control is not
something you buy off the shelf. It's not a license. It seems to me that an ecosystem is
essential. But how do IT organizations manage that ecosystem? Are there ways that you
all are working together, HPE in this case with PwC, and with Microsoft to make that
consumption of an ecosystem solution much more attainable?
Won: One of the things that we are doing is working with Microsoft on their partnerships
so that we can look at all these companies that have their offerings running on Azure
public cloud and ensuring that those are all available and supported in Azure Stack, as
well as running in the data center.
We are spending a lot of time with Microsoft on their ecosystem to make sure those
services, those companies, or those products are available on Azure Stack -- as well
fully supported on Azure Stack that’s running on HPE gear.
Gardner: They might not be concerned about the hardware, but they are concerned
about the total value -- and the total solution. If the hardware players aren't collaborating
well with the service providers and with the cloud providers -- then that's not going to
work.
Quick collaboration is key

5. Won: Exactly! I think of it like a washing machine. No one wants to own a washing
machine, but everyone wants clean clothes. So it's the necessary evil, it’s super
important, but you just as soon not have to do it.
Gardner: I just don’t know what to take to the dry cleaner or not, right?
Won: Yeah, there you go!
Antao: From a consulting standpoint, clients no longer have the appetite for these five-
to six-year transformations. Their businesses are changing at a much faster pace. One
of the ways that we are working the ecosystem-level solution -- again much like the deep
and longstanding relationship we have had with HPE – is we have also been working
with Microsoft in the same context.
And in a three-way fashion, we have focused on being able to define accelerators to
deploying these solutions. So codifying a lot of our experiences, the lessons learned, a
deep understanding of both the public and the private stack to be able to accelerate
value for our customers -- because that’s what they expect today.
Won: One of the things, Ro, that you brought up, and I think is very relevant here, is
these three-way relationships. Customers don't want to have to deal with all of these
different vendors, these different pieces of stack or different aspects of the value chain.
They instead expect us as vendors to be working together. So HPE, PwC, Microsoft are
all working together to make it easier for the customers to ultimately deliver the services
they need to drive their business.
Low risk, all reward
Gardner: So speed-to-value, super important; common solution cooperation and
collaboration synergy among the partners, super important. But another part of this is
doing it at low risk, because no one wants to be in a transition from a public to private or
a full hybrid spectrum -- and then suffer performance issues, lost data, with end
customers not happy.
PwC has been focused on governance, risk and compliance (GRC) in trying to bring
about better end-to-end hybrid IT control. What is it that you bring to this particular
problem that is unique? It seems that each enterprise is doing this anew, but you have
done it for a lot of others and experience can be very powerful that way.
Antao: Absolutely! The move to hybrid IT is a fundamental shift in governance models,
in how you address certain risks, the emergence of new risks, and new security
challenges. A lot of what we have been doing in this space has been in helping that IT
organizations accelerate that shift -- that paradigm shift -- that they have to make.
HPE Private and Public
Hybrid Cloud Solutions
for Microsoft Azure Stack

6. In that context, we have been working very closely with HPE to understand what the
requirements of that new world are going to look like. We can build and bring to the table
solutions that support those needs.
Won: It’s absolutely critical -- this experience that PwC has is huge. We always come up
with new technologies; every few years you have something new. But it’s that
experience that PwC has to bring to the table that's incredibly helpful to our customer
base.
Antao: So often when we think of governance, it’s more
in terms of the steady state and the runtime. But there's
this whole journey between getting from where we today
to that hybrid IT state -- and having the governing
mechanisms around it -- so that they can do it in a way
that doesn't expose their business to too much risk.
There is always risk involved in these large-scale
transformations, but how do you manage and govern
that process through getting to that hybrid IT state?
That’s where we also spend a lot of time as we help
clients through this transformation.
Gardner: For IT shops that are heavily Microsoft-
focused, is there a way for them to master Azure Stack,
the people, process and technology that will then be an
accelerant for them to go to a broader hybrid IT
capability? I’m thinking of multi-cloud, and even being able to develop with DevOps and
SecOps across a multiple cloud continuum as a core competency.
Is Azure Stack for many companies a stepping-stone to a wider hybrid capability, Ro?
Managed multi-cloud continuum
Antao: Yes. And I think in many cases that’s inevitable. When you look at most
organizations today, generally speaking, they have at least two public cloud providers
that they use. They consume several Software as a Service (SaaS) applications. They
have multiple data center locations. The role of IT now is to become the broker and
integrator of multi-cloud environments, among and between on-premise and in the public
cloud. That's where we see a lot of them evolve their management practices, their
processes, the talent -- to be able to abstract these different pools and focus on the
business. That's where we see a lot of the talent development.
Won: We see that as well at HPE as this whole multi-cloud strategy is being
implemented. More and more, the challenge that organizations are having is that they
have these multiple clouds, each of which is managed by a different team or via different
technologies with different processes.
There’s this
whole journey
getting to that
hybrid IT state
and having the
governing
mechanisms
around it.
HPE Private and Public
Hybrid Cloud Solutions
for Microsoft Azure Stack

7. So as a way to bring these together, there is huge value to the customer, by bringing
together, for example, Azure Stack and Azure [public cloud] together. They may have
multiple Azure Stack environments, perhaps in different data centers, in different
countries, in different locales. We need to help them align their processes to run much
more efficiently and more effectively. We need to engage with them not only from an IT
standpoint, but also from the developer standpoint. They can use those common
services to develop that application and deploy it in multiple places in the same way.
Antao: What's making this whole environment even more complex these days is that a
couple of years ago, when we talked about multi-cloud, it was really the capability to
either deploy in one public cloud versus another.
Few years later, it evolved into being able to port
workloads seamlessly from one cloud to another.
Today, as we look at the multi-cloud strategy that a lot
of our clients are exploring this: Within a given
business workflow, depending on the unique
characteristics of different parts of that business
process, how do you leverage different clouds given
their unique strengths and weaknesses?
There might be portions of a business process that, to
your point earlier, Ken, are highly confidential. You are
dealing with a lot of compliance requirements. You may
want to consume from an internal private cloud. There
are other parts of it that you are looking for, such as
immense scale, to deal with the peaks when that
particular business process gets impacted. How do you go back to where the public
cloud has a history with that? In a third case, it might be enterprise-grades workloads.
So that’s where we are seeing multi-cloud evolve, into where in one business process
could have multiple sources, and so how does an IT organization manage that in a
seamless way?
Gardner: It certainly seems inevitable that the choice of such a cloud continuum
configuration model will vary and change. It could be one definition in one country or
region, another definition in another country and region. It could even be contextual,
such as by the type of end user who's banging on the app. As the Internet of Things
(IoT) kicks in, we might be thinking about not just individuals, but machine-to-machine
(M2M), app-to-app types of interactions.
So quite a bit of complexity, but dealt with in such a way that the payoff could be
monumental. If you do hybrid cloud and hybrid IT well, what could that mean for your
business in three to five years, Ro?
Nimble, quick and cost-efficient
Antao: Clearly there is the agility aspect, of being able to seamlessly leverage these
different clouds to allow IT organizations to be much more nimble in how they respond to
the business.
Within a given
business
workflow, how do
you leverage
different clouds,
given their unique
strengths and
weaknesses?

8. From a cost standpoint, and this is actually a great example we had for a large-scale
migration that we are currently doing to the public cloud. What the IT organization found
was they consumed close to 70 percent of their migration budget for only 30 percent of
the progress that they made.
And a larger part of that was because the minute you have your workloads sitting on a
public cloud -- whether it is a development workload or you are still working your way
through it, but technically it’s not yet providing value -- the clock is ticking. Being able to
allow for a hybrid environment, where you a do a lot of that development, get it ready --
almost production-ready -- and then when the time is right to drive value from that
application -- that’s when you move to a public cloud. Those are huge cost savings right
there.
Clients that have managed to balance those two paradigms are the ones who are also
seeing a lot of economic efficiencies.
Won: The most important thing that people see value in is that agility. The ability to
respond much faster to competitive actions or to new changes in the market, the ability
to bring applications out faster, to be able to update applications in months -- or
sometimes even weeks -- rather than the two years that it used to take.
It's that agility to allow people to move faster and to shift their capabilities so much
quicker than they have ever been able to do – that is the top reason why we're seeing
people moving to this hybrid model. The cost factor is also really critical as they look at
whether they are doing CAPEX or OPEX and private cloud or public cloud.
One of the things that we have been doing at HPE through our Flexible Capacity
program is that we enable our customers who were getting hardware to run these private
clouds to actually pay for it on a pay-as-you-go basis. This allows them to better align
their usage -- the cost to their usage. So taking that whole concept of pay-as-you-go that
we see in the public cloud and bringing that into a private cloud environment.
Antao: That’s a great point. From a cost standpoint, there is an efficiency discussion.
But we are also seeing in today's world that we are depending on edge computing a lot
more. I was talking to the CIO of a large park the other day, and his comment to me was,
yes, they would love to use the public cloud but they cannot afford for any kind of latency
or disruption of services because that means he’s got thousands of visitors and guests in
his park, because of the amount of dependency on technology he can afford that kind of
latency.
And so part of it is also the revenue impact discussion, and using public cloud in a way
that allows you to manage some of those risks in terms of that analytical power and that
computing power you need closer to the edge -- closer to your internal systems.
Gardner: Microsoft Azure Stack is reinforcing the power and capability of hybrid cloud
models, but Azure Stack is not going to be the same for each individual enterprise. How
HPE Private and Public
Hybrid Cloud Solutions
for Microsoft Azure Stack

9. they differentiate, how they use and take advantage of a hybrid continuum will give them
competitive advantages and give them a one-up in terms of skills.
It seems to me that the continuum of Azure Stack, of a hybrid cloud, is super-important.
But how your organization specifically takes advantage of that is going to be the key
differentiator. And that's where an ecosystem solutions approach can be a huge benefit.
Let's look at what comes next. What might we be talking about a year from now when we
think about Microsoft Azure Stack in the market and the impact of hybrid cloud on
businesses, Ken?
Look at clouds from both sides now
Won: You will see organizations shifting from a world of
using multiple clouds and having different applications or
services on clouds to having an environment where
services are based on multiple clouds. With the new
cloud-native applications you'll be running different
aspects of those services in different locations based on
what are the requirements of that particular microservice.
So a service may be partially running in Azure, part of it
may be running in Azure Stack. You will certainly see that
as a kind of break in the boundary of private cloud versus
public cloud, and so think of it as a continuum, if you will,
of different environments able to support whatever
applications they need.
Gardner: Ro, as people get more into the weeds with
hybrid cloud, maybe using Azure Stack, how will the
market adjust?
Antao: I completely agree with Ken in terms of how organizations are going to evolve
their architecture. At PwC we have this term called the Configurable Enterprise, which
essentially focuses on how the IT organization consumes services from all of these
different sources to be able to ultimately solve business problems.
To that point, where we see the market trends is in the hybrid IT space, the adoption of
that continuum. One of the big pressures IT organizations face is how they are going to
evolve their operating model to be successful in this new world. CIOs, especially the
forward-thinking ones, are starting to ask that question. We are going to see in the next
12 months a lot more pressure in that space.
Gardner: These are, after all, still early days of hybrid cloud and hybrid IT. Before we
sign off, how should organizations that might not yet be deep into this prepare
themselves? Are there some operations, culture, and skills? How might you want to be in
a good position to take advantage of this when you do take the plunge?
Plan to succeed with IT on board
You will see
that as a break
in the boundary
of private cloud
versus public
cloud, so think
of it as a
continuum.

10. Won: One of the things we recommend is a workshop where we sit down with the
customer and think through their company strategy. What is their IT strategy? How does
that relate or map to the infrastructure that they need in order to be successful?
This makes the connection between the value they want to offer as a company, as a
business, to the infrastructure. It puts a plan in place so that they can see that direct
linkage. That workshop is one of the things that we help a lot of customers with.
We also have innovation centers that we've built with Microsoft where customers can
come in and experience Azure Stack firsthand. They can see the latest versions of Azure
Stack, they can see the hardware, and they can meet with experts. We bring in partners
such as PwC to have a conversation in these innovation centers with experts.
Gardner: Ro, how to get ready when you want to take the plunge and make the best
and most of it?
Antao: We are at a stage right now where these transformations can no longer be done
to the IT organization; the IT organization has to come along on this journey. What we
have seen is, especially in the early stages, the running of pilot projects, of being able to
involve the developers, the infrastructure architects, and the operations folks in pilot
workloads, and learn how to manage it going forward in this new model.
You want to create that from a top-down perspective, being able to tie in to where this
adds the most value to the business. From a grassroots effort, you need to also create
champions within the trenches that are going to be able to manage this new
environment. Combining those two efforts has been very successful for organizations as
they embark on this journey.
Gardner: Sounds like good advice. I’m afraid we’ll have to leave it there. We have been
exploring how hybrid cloud ecosystem players such as PwC and HPE are gearing up to
take the most advantage of Microsoft Azure Stack, and to help enterprise organizations
gear up and proceed well in managing the continuum of hybrid cloud options.
And we have learned how enterprises can do that by taking on more of a process,
people and technology perspective when it comes to hybrid IT. So please join me in
thanking our guests, Ro Antao, a Partner at PwC, and Ken Won, Director of Cloud
Solutions Marketing at HPE.
And a big thank you as well to our audience for joining this BriefingsDirect Voice of the
Customer digital transformation strategies discussion.
I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing
series of Hewlett Packard Enterprise-sponsored interviews.
HPE Private and Public
Hybrid Cloud Solutions
for Microsoft Azure Stack

11. Thanks again for listening, please pass this content along to your IT community, and do
come back next time.
Listen to the podcast. Find it on iTunes. Get the mobile app. Download the
transcript. Sponsor: Hewlett Packard Enterprise.
Transcript of a discussion on what enterprises can do to make the most of hybrid cloud
models and be ready specifically for Microsoft Azure Stack solutions. Copyright
Interarbor Solutions, LLC, 2005-2017. All rights reserved.
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