KROME CAST: TECH-IT-OUT Everything-as-a-Service - How IT has transformed

In this episode of Krome Cast: Tech-it-Out, we discuss how IT has transformed with the use of Everything-as-a-Service and Hybrid-Cloud infrastructure.

Which cloud strategy is best suited for your business, Hybrid Cloud or XaaS? 

In this episode of Krome Cast: Tech-it-Out, we discuss how IT has transformed with the use of Everything-as-a-Service and Hybrid Cloud infrastructure and how we think things will change with the continued consumerisation of IT in the future.

This podcast features Krome’s Commercial Director, Sam Mager, along with Krome's CTO Rupert Mills, sharing their insights on the consumerization of IT and the benefits of using Hybrid Cloud over XaaS.

For more information contact Krome on 01932 232345 or visit www.krome.co.uk

► ABOUT KROME: Krome Technologies is a technically strong, people-centric technology consultancy, focused on delivering end-to-end infrastructure and security solutions that solve business challenges and protect critical data. We work collaboratively with clients, forming long-term business partnerships, applying knowledge, experience and the resources our clients need to solve problems, design solutions and co-create agile, efficient and scalable IT services.

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Transcript

SPEAKERS Sam Mager, Rupert Mills

Sam Mager  00:01

Welcome to Krome Cast, Tech-It-Out.  I'm Sam Mager, Commercial Director for Krome Technologies.  I'm back once again,  on the sofa, with Rupert Mills, my Co-Founder.

Rupert Mills  00:09

Hi Sam. 

Sam Mager  00:10

We're here to talk about the evolution of Everything as a Service, which I'm sure you'll agree, is certainly what we're seeing in the industry with this, move to consumption-based consumerisation of IT.  We're seeing it,  won't say forced upon us,  but there's been this kind of paradigm shift in the market from, buy it as a depreciating asset and run it over X amount of years,  then potentially sweat your asset,  and then large capital outlay into refresh.  And we've had that for many, many years.  And now we're seeing people actually trying to move from that capital expenditure into an operational expenditure.  And we've seen it with obviously,  the first big pushes really,  as your G Cloud, AWS, and that, Let's put everything in the cloud,  rightly or wrongly from a cost-saving perspective.  But advantage depending what type of business you are.  I guess, now we've seen that develop over the years,  it'll be interesting to see what your thoughts are, as you're probably more deeply involved in the coalface than I am, and some of the lessons learned that we've seen, both in large enterprise and an SME of people in this a, this move, I guess, let's start with the kinda of cloud model, but then what we're seeing today with the Desktop as a Service and Security as a Service,  and Everything as a Service.

Rupert Mills  01:25

Yeah, I guess it goes back to why people are making that move. It is just a change in the way businesses budget for the future,  the way businesses finance themselves.  It's the same way that cars have moved from,  you're going to buy a car and own a car, to most people these days, almost everybody leases a car and it's all about the monthly payment.  Your home shopping,  you don't go to HMV anymore and buy a DVD,  you subscribe to Netflix and you own a subscription to Netflix, and what that subscription of Netflix does for you over buying a DVD, is it means that you have access to a whole bunch of films instead of the one film you bought,  but you never actually own anything. And there are advantages and disadvantages to both sides,  pros, and cons to both sides.  And that's really a lot where IT is moving.  So historically, if you take the real basics of let's say Microsoft Office,  you would have bought your Office licenses and you would have owned Word, Excel, PowerPoint, etc. 

Sam Mager  02:22

With the paper licenses stuffed in the drawer somewhere.

Rupert Mills  02:24

Yep, paper license lost somewhere and never been able to find them when you need them.  But yeah, absolutely, you'd have owned that Office license,  and it was your decision whether or not you basically said,  I'm going to refresh that every time they come out with a new Office 2000, Office, whatever it was,  and, and you move forwards on your version.

Sam Mager  02:40

So people sit on, obviously, Software Assurance,  you could do that every three years, blah, blah,  we certainly saw people sitting on,  I won't name names, but as a legal firm,  I'm sure you know who I mean, who were sat on a very, very old version of Word that then became almost 10 years old, and wouldn't operate well and things etc,  but really sweated the asset,  which probably not sensible actually, given what they did. 

Rupert Mills  03:00

Yeah, that's ultimately that was the older operating model.  And I think the world has changed in as much as security policies,  all the various different systems you need to keep up to date,  the interaction between other people in the world.  So in those early days of Office,  you bought your old version of Office, and you owned it.  And if you own that for 7, 8, 9, 10 years,  and you didn't upgrade it, that was fine.  But the real problem started coming about when you started getting emailed files by people who were using newer versions of Office, and they'd send you generation ahead and your version Office wouldn't open it.  So that forced your hand into the upgrade.  And that was kind of the early days of Okay, things are now keeping up with the rest of the world isn't becoming important. In the latter time, security has made that a massive issue actually, if you don't keep things secure,  you don't keep up with where we are.  So people start moving from this,  okay, I'm going to buy it once every 5, 10 years to alright, I'm going to buy every 3 years because that's what's necessary.  And then it's the well if I'm buying it every 3 years,  instead of depreciating over 3 years,  why don't I move it into an operational expenditure and budget for it? Just because I'm buying it every 3 years anyway, and you're essentially leasing it a like a car or Netflix,  your mobile phone, yeah, absolutely. 

Sam Mager  04:12

That's where I think people are most familiar with when you start talking about different models.  And I've certainly seeing when I'm talking to customers,  and you'll get a push back,  we don't like finance and you can show them it'll be cheaper over time,  whatever it is.  And if you actually make it akin to do you have a mobile phone? Yes, I do, what do you pay for that mobile phone?  you can talk about actually consuming IT in that way, it's a really easy way for people to associate that model.

Rupert Mills  04:34

Yeah, absolutely.  And as we said,  that has advantages and disadvantages.  What people often fail to realise is you can do it with any kind of infrastructure,  you can do it with your historics, and your new cloud infrastructure.  You can do it across the board,  everybody will offer you that option in some way, shape, or form. I mean, we can offer a Desktop as a Service offering now, so you don't buy a desktop,  you can have a desktop from us,  it'll cost you x per month,  and then ultimately, you make sure that your desktop isn't more than four years old or five years old, whatever we set the contract up as,  and it's got the latest software on it and you just pay a fee for it every month, So all of these things coming together,  in the same way as you pay for Office 365, or Netflix.  I think, have moved the IT model on into that method of spend.

Sam Mager  05:17

Yeah, it's interesting, actually,  There's some things that personally, I think lend really well to be put into that model.  There's other areas and this is my personal opinion,  I'm sure some of our audience would disagree with me.  But personally, and you know,  we've had discussions with people that spend phenomenal amounts of money on cloud.  And there was a big push, let's put everything in the cloud,  because as you said, it's forecastable,  we can burst up, we can burst down,  there's loads of flexibility.  But when you really start to dig into some of those numbers,  it can become very expensive.  I'm not saying it's not right for certain people's businesses,  I think you really got to do the analysis to understand is that right for us, them, you know, as a business and the right application for it,  because Desktop as a Service,  we want that many times,  and you can show that it's actually cheaper than buying the capital asset and putting the wraparound service to bundle it all up.  When you start looking at putting all of your data,  your tier one services and everything else into the cloud,  and you start doing that cost calculation versus on-prem, etc.  You know as well as I do some of those numbers can be quite scary.

Rupert Mills  06:22

Yeah, absolutely.  It's, it's one of those things, I was talking to a client just yesterday about this,  and their conversation was,  we want a cloud-first strategy, I said absolutely have a cloud-first strategy,  but look at the cost implications of having that.  So the first remit for you is you want to decrease your management costs, your IT overhead cost for running your IT.  So a cloud-first strategy absolutely means, that other people are taking care of part of the infrastructure, part of the service.  And it decreases your management overhead.  But from a cost perspective,  you also need to look at what it's doing to your business and saying, are we paying a stupid premium for that?  are we paying the right premium for it?  Or is it actually cheaper?  And in certain circumstances. So actually, my recommendation was,  okay, look at a hybrid model.  Look at okay,  these things, Office 365,  back to that point, again,  absolute no brainer,  put it in the cloud,  unless you're in a very specific set of circumstances,  we have one particular client who has mining operations all over the globe. 

Sam Mager  07:21

But actually, before I think, yeah,  if you're in that sort of area where  connectivity and so on is a real struggle,

Rupert Mills  07:26

yeah, that Office 365 can be tricky in those scenarios. But for and we've got actually other similar clients who have similar challenges.  But as a general rule of thumb,  Office 365 is almost a no-brainer,  it is your go-out, and it's you're Amazon Prime,  your Netflix, it's a very common subscription.  Whereas, something like, I don't know, let's say, your finance system,  there are some really good finance systems in the cloud these days.  And there are some really good reasons to keep it on-prem.  So think about what does it tie into?  What does it link to?  What are the costs of running it?  And how does that work?  Sometimes the right decision will be absolutely put it in the cloud,  let's do that, it's the right way to do it.  Or sometimes the right decision will be put it on-prem.  But from your finance perspective,  you can run it either way,  because you can make it an operational expenditure on-prem if you wanted to, or in the cloud.  The one option you don't generally have is CapEX in the Cloud,  although you can future purchase, so if you want CapEX in the Cloud,  you can buy a 3-year contract and advance buy on that sort of stuff as well.  So really, I said, it's the one option you don't have, but I suppose you do. 

Sam Mager  08:26

Interesting. Yeah, like you say,  it comes down, it is horses for courses,  I suppose that's our job as an MSP  to work with the customer, understand which bits go where,  It's interesting, I look at,  again, how the market is going,  hence this conversation and we've seen a couple of big vendors now have really pushed forward their Everything as a Service.  And I'm just cautious if I'm honest with you, I'm wondering how they're going to execute that, well, I think there'll be some very large enterprises, we will get a lot of focus, and it will execute quite well.  And look at the scale of some of these guys and I, personal opinion,  wonder how they're going to adapt to do that in an SME to smaller enterprise market and actually execute that properly.

Rupert Mills  09:12

I think if you have a background conversation with a lot of those vendors,  a lot of them recognize although they're marketing the service out there,  they're only really interested in the people above a certain size,  because that's where they can really capitalise and they're expecting partners to pick up the people under a certain size and have a similar alternative service,  that will that will deal with that,  because they don't have the ability to drop down to that scale,  as opposed to some of the customers reach up to the scale that's interesting to the vendor.  But it's that whole thing is very similar to the historical sort of outsource insource conversation you've got that conversation where people have said,  right, I'm going to show a cost-saving by outsourcing and they outsource everything.  And then the next CIO through the door,  says actually, I'm going to share cost-saving by insourcing and actually what it is,  is a transitional change happening from time to time where people take the  I want to show a change,  so I want to show a shift and cloud has just become another word for outsourcing or OpEX, Everything as a Service,  just another word for outsourcing.  And I do wonder in the future,  whether or not we'll see some people moving back.  But part of the challenge with that is the big vendors,  and they've moved their business models to that way.

Sam Mager  10:23

That would be hard to keep them locked into that.

Rupert Mills  10:25

Yeah, absolutely.  I think that the IT model has transitioned in that direction.  There'll be some challenges to not come back.  But you start seeing terms like edge computing floating around now which cloud computing is great,  and then people start saying edge computing.  So what you mean is having a computer back in your office again.  And all these various different terms. it really is a one size doesn't fit all,  you need to find the right solution for the right client. And that's where it comes down to having the right advice.

Sam Mager  10:54

It's interesting you talk,  we've talked about outsourcing,  we've obviously seen it before,  we've been doing this long enough to see big businesses,  outsource insource outsource again,  and then come back and you are right,  it's always kind of new broom, show a cost saving.  But when you look at it over time,  it isn't necessarily the right way of doing it and I think it's just because one person comes in potentially with an agenda.  But if you're looking at it from the broader basis of being the right thing to do,  I think it does, you're obviously right,  it needs that analysis we need to look at with our customers,  what part should you consume?  365, obviously, it's a no-brainer.  Using the cloud, I think is a no-brainer.  For the right things, you put your backup in the cloud,  that's a great idea.  I think putting certain systems in the cloud,  depending on what dependencies they have is a great idea but when you start doing the kind of cost and efficiencies models,  there is still very much, we're pro hybrid.  We've done this enough to look at the financial models and the operational efficiencies of actually,  that's kind of where it sits.  It's interesting, you are right,  I wasn't gonna necessarily mention some of the stuff from the vendors, but you are right, I think they're cognizant of the fact that they know where they can play well,  and where they're weak, and that's definitely people of our kind of size and capability can step in and help, businesses are looking to leverage as a service,  but actually, get it right.  So it's not a poor investment.  If you're going to do it and actually make the most of it,  you've got to measure it,  measure it twice, cut once right,  and get it right, if you get it wrong, it is expensive,  you are locked into a contract of a certain duration,  because you have to be, to make the service work,  especially things like Desktop as a Service, 

Rupert Mills  12:32

discounting schemes and all the rest of it

Sam Mager  12:34

Exactly and read the residual values of the harbour and all that sort of stuff. It has to be a decent-sized contract for the business to actually to make it work.  So you've got to get the diligence done upfront, from our side from their side,  they've got to research the market to make sure they're working with the right partners.  So it's going to be really interesting,  I think, to see how this evolves over the next 5 years,  and whether it just goes completely, changes completely bit like outsourcing and insource,  everyone, grabs everything back and does it themselves.  I don't think it'll go that way.  I think there'll be a, like you said certain things too far.  Coming out 365, if you can use it, there's no good reason to,  you know, if you're using a good cloud backup system,  I can't think of a good reason to then bring that back on site and go back to this to this to tape and all that sort of stuff. It makes no sense. But like you said, so we have seen the let's go all cloud, retreat, let's go hybrid.  So I'm just interested to see where,  and obviously interested in your opinion, this kind of next 5 years, is that long enough? Do you think it will settle down in that period?

Rupert Mills  13:35

I think probably, I think there's, I think it depends on how you define settle down.  I think the push in the IT industry has always been for innovation.  Innovation is what brings new vendors to the market  and new vendors bring money into the IT industry.  So the IT industry focuses on pushing everything forward.  Because that's where they make their money.  We're not going to lie, ultimately,  we move forwards because people change their systems,  supporting things and looking after things  is definitely part of what we do.  But the big project transformations  are where ultimately the big vendors see their revenue  and ultimately where we see revenue.  So at the end of the day, that transformation is there.  The question really is whether or not that transformation delivers ROI for your business,  if it delivers ROI for your business in the next 5 years,  which things like O365 will, then do it.  Absolutely, it makes sense.  But analyse it for the right reasons  rather than it's the latest shiniest new toy, and by what's right for your business. 

Sam Mager  14:29

We've definitely seen some of that.

Rupert Mills  14:30

Yeah, been guilty of it ourselves.  It's what's the what's the right thing?  I think we've been doing this for long enough now  to work out that okay, It's about what's right for the business  and what's right for business A, may not be what's right for business B as well.  It's about individual analysis of what's right.

Sam Mager  14:48

You can't force a square peg through a round hole, right?  I guess that, again,  we've talked about this on the podcast before  but doing things that requirement definition workshops,  on ARDW's and whatnot, working with the customer to understand,  not just the technology stack, but how the business operates  and how they make their money, what they do, etc, etc,  and weighing all that up.  And then you can make,  you can offer advice  from an intelligent, educated position  to actually get that right and ensure that whatever they're doing, and you're right, I talk about 5 years in IT like,  not alot will happen, we can see huge amounts of innovation.  It could be to a single device,  I know that was put down before, we'd all have a mobile phone that you'd dock  and that becomes your laptop, keyboard and everything, we could well be there, we may not,  but the other radical changes in the next 5 years, that we'll all will have to adapt to,  and whatever cost consumption model fits that will be  which way the market goes.

Rupert Mills  15:38

If you go back to the late 90s,  and they were predicting that they basically,  within 5 years, you wouldn't have PCs on the desk anymore,  in the late 90s,  everything was going to be a web enabled machine,  you do everything in a browser. Actually, here we are 25 odd years later,  and you are starting to do  pretty much everything in a browser these days,  everything should be coming.  But you still got a PC on your desk or a laptop.  And again, take COVID, that whole change that's happened,  and actually all these people that went to work  and sat at a desktop, a lot those businesses have had to say,  actually will adopt a more agile work method  by using notebooks, laptops these days,  and allowing people to work from home.  That's been a massive change that no one would have looked at necessarily 5 years ago and predicted  because no one could have predicted COVID,  you never know what's coming out in this way.

Sam Mager  16:19

Hopefully not that again. 

Rupert Mills  16:20

yeah, some of those very confident predictions,  the very confident prediction from Larry Ellison. I have to I can't quote exactly, but was that the world of the of the many  1000s of pounds PC was going to go  because he was going to create these web boxes.  Now, that didn't actually happen.  But then he claimed success, because he said,  Well, the price of PCs come down,  so I've shifted the market, and I done what I intended to do. So you can look at it either way,  it was a success in one way or it wasn't in another.  But either way, we're still using PCs that many years later.  Yeah, I'll see you here in 5 years time, we can do another one these podcasts and look back and see what was a success and what wasn't. 

Sam Mager  16:57

See flying cars outside the window, hopefully. 

Rupert Mills  17:00

Yeah, we'll see. 

Sam Mager  17:02

Thanks for joining me.  And thank you for joining us  on this edition of Krome Cast, Tech-It-Out.  Remember to like, comment, subscribe and share.  And if there's anything you'd like us to cover on  future episodes then leave it in the comment section below. Thank you.