Cloudy with a Chance of Transformation

What the rise in cloud means for digital transformation

When it comes to humor, engineering jokes are the pinnacle of nerdiness. Here is one groan worthy contender I found recently:

Okay, it is not particularly good, but the punchline strikes a philosophical chord. A lot of the definitions for terms we use on engineering and product teams depends on who is asking.

A lot of people have been asking what digital transformation means of late. Some think it is a bunch of tools, something to do with Agile or DevOps, or perhaps new slogans:

While definitions may be vague, it is clear as the Van Halen song goes, everybody wants some. As Aaron Levie, Twitter celebrity and tech CEO shares about current IT strategy:

Even the more staid of enterprise tech giants are getting excited. Satya Nadella, CEO of Microsoft, spoke to the state of transformation after last quarter’s financial results:

Whatever this digital transformation thing is, what is abundantly clear is that there will be lots of cloud in the future. Recent events have unleashed the floodgates for change. How do we know? Just take a look at recent Q1 2020 results from the top cloud providers:

  • Amazon Web Services (AWS) — $10.2 billion in revenue
  • Microsoft Azure Cloud Platform — 59% increase in revenue
  • Google Cloud Platform — 52% increase in revenue
  • IBM Cloud and Cognitive Software — $5.24 billion in revenue

To be fair, a lot gets rolled into some of these numbers. For example, Microsoft rolls their Microsoft 365 suite into the cloud bucket, which also includes Teams. While the jury is out on the user experience, it is clear organizations are quickly getting on board with Teams which now has 75 million daily active users (nearly doubling in over a month).

With remote work becoming our norm, video conferencing has exploded. Sundar Pichai, CEO of Google, said there were now over 100 million daily Meet meeting participants and a 30x increase in growth since January. Zoom has seen an even bigger jump, seeing daily users balloon to more than 200 million in March from 10 million before the pandemic.

Even though Slack does not explicitly state user numbers anymore, they have seen a major surge in growth. They brought in 9,000 net new customers, nearly double from previous quarters, and saw well over 12 million simultaneously connected users.

While I am no prognosticator, I can definitely guarantee what the future looks like, and it is cloudy. Partly this is a response to the seismic shift in work patterns, but also a recognition that the cloud is a defensive position in the event of a crisis or catastrophe.

Well, the answers is, it depends. If your view of transformation is implementing cool technology, then it is a renaissance period. If you think it has more to do with organizational culture and new ways of working, then we may be in a holding pattern. We are in a period of hyper-urgency without full organizational strength.

The best way to describe what is going on is the analogy Ben Horowitz uses in The Hard Thing About Hard Things. He describes CEO’s as either wartime or peacetime leaders. During calm times, CEO’s can focus on expansion, culture building, and shoring up lesser performing parts of the business. During crisis, things switch to survival mode with all hands on deck to protect the business and cut loose any weak spots to survive the storm.

The war-time mentality is also shaping how companies are operating. For IT, this means a focus on business continuity, shifting resources for enabling remote work, increasing throughput and compute to support now overburdened digital channels, and tightening security. All this is happening as layoffs and budget cuts further strain resources. In a survey by PwC, 86% of CFO’s implementing cost containment measures and 70% scrapping planned investments. Do more with less is the new mantra for 2020.

It will be interesting to see what companies emerge as the winners from this period. Even as corporate leaders shift to wartime mode, can the important but not urgent work of transformation still take place?

Here are some thoughts on continuing the vision of transformational change in the face of increasing urgency and limited resources:

  • Alignment to Current Mission — The language we use has a significant influence on what gets heard. From this standpoint, transformation is a backburner topic for the C-suite. Everything is about resiliency. This is what has been fueling the huge growth in cloud services recently, and so anything that can reasonably support the “resilience” story will receive backing.
  • Tightly Defined Scope — There is little appetite for experimenting or uncertain outcomes in a crisis. This means any transformation work needs to be scoped in as atomic of units as possible with expected outcomes. The good thing is operating in an Agile framework supports faster delivery cycles. The emphasis needs to be on “time to value” and cost savings, so choosing initiatives that can deliver the goods quickly within scope is critical.
  • Protecting Work Improvement Time — I wrote before on the importance of paying down “complexity debt” for enabling businesses to accelerate product delivery and innovation. Many recommend building 20% of the time into every initiative for improving existing code, systems architectures, and work processes. Realistically this is hard to do in crisis mode, but there can be some time dedicated to the effort, especially if positioned as part of the resiliency mission. Automation and migration to self-service SaaS are two such initiatives that done within tighter scope and timelines can keep the transformation effort going.

What about culture shaping and explicit work improvement initiatives? That is a losing debate at the moment within most companies. The choices of initiatives you take on are limited because of the focus on the urgent matters. Forward-thinking organizations realize however that crises do not last forever. The winners from the 2008 financial crash and dot com tech bust of 2000 were the ones that doubled down on investing in the future.

How is your organization reacting to the pandemic? What is the percentage of time dedicated to urgent work versus innovation work at moment?

Reasons to Be Cheerful — Freakonomics Podcast

With all the depressing news, it may seem we are absorbed by negativity. But this podcast explored our inherent negativity bias and has some interesting ideas to ponder to help us rise above the clouds of doom that are consuming many of our thoughts during this pandemic.

Wondering what is up with the HERETECHS podcast? Season Two is coming up with new recordings coming out shortly. Also if you want to be a guest on the podcast and have unique thoughts on the state of IT and Engineering, let’s chat!

Check out past Heretechs podcast episodes on Apple Podcasts, Google Podcast, or wherever you listen to your favorite podcasts. Please like and subscribe 😁

We help IT leaders in enterprises solve the cultural challenges involved in digital transformation and move towards a community based culture that delivers innovation and customer value faster. Learn more about our work here.

Thoughts on developers, digital transformation, enterprise agility, community building & software engineering culture. Author 👉

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