Problem: How can businesses operate in the cloud?
Despite being digital natives and meant to work in the cloud, even SaaS companies have difficulty navigating the cloud. It is always about deciding whether they should build from scratch or purchase a product. As a result, teams typically get stuck in technical debt. So, how can companies, even those in the tech sector, operate in the cloud?
SaaS platforms are native to the cloud. We typically call them digital natives because they were built and formed and designed to live in the cloud. Yet, even digital natives struggle from time to time with just that. Do we build something, or do we buy something? Do we get something off the shelf or build it from scratch? And when we think about elements like technical debt, whether you buy it or build it, you’re going to encounter technical debt. You mentioned, “Hey, if we build this or buy it, one way or the other, we’re going to be stuck with this.” Everyone deals with that. They’re always putting something in place, and then we’ll call it “stuck with it.”
Find the Right API Structure and Avoid Technical Debt
APIs allow companies to be more agile, especially when they want to make a change. Chris believes that if you have the right API structure in place, you can plug and play different technologies, in theory. Regardless of your decision, whether you’ll buy, or build, here are some steps you can take to avoid technical debt.
If you have the right API structure in place, then, in theory, you can plug and play different technologies without disrupting your primary application or experience that users are looking at. Just because you decide to either build it or buy it, the key here is to understand that you are making the right decisions. So that whatever direction you go, you’re not stuck into some type of technical debt that you can’t maneuver out of.
Step # 1: Check the Team’s Culture and Mindset
Changing to the cloud is a significant venture, but you may encounter challenges if your team has reservations, hesitations, and concerns. There will always be objections, even if you have digital native team members onboard. Most organizations are concerned about safety. It’s vital to get everybody on the same page about the program’s goals and how it can help achieve your team’s objectives. Ensure your culture and team mindset are ready to adapt to the changes the digital transformation will require.
If you were to ask a lot of people, “Why are you not moving to the cloud?” or “What is one of your biggest fears for moving to the cloud”? Probably the number one answer is going to be security. It’s not safe. It’s not as secure if we were to do it ourselves inside our data centers and manage it the way we want to manage it. Quite honestly, that is completely and totally false. But that’s a mindset. Shifting that culture towards “We are moving to digital, we are moving to the cloud” has to be one of your main priorities. Because if you got a bunch of people within your organization who are fearful of doing it, then they’re going to set up those roadblocks. They’re going to make it very challenging. And it’s going to be a struggle to do what’s best for the company.
Step #2: Don’t treat it as a project; treat it as a program
When shifting to the cloud, teams often form project committees. It tends to be set up like a project, thinking it is a one-time thing. Some even prepare budgets and plans, thinking they are done once the project launches. Chris suggested setting it up like a program, just as you create an HR department and marketing department. Maintaining and continuing digital transformation is essential after it’s launched. This requires updating and upgrading like other departments. As opposed to seeing it as a one-time thing, consider it an ongoing aspect of your business.
It’s not a project. It’s not a one-time thing, and we’re done. This ongoing exercise has to be continually managed like a program. So, you can fill in the blank here. It could be a digital transformation program. It can be an innovation program. It can be a cloud program. Whatever you choose it to be. It has to be something that’s ongoing and sustainable. Because the moment you start to think, “But we’re just doing this one time.” Then, you’re not making that maturity leap from a business to a digital native.
Step # 3: Understand the Required Investment
Like any program, digital transformation requires investment. Financial understanding is crucial to the success and impacts this program will make. It is so crucial that there’s a whole new process called financial operations closely tied in with DevOp. The FinOps team needs to understand the ebb and flow of the data to procure the right bandwidth required to support the program. It’ll be the FinOps’ responsibility to scale the cost up or down based on what’s efficient for the team’s usage. Part of setting the right mindset is having a FinOps expert onboard.
Again, think about the ups and downs of any type of transaction or any type of network traffic that you might sustain. You’re going to need more cloud power computing, power technology in place to support that bandwidth. At the same time, we’ll say, in the middle of March, that might dramatically decrease. How do you understand the financial impact to the organization when you have those ebbs and flows of bandwidth that are coming and going throughout the year? This FinOps practice is designed to help you make financial decisions and account for its cost as it’s happening in real-time.
Step # 4: Scale and Go Multi-Cloud
Setting the right mindset includes not confining your digital transformation program to one provider. Businesses that are digitally native understand that they need to take advantage of the multi-cloud environment to be competitive. How does it help your team?
- It improves your security.
- It increases your scalability.
- Opportunity to deliver the elements your customers are looking for.
We all communicate very easily with each other through other technologies like APIs and integration. This is not a proprietary type of technology back 20 years ago. If you decided to go with one technology, you were stuck with that technology. That’s not how things operate today. So, the benefit of going multi-cloud is to increase your security, increase your scalability, increase your opportunity to deliver elements that your customers are looking for.
Step # 5: Use Your Data Wisely and Take Advantage of APIs
There are numerous ways that teams can look at marketplaces. The Google marketplace allows you to build a code and deploy that code. You can even choose to deploy that code internally, externally, and you can sell that code. There are countless opportunities for your codes. Through things like APIs, teams can access mechanisms by which you can build and then monetize.
That way, we have businesses that are out there generating $50 million a year just by selling APIs. Nothing else, and they’re not even building anything except for the APIs. Right? So, there are massive opportunities and just what we call digital marketplaces and building ecosystems. Again, one of the benefits of living in the cloud is that it opens up new opportunities to connect with other businesses, even connect with competitors. Like, we just talked about in multi-cloud. We engage with other cloud providers on a daily basis. Why? Because we know it helps our customers. With that mindset, you could put anything you want out there in the marketplace and sell it because that’s what people are looking for.
Everything now happens on the cloud
It’s all on the cloud— your phone, smart TV, car, the research on Covid-19, the search for the cure of cancer. When you think of all the behind-the-scenes that facilitate the sharing and processing this information, all of those get monetized somewhere.
Everything we do right now is connected in some way. Smart cars, smartphones, and they’re only going to get smarter. So, if any of you’re using your phone to start your car and turn on the heater before you get there, there are applications that are allowing you to do that. The weather right now is primarily all data that are living out there somewhere in the cloud. If you use a smart device, and you say “Okay, I’m not going to say it because I got Google devices back here. “What’s the weather today?” It’s going out and capturing that data and sharing it. And all of that behind the scenes is being monetized in some way.
API Creating Really Awesome Experiences
An API is nothing more than an interface that is connecting applications together and sharing data. That’s what it’s doing. As the data gets larger and API has become more complex than machine learning is increasing, then, it’s creating these really awesome consumer experiences and insights on how to help grow our business because we can better understand the data today. We can better visualize the data today.
Chris Hood Recommends These Resources on FinOps
- Principles of Cloud Cost Optimization by Google