CTO Daily Dose - Buy vs build innovation to power Digital Transformation
Transcript
hey how's it going Keith Townsend from the CTL visor Kyle with today's daily dose I think I can need coffee for this one because it's a you know what it is truly a c-level topic today in which we're talking about innovation and enterprise IT making that digital transformation and funding it so this is not anything new in an enterprise from a challenge perspective we spend 80 percent of our budget on keeping the lights on and twenty percent of our budget on actual innovation so as a
recap this is again not a new challenge over the decades of managing Enterprise IT this goes and stuff like software licensing hardware maintenance and operations from a people perspective whether it's application developers doing brake fix or DBAs doing database maintenance a great deal of our IT budget goes to keeping the lights on expanding storage arrays servicing help desk calls etc just you know the business of doing IT and then from an innovation perspective we spend 20% of our budget on net new projects this is where
the digital transformation has to happen so a lot of the times we look throw cloud in here rather and a lot of times the way we implement cloud is actually just keeping the lights on we lift this ship stuff that we're doing in our private data center to the cloud we call that innovation we'll get into whether or not that's truly innovative but also things like you know rolling out micro services or self-service portals or the you know where AI and Sheen learning are truly innovative
activities that were undertaking to support the digital transformation I had a really interesting conversation with a large enterprise vendor the Regional Sales Director there and talking through the challenges they're facing when they're having this conversation with enterprise IT we have a basic question we need to ex are we going to buy innovation I go to Dale EMC HPE the Lenovo IBM Accenture DXE etc and by the innovation I outsource the the smart parts of innovation to those folks are we going to fund that ourselves and
create that value within ourselves are we going to hire developers are we going to take open-source bits and put our own IP to it to differentiate us from our competition this is not an easy decision because most of us are not in the business of technology technology is not our core skill set so we go back to the 80s and 90s of this bill versus by mentality do we build our ERP system or do we buy one from s AP PeopleSoft Oracle etc we need to
answer this question so some of the things I've seen in the field is that people get really hung up on how do we optimize this 80% so that we can put 20% of our budget so we can you know maybe change this to the 75 percent or 70 percent and put 30 percent of our budget towards innovation so that we free up resources to innovate we're pretty good at that we're pretty good at optimizing we all find stuff like you know MPLS searches for app for
enterprise application hosting will outsource it will also support to a managed service provider etc will find optimizations to free up budget but what we fail to think about is once we have the budget what's truly innovative is it innovative to take a si P I like to pick on sa P move it from a on-prem solution to the cloud have we really enabled the business to do more with that technology or have we just optimized for cost and support or is it more innovative to take
something like a Fiore which is their mobile type platform and framework to create a mobile app and when we create that mobile app do we outsource the development of that to a offshore team or even a application development house or do we hire the staff to create the application we free up funds without actually thinking through what's innovative from a data center perspective do we free up resources in a data center so that we can implement kubernetes and if we're going to implement kubernetes do we
go and buy that Cooper neti solution from a vendor such as Red Hat with their open shift solution or do we take those bits in create and hire developers to innovate this is not a easy question to answer it's not as simple as one or the other the market for this is extremely immature I wrote a piece over on the CTO advisor comm examining VMware's position in the industry and what I'm not they falling behind and the answer to that question is I'll say no because
falling behind who who exactly is innovating from an enterprise application perspective outside of VMware daily MC hped xee the essentially the list goes on and on and on and on no one's really stood out and said that we've made this digital transformation thing easy we've taken server virtualization in the case of what VMware has done in the fist take something that's difficult to server virtualization make it so easy that you can self train them do it on your own that's not where micro services containers take
your you know infrastructure is cold all these things that are these buzzwords have not been product ties to the point that there's that a shrink wrap herbal and can be delivered and in a mass market so we're at that point that we want to innovate we want to be the engine of digital transformation we have to ask ourselves do we want to go at the speed of our vendors taking less risk but having the resources the technical resources of our vendors or do we want to
sell fondest and self innovate well we take that 10 percent say means that we're getting from that keeping the lights on plowed into true innovation and take the risk of building these solutions and differentiating on our own tough question that's why an enterprise IT we get paid to big bucks will continue talking about these topics at vmworld and beyond join me at vmworld if you're there if you're not follow me on the Twitter's I will be tweeting a lot at CTO visor about VMware I'll do
multiple daily doses I'll be on the cube which you can find ww silica angle TV com well I'll interview executives from HPE VMware asking these very questions about how they add value to companies looking to digitally transform versus companies themselves needing to undertake that effort on their own and of course you can find me on the web the CTO advisor com where you'll find the blog in the podcast toffee guy's next CTO visor daily dose
