As of today, the economic implications of COVID-19 are felt very palpably all over the world. While China maintains an optimistic position, business confidence in many other Asia Pacific countries has declined. US firms are some of the hardest-hit despite signs of state lockdowns ending soon, while buyer intent is also slightly down in Europe despite market indicators being mostly stable.

With businesses reeling from the pressures of the pandemic, austerity measures are being applied by many companies that have resulted in a dramatic decline in IT spending in 2020. Such decline is happening globally in spite of the growing need to adopt digital solutions to address present business problems. More than ever, business leaders need to rethink their current IT strategy — to put their focus on building up resiliency and digital capabilities to meet the new norm of operating and working.

As such, Hewlett Packard Enterprise (HPE) in partnership with Intel, held a webinar with e27 aptly titled, “Transforming IT Strategy to Drive Profitable Growth for cloud-native Companies”. The event’s goal is to help impart crucial information regarding technology-led priorities for 2020 and 2021 where the right mix of hybrid cloud adoption is seen as a key catalyst.

Avneesh Saxena, IDC Group Vice President for Domain Research Group APAC, mentioned in his keynote speech that “cloud was always important, but COVID-19 has kind of spiraled into this platform where everybody is looking at cloud as the biggest factor in how they can get on with some of their applications and migration plans faster into cloud.”

An important note Saxena also pointed out is that when it comes to choosing cloud, the choice is not between public or private. Enterprises will buy the best cloud for their workload, which means an enterprise will likely choose to use a hybrid combination of both. It is through this amalgamation that enterprises can interconnect between different applications, access more customers, and ultimately create more synergy.

According to IDC’s COVID-19 data on the behavior of enterprises, the primary drivers for cloud migration are improved performance, enhanced security, lower costs, and improved availability, among others.

When it comes to leveraging technology to transition to the next normal, Saxena explained that the goal is to flatten the curve for APAC companies to persevere through various economic blows brought about by recessions, economic slowdowns, and global health crises such as the case with COVID-19 —to ultimately return to growth and allow a seamless transition to the next normal.

Reverse migration to on-premise private cloud

In an audio recording, Rob Clark of HPE discussed the Dropbox model that saw a reverse migration to an on-premise private cloud after many years of using a public cloud environment. Clark explained that one of the challenges Dropbox encountered while sitting on a public cloud was explosive growth. In a matter of eight years, the amount of users using their platform grew three folds, ballooning to over 600 million users.

As they grew, the public cloud model became increasingly confined. This rendered Dropbox to become extremely dependent on their public cloud provider, forcing them to contend with an unfeasibly high-cost structure. Because the company was aiming to capture more B2B customers, they needed a robust new IT hardware infrastructure with greater scalability and flexibility.

Such a transition not only meant capturing a larger B2B audience, but also keeping the existing B2C users. To do this, Dropbox needed to build a cloud environment that supported both personal and enterprise use cases.

By migrating to an on-premise private cloud environment through HPE, Dropbox was able to meet these objectives. Furthermore, they were able to retain flexibility, accelerate enterprise-level security and scalability, drive down costs, render those costs more predictable, and reduce the cost per gigabyte to support higher ROI.

These benefits were earned through a complex combination of advanced engineering where enterprises can customise their build to meet their application needs, access a global supply chain, and global support from HPE.

Government regulations as a factor in cloud strategy

During the fireside chat, the distinguished experts shared insights about strategising one’s IT infrastructure to accommodate certain shifts in the market, innovate one’s

system without sacrificing compliance regulations, and ultimately respond to different challenges.

Norman Sasono, CTO of DANA Indonesia, explained that due to their specific business model, the company is governed by the Central Bank (Bank of Indonesia) which means there are very strict government regulations in how they operate, including in the IT space. As such, the company is strictly mandated to use only an on-premise system designed to accommodate their data centers.

DANA Indonesia is a tech startup working in the fintech space founded three years ago. The company boasts more than 40 million users in Indonesia alone and records as much as 3 million transactions per day. With the user base constantly expanding, much of DANA’s business model relies largely on its IT infrastructure.

This means it is also particularly challenging for them to adjust to spikes in their system workload when their operations are confined exclusively to an on-premise system.

“The strategy is to continue with the hybrid cloud, to always maintain the high-performance security and scalability to really deliver the best user experience for our users,” said Sasono as he explained what strategy DANA Indonesia is gearing towards as the company seeks to grow their number of users to 100 million in the future.

He added that for core payments, the IT infrastructure and workload still needs to be hosted on-premise, and that what they’re looking to explore, are ways to be more efficient in terms of running operations and managing their own infrastructures.

The IT strategy playbook

Across the spectrum, the IT strategies being deployed in the startup ecosystem are dynamic and continuously evolving. Moreover, they continue to evolve along the life cycle of the companies. Sandeep Kapoor, Senior Director and GM of HPE’s Hybrid IT Compute, discussed that in the context of what’s happening right now from the perspective of a pandemic, the IT strategy playbook has morphed into something very different.

“If you asked me a question three months ago, the answers would be a lot different. The most fundamental change in the equation is in addition to the speed, the scale, the latency, and the availability, the one aspect that COVID-19 has put on the discussion table is how investors look at startup companies and wonder how they can get profitable returns,” Kapoor remarked, adding that “this was not the situation three to four months ago where the investment community was investing to build scale and build size.”

He furthered this statement by saying, “our experience tells us that the world is going to be ‘hybrid’ and that cloud is going to be a journey, not a destination.” By this, the next decade is going to be more anchored on how they provide an experience for users to move seamlessly between different clouds.

There are three elements that play critical roles in building the right hybrid cloud model:

1.) Technology — making sure that the provider or the partner of that space is able to have the best technology that encompasses cutting edge hardware and software capabilities, and all the building blocks needed for the right infrastructure.
2.) Economics — how one delivers the right economics so they’re not just wasting a lot of money, given how the IT infrastructure is utilised during the surges and dips of a company’s profit (e.g. to be able to provision capacities when they’re needed, and to not have to spend so much for those capacities when workloads are low).
3.) People — you can have the best class of products and services, and even develop the most sophisticated charging mechanisms, but if your workforce is not equipped with the right set of skills that match the rest of the business infrastructure, the company’s objectives will still be difficult to meet.

HPE has the capability to provide these elements through their proven solutions and team of experts.

The best of both worlds

Simranjit Aujla, Distinguished Technologist of HPE’s Pointnext Advisory Services, explained that enterprises need hybrid cloud to deliver agile and efficient foundation for their digital program. To achieve this, companies need to make a complete assessment of their applications portfolio, to understand their customers and what kind of performance to provide them, and of course, to understand the economic aspects.

Aujla said that enterprises need to ask themselves the question, “what does it cost for me to run what workload, and on what environment?”

He also stressed out the need to think about security, how important it is, and the kind of control a business wants to have over the system. With all of these factors put together as a company grows and scales, they ultimately help businesses decide how to move to cloud.

Some of the benefits that come with a hybrid cloud solution are visibility, security, and control across clouds. Moreover, this kind of IT infrastructure allows real-time tracking, metering, and usage. The flexibility of this environment also means it’s more automated, programmable, and consumable, and allows companies to adapt to economic shifts due to its pay-per-use consumption on-premise, allowing companies the freedom to create, iterate, flex, and scale at speed with the controls in place.

HPE GreenLake

In order to understand a company’s IT strategy, we have to contextualise the pros and cons of cloud models. Today, companies who subscribe to public cloud enjoy the element of on-demand pricing, yet they are compromising their controls, and to a certain extent, their security.

HPE GreenLake provides an on-demand capacity in its pricing model which caters to a cloud-like experience. Most companies are stranded in a loop of overspending for their capacity provisions, or having to wait three months or longer in order to enjoy new capacities buffered by their growing workload.

HPE addresses this by providing a certain base-level capacity as well as a threshold which will ensure that a company’s cloud spending will operate on a pay-per-use basis. During the webinar’s fireside chat, Aujla explained that “HPE ensures that you are able to provision extra compute and storage while at the same time, you only pay for what you use.”

HPE GreenLake is the mechanics to which HPE provides this consumption-based approach to ensure that companies can enjoy the economics of a public cloud in a private environment, and also help companies plan their journey in terms of their workloads, security, performance, as well as the scalability that they require to run their businesses effectively.

Based on where a company is in their cloud journey and on their area of interest, HPE can come in to help them create a plan for the present and a roadmap for the future where the migration strategy will come into the picture.

Moving forward

It makes the most sense for some workloads to be on-premise, while other workloads that are non-critical can be hosted on a public cloud. The decision to get there, however, is a scientific process that HPE has the advisory capabilities to provide.

In many cases, this decision is derived based on a company’s cloud maturity cycle especially when they scale not only in terms of accommodating more customers, but also capturing customers beyond their current demographic. Much of the decision to adopt an IT strategy or to migrate to a new one can be addressed by what is called a “Proof of Concept” where companies can diagnose and identify where they are in their business journeys. HPE can step in and help companies go through this and provide a step-by-step guide on how the IT requirements should take shape.

The question then becomes: are my costs going to spike? Will I have to pay three or four times more for my workload when my business scales up?

Kapoor said that the answer is a resounding no. “You basically have with HPE GreenLake what [Simranjit Aujla] describes as a ‘consumption model’ which basically means you’re charging IT costs based on what you consume. It’s comparable to when you pay for electricity or water as you consume. You are paying for some amount for a fixed commitment and the rest could be variable.”

Kapoor encourages startups to engage HPE GreenLake and see for themselves how the company can help them build something meaningful together. To find out more, the fireside chat section of the live webinar is available on the HPE website.

If you’re interested in taking part in an HPE workshop, you may take this quick survey to let us know. The first 20 respondents stand to win exciting token premiums from HPE.

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This article is produced by the e27 team, sponsored by 
HPE.

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