Time to build tech on the automobile, not the horse and cart

Technology and automation have cut through countless roadblocks in our lives, and once-complicated processes are now seamless.

The way we access information, pay bills, communicate, and conduct our daily lives is changing – turning into quick automated processes we can complete in a few clicks.

ANZ and global businesses have long recognised this and sought to leverage technology to gain a competitive advantage and increase efficiency. Enter the term 'digital transformation' or 'DX', an overused and overhyped phrase that has been the centre of boardroom discussions for years now.

But the reality of digital transformation – coloured by endless marketing rhetoric filled with buzzwords like disruption, agility and ecosystems – has not lived up to the promise.

For most businesses, technology and IT are still centres of cost, not profit. While many have basic digital services, they tend to avoid complex services, such as machine learning and data analytics, due to the constrain they might place on existing resources and fear of changing.

Research from Microsoft highlighted one of the top barriers to digital transformation in Australia is organisations' ability to 'transform their businesses' to take advantage of the opportunities digitalisation represents.

The truth is IT teams spend more time keeping basic services alive than developing the kinds of services that can truly add business value.

This begs the question – why are we being held back?

The horse and cart issue

I believe one of the core problems of businesses struggling to digitally 'transform' lies in the infrastructure they use, the data center.

Most businesses still use three-tier architecture – a type of IT infrastructure that separates the basic functions of IT businesses need: storage, networking and compute. This is the horse and cart. It was revolutionary when first conceived, but it requires high levels of care and maintenance, and is no longer practical at a time when expectations from technology are so much higher.

Just as you needed someone to manage the horse, someone else to manage the cart, the stable, feeding, etc.; three-tier architecture requires specialist IT consultants or teams to manage its primary functions and basic digital services.

When you start adding new services to this mix, maintenance becomes even more complex. New infrastructure, servers, programs and more are often required.

Many organisations have introduced virtualisation and software-defined features that bring benefits in the short term, but the underlying issue remains. This is like if Tesla built its model on the horse and cart – it doesn't get you very far.

Cloud = the automobile

A few clever people spotted this underlying issue in the early 2000s and invented something known as cloud computing. Suddenly, we had a technology that was based on the automobile rather than the horse and cart.

Public cloud meant you didn't need to worry about the underlying infrastructure – it was managed from elsewhere and you connected to it through nothing more than the internet.

New digital services could be unlocked with a simple click, not unlike downloading an app to a smartphone.

Despite this, public cloud has failed to serve as a cure-all – and while it continues to grow, three-tier is still the norm for many businesses.

While the technology behind public cloud is revolutionary, the way it's designed and consumed presents major challenges for most businesses. One of the biggest is cost. Public cloud means renting, not buying. This is fine for new or temporary services, but unsustainable in the long run.

Running everything in a public cloud environment leads to huge costs, and suddenly the sticker shock is what restrains businesses from investing in digital transformation; rather than an inept IT environment.

Another issue with public cloud is compliance and data sovereignty, fresh on businesses' minds in a post-mandatory breach disclosure and GDPR and world. It's not always obvious where data is being stored and transported, which can mean security risks and failure to meet compliance standards for certain industries and organisations.

Meeting in the middle

Fortunately, there's a (relatively) new cloud in town – enterprise or private cloud.

Some of the same clever people behind the public cloud movement have spotted that you can create that same environment under businesses' own roofs, removing the costly over-renting model and compliance and data sovereignty concerns.

Better yet, you can now combine public and enterprise cloud and extract the best of both worlds – this is called hybrid cloud. You may have heard the term before, but it has until recently meant you keep one lot of services in the public cloud, and one lot in an outdated, three-tier environment. Never the twain shall meet.

This is no longer the case. Businesses can go all cloud and transfer applications and services between public and private cloud environments with the same 'one-click' simplicity we've become accustomed to through the consumerisation of technology.

The experience remains in line with that of the more-familiar public cloud, but with cost and compliance issues minimalised and complete avoidance of the three-tier 'keep adding until it collapses' model.

This means you can own a car that services most of your needs – enterprise cloud. But if you need to try a new external service, head off-road or bring a few extra passengers on board, you can rent a more suitable vehicle for those specific journeys – public cloud.

Businesses stuck either in a three-tier or public-cloud-only world are the ones struggling to marry digital transformation goals with reality. Cloud is the answer, but it needs a fresh coat of paint.