Michael Dembinski: What's the difference between digital disruption and digital transformation? Stephan Bienek: There's a negative and a positive element to both. Disruption changes entire business models, it overturns existing hierarchies, it dethrones dominant players, allowing upstarts to come from nowhere are become the new market leader. Transformation is when businesses can use digital tools to develop new ways of getting to their clients.
MD: What's the biggest obstacle in the way of digital transformation – is it cultural, or technical? SB: Technically, it's the legacy issue. Many successful corporations are based around an IT platform that's a decade or so old, and getting older by the day. Replacing it with new platform is a huge project that's expensive and risky. But then doing it piecemeal – patching things as they break – is also risky. Doing nothing means you lose ground to your competition.
Adam Pytlik: Every firm wants to be able to do things cheaper, faster, better and smarter. The old solution was a mega-project, typically purchased from one IT integrator. This could be an enterprise resource planning (ERP) system, such as SAP or Oracle. These proprietary systems, while robust and able to support most business functions, can hold back companies from making those bold, disruptive steps that can create new value.
SB: Today's approach is more agile, based around cooperation with start-ups that offer solutions to corporate problems, or else developed in-house with employees bringing their own devices (BYOD), or by using 'shadow IT' whereby employees use external IT service provides (such as WordPress for example). Younger IT employees are said to be 'cloud native', never having had to work on mainframe or stand-alone PC servers. For them, software-as-a-service and indeed infrastructure-as-a-service is the way to go, not being stuck with a mainframe-based legacy system.
AP: For employers, there's a balance to be struck between 'faster' and 'safer'. Doing things the old way is safer; it's compliant with regulations (such as the new GDPR), but such businesses run the risk of being overtaken by competitors with a more agile approach.
SB: “Faster vs safer – it's all about getting the balance right. Today, firms at the leading edge are continually improving their customer experience, their employee experience. The iterative approach means you never end up with a final product, it has to be made better and better all the time. We talk about Mode 1 companies, which are steady and safe in their approach, and approach IT projects in a top-down way, and Mode 2 companies which are agile and fast, ready to move quickly into new market opportunities and have a bottom-up approach . Mode 1 companies can lose out to to the Mode 2 companies. Mode 1 and Mode 2 approaches have risks, but they are different. Mode 1 risks are getting it massively wrong – the platform is not fit for purpose, massive cost overruns, delays. Mode 2 risks are more to do with compliance – a more anarchic approach can lead to problems with the regulator, or security breaches. With GDPR coming up soon, the risks associated with personal data can be very dangerous for companies with an over-flexible approach to IT development.
MD: Is there an optimal way of getting this balance right? Safe and stable plus fast and agile at the same time?
AP: This is what Interoute offers. The hybrid cloud allows for companies to mix Mode 1 and Mode 2 approaches. This calls for a blended approach that can integrate the new approach with legacy systems; the best way is in the cloud with all the security that cloud computing offers, at the same time a cloud that offers interoperability between platforms, architectures and systems.
MD: Consumers today are highly aware of the quality of their experience when interfacing with businesses online, be it shops, airlines or banks. The user experience/user interface (UX/UI) is a key competitive differentiator. Get it wrong, and your customers will switch to a rival with a better interface. With the growth of artificial intelligence (AI), it's likely that UX/UI customisation will develop, based on the user's IT skills, age, eyesight, aesthetic preferences, with interfaces tailoring themselves to suit the individual user. This will become increasingly important with an ageing demographic; online banking or buying airline tickets online can be confusing to elderly people especially if ever-changing user interfaces make the process unfamiliar and challenging. On the other hand, security is essential. Again, getting the balance right is key.
SB: Customers are telling businesses what they'll want tomorrow; businesses should be able to deliver it, and quickly. However, if they are over-agile, with heavy usage of their own devices and shadow IT, firms may run foul of data privacy and security compliance. The solution is to integrate cloud and non-cloud based services.
MD: There's also a balance to be struck between short-term profit, boosting the numbers every quarter, satisfying the increasingly demanding shareholders, with long-term sustainability.
AP: The key is competitiveness. In an economy that's become totally dependent on IT, the answer lies in a hybrid cloud-based solution that can deal with data from new platforms, legacy systems and external servers. At Interoute, we can integrate solutions from Sage, Google, Adobe, Microsoft Office and SAP or Oracle through the cloud – this is the best way. Interoperability is key.
SB: It makes sense to outsource your data to the cloud in cases where there's no differentiation between you and your competitors in that data; if it's generic data – such as payroll, customer records etc – then it makes sense to have it hosted by people who can do that better than you. If it's proprietary data that is intellectual property, companies like to hold it as close to themselves as possible.
We talk about hosting servers and data centres. AP: Did you know that between 60% and 70% of the energy used in a data centre goes on cooling? Some of the larger ones use 10MW/h of electricity. Cloud computing is about economy of scale; the computing needs of business will grow massively as AI and technologies such as augmented reality become commonplace.
As we sat discussing the future of the cloud, Mr Pytlik receives the news from HQ that Interoute has just connected the Vatican's new portal. A sign from above – cloud computing at the next level!
GTT Completes Acquisition of Interoute
MCLEAN, Va., May 31, 2018 — GTT Communications, Inc. (NYSE: GTT), the leading global cloud networking provider to multinational clients, announced today the completion of its acquisition of Interoute, operator of one of Europe’s largest independent fiber networks.
“The acquisition of Interoute represents a major milestone in delivering on our purpose of connecting people across organizations, around the world and to every application in the cloud,” said Rick Calder, GTT president and CEO. “Our enhanced scale, expanded network footprint and award-winning product capabilities reinforce our position as a global leader in cloud networking. We look forward to bringing the benefits of this acquisition to our valued clients across the world.”
The addition of Interoute:
Significantly augments scale, expanding GTT’s Tier 1 global IP network with one of Europe’s most extensive fiber footprints;
Creates the most comprehensive and competitive global cloud networking platform in the industry;
Adds a large base of marquee multinational clients, balanced across geographies and verticals, with very high levels of recurring revenue;
Strengthens GTT’s leadership in software-defined wide area networking (SD-WAN); and
Enhances GTT’s global team with a world-class sales, operations and customer service organization.
GTT expects to complete the integration of Interoute within three to four quarters after closing.
GTT is redefining global communications to serve a cloud-based future, connecting people across organizations, around the world and to every application in the cloud. Our clients benefit from an outstanding service experience built on our core values of simplicity, speed and agility. A Fortune Future 50 company, GTT owns and operates a global Tier 1 internet network and provides a comprehensive suite of cloud networking services to any location in the world. For more information on GTT, please visit www.gtt.net