Applications are the “new battleground” as companies continue to embark on digital transformation projects. That’s according to Mark Iles, executive consultant and industry analyst for Tech Research Australia, who spoke at a recent Computerworld and AppDynamics Breakfast Exchange.
“We find ourselves in the third phase of cloud, where you re-architect applications and look at specific end-to-end solutions,” Iles told attendees at the breakfast gathering in Sydney,
“And finally, in really tangible terms in applications, we’re seeing customers move from taking workloads and moving them to the cloud, to actually thinking about, how do I re-architect and what applications do I need to operate in a cloud world?
“It is no longer a lift and shift approach, where I pick it up and drop it over, but actually a more thoughtful approach on how you start to re-architect applications for this type of environment.”
Iles said the majority of companies embarking on digital transformation today are either heavily focused on “creating real disruption and a brand new business model” or on customer experience (focusing on the endpoint customers to identify where the transformation is coming).
“What underpins all of this is around internal or digital readiness. In order to do this, you need the platforms to create the transformation. This includes things like collaboration, automation, people and culture, and also infrastructure and things like agile, devops and microservices. These are the building blocks that enable the transformation.”
He touched on key trends sweeping the market, and what matters most to CIOs and heads of tech leading the digital transformation charge across the country.
“We call it cloud-first, but we call it Part 2. Everybody had a cloud first strategy initially. Now that is becoming a lot more selective. What we’re actually seeing is a DNA-driven approach, which is customers now saying, ‘It is not a cloud-first strategy anymore; it is a DNA-driven - a workload-by-workload, case-by-case basis. Where are we going to place the workloads and how are we going to do that? We’re not necessarily seeing a pull away from cloud, but perhaps a more balanced view of how to approach cloud.”
Digging deeper, Iles said tech leaders today need to determine how to differentiate from the crowd in a world that’s collectively moving towards the cloud - and application integration is the way to go.
“The playing field has shifted in terms of differentiating companies. If I move things across to the public cloud, the playing field is completely level. You’re actually all operating at baseline zero, so if that’s the case, how do you now differentiate? And again, this becomes the challenge.”
He noted the average number of applications sitting inside enterprises over 1,000 seats is typically around 1,000.
“When you get your head around 1,000 applications that you have to do something with, plus the backlog of new applications coming through, this is why applications are the new battleground. It is both an opportunity and a challenge.”
It’s no longer about being in the cloud but how to best use it, he said, explaining there is a pressing need to look to other areas, especially cloud applications, to achieve competitive differentiation
Additionally, he said companies must also consider taking an agile and DevOps-based approach. His research shows the vast majority of medium and large businesses in Australia have already started to implement DevOps practices (80 per cent).
“We’re very much on this journey towards an agile and DevOps approach. And with the types of projects and transformation that we want to do, it is an essential building block in order to enable these kinds of processes. You have to get faster and more agile at what you’re doing in order to deliver the projects that businesses want these days,” he said.
“Meeting demand for customers, improved agility, competitive position, deployment frequency - those are some agile/DevOps benefits. And thinking about this constant iterative process as part of your development cycle is a fundamental building block to change and transformation. You can’t do it with a traditional waterfall approach and a traditional project management and governance approach. It doesn’t work.”
And as “digital meets DevOps,” he suggested companies need to consider three things including: configuration management, which is infrastructure as code. “This is all about automation, everything from the build, management and release of applications needs to be fully automated.”
The second area to watch is application scaling. “This is around real-time infrastructure and elastic scaling. You have to do this at an application level and not at a work level. And this is where it becomes a real challenge in terms of how you automate.”
The final area to track, he said, is in application insight. “When something goes wrong, you need to be able to understand what is happening. . . There are so many components now, and the challenge is this just gets more and more complex over time.”
Additionally, Iles had some specific advice for achieving success with digital endeavours, which he said involves exploring a company's ‘digital readiness’ in terms of platforms. “You have to be better at devops. You have to have advanced toolsets and you have to have automation. You can’t do it without any of these building blocks. You won’t get it done. And if you’re going to move quickly, everything else has to fall in line underneath it,” he said.
“All digital endeavours are cultural ones - you will need the right culture, and typically we’ve found that it’s much better led when led right from the top [CEO level].”
The skills gap
Meanwhile, on the skills front, Iles said there’s a significant skills shortage, from a digital skills and specialist skills standpoint, both in Australia and globally.
“There is a skills shortage in many organisations with internal shortfalls in areas such as application security, management and analytics,” he said, explaining application integration is another key skills issue for both partners and business alike.
He explained there’s a shortage of enterprise architects, security architects, cloud architects and devops workers, as well as people that can code with microservices.
“Over the next four to five years, integration is going to be one of the most complicated areas of IT,” he said, explaining if you make a change in one area it cascades across all other applications. “How do you track that and how do you keep control of how these different systems work?”
He suggested companies seek out new partners - including today’s gamut of entrepreneurial start-ups or even universities - in order to address the skills shortage conundrum.
“We would encourage customers to think differently about how they create partnerships, and how they start to think about delivering IT systems, rather than just doing it internally. It is tremendously difficult to have the right skills on staff, especially in these new areas, and if you want to do things that are cutting edge, you need to find the skills.”
AppDynamics APAC CTO and director of technical services Mykhaylo Shaforostov, told attendees how the industry is shifting towards user and business-aware applications and infrastructure.
“I’m seeing new patterns and innovation in this space,” Shaforostov said, referring to the exciting rise of mobile applications and strategies. “While there’s a lot of innovation in this space, the reality is that the next-generation, the next wave, is actually multiplying the number of devices that we’re going to have to support and work with.”
As such, he said modern IT organisations have to become more nimble in reacting to business trends - given the growing number of interconnected devices and shifting user expectations towards the engagement experience.
“As many devices grow in the front end, what happens in the backend?”
Certainly, CIOs are tasked with ensuring the IT infrastructure grows with the demand, and need to be on top of the API discussion, he explained.
“On the IT side of things, there are more APIs. There’s a big movement right now within the Australian market to develop publicly facing APIs. That is great. You can split all of these functionalities into smaller pieces, which is fantastic. But what happens then? How do you know which API is used the most?
“One of the toughest questions that banks are trying to answer is, ‘I am investing in all of these API breakouts, which one is going to be the one I have to put more infrastructure in front? And who’s using them and why? Why am I investing in all of these resources? So understanding how the APIs are being used is going to become a very important part of this.”
Additionally, he said there’s a massive shift towards containerisation. “APIs are being broken apart, complex structures are being broken apart. Everything is becoming smaller, nimbler, faster on the backend.”
And at the centre of every digital transformation, he noted, are the applications.
“This is my world. This is what I get excited about. You have end users with more devices, a lot of complexity there. You have IT doing the same thing and the business. There are three different directions you are being pulled. But at the centre of it all are the applications. Applications are what drives all of these components, and whether you shift more towards the business, or shift more towards the consumer, you are still going to be talking about an application, or many types of applications.”
Therefore, understanding how the applications are being used and the value they provide to the business is crucial, he noted.
“In today’s world, you have multiple components, distributed architectures, and containerisation - so to understand how everything is working, at a base level, you need to understand the transaction. But transaction understanding is table stakes today - what you really need to be able to understand is how many of these transactions correlate to each other,” he said, explaining a layer of analytics is essential in order to understand user behaviour and patterns.