The Cloud Ecosystem: A Guide for CIOs

Zia Yusuf: I am the senior vice president for Strategic Ecosystem and Industry Solutions here at VMware.

What is the cloud ecosystem?

Michael Krigsman: That's Zia Yusuf from VMware. He'll explain the cloud ecosystem, why it's important, and what it means for you.

Zia Yusuf: I use the word ecosystem in a very organic way, like a spider's web where no single strand in the web is that strong. But when you put it all together, it can be a very effective offensive and defense capability.

When we talk about (or at least when VMware talks about) architecting the ecosystem, you're talking about those three-way or even four-way relationships as you look at that full map of capabilities that a customer may want to engage with.

It could be a hyperscaler. Obviously, VMware. It could be a GSI. It could be an ISV in there, some vertical capabilities.

Interacting with that integrated ecosystem and being thoughtful and deliberate on how you architect this, that's the ecosystem piece of it. Or at least that's the way we think about it.

If you take the cloud piece of it, I would say ecosystems have been evolving through many different technology iterations. Here you're talking about a much deeper and much more prolonged engagement with our customers.

On-demand software, cloud software is deeply embedded into the infrastructure. The reliance on cloud software is very different.

Then, of course, you get into things like customer success. It's not just about selling it upfront. It's about ongoing opportunities, challenges, security.

How does the cloud ecosystem drive customer success?

Michael Krigsman: Is the ultimate purpose of that cloud ecosystem to enhance and develop the relationship with the customer? Would that be an accurate way to describe it?

Zia Yusuf: The goal is to make the customer successful. In order to make the customer successful (and the relationship will come from that, hopefully), it does require a 360-degree perspective.

There's a product piece to it. But even the product piece, Michael, obviously is not just one company.

You can be using VMware. You could be using AWS. You can be using Azure. There's a stack that comes with that. You have to integrate and optimize with the apps that sit on top of it. Then just that transformation of your on-premise apps to cloud apps.

We look at it as a multicloud journey, so it's on-premise, private cloud, multicloud, public cloud. Putting all of that together and putting our customers on a journey that is short, that provides impact, that's at a lower cost, that's the focus of that ecosystem. And the relationship hopefully gets built during that process.

What are the roles and responsibilities of cloud ecosystem participants?

Michael Krigsman: You've alluded to this, but can you define what are the roles or the elements that go into creating that ecosystem?

Zia Yusuf: There's obviously a series of product and software companies. But the interesting thing is that the role of those companies, unlike in the past, is no longer just "Give me the software."

Because of the way software is architected, the way the cloud infrastructure works, it's a monthly consumption, new innovations that are happening. I think the role of a traditional vendor of software and solutions has fundamentally changed.

When you look at vertical-specific ISVs, they are so important. I think the verticalization of cloud infrastructure is a very important topic as well. ISVs play an important role in providing application functionality that solves specific problems.

I think the roles have honestly evolved. Channel partners, their role is very different today than it was ten years ago in, again, an on-premise world.

Michael Krigsman: Zia, what is it about cloud computing that creates this need for such a strong, robust ecosystem (as you've just been describing)?

Zia Yusuf: First of all, by its nature, SaaS software, you have a much more intimate relationship on a daily basis, an hourly basis with the customers. They consume more. They consume less. They consume other pieces. They can switch it on. They can switch it off.

I think that first point necessitates a much deeper, much more of an integrated approach to supporting them. That's one thing.

Secondly, I think when you look at things like end-to-end and intrinsic security, with point number one comes point number two. There is a much higher need to protect the environment (both in the data center, on the edge, on devices). I think that security topic that permeates all of this again requires much more of an intimate, ongoing engagement.

Then the third piece of it is, as a customer seeks to stitch together a solution, those solutions (I would argue today) are more overlapping, more intertwined, if you will – and I'm using these words deliberately, right? – which is a benefit, but it can also create a lot of confusion and potentially cost.

There are a lot of benefits to cloud infrastructure and a lot of cost benefits and on-demand capabilities. But pulling that all together and making sure that it connects to your legacy infrastructure, to the apps that you have, that again requires a much more intimate and a more deliberate, ongoing engagement with your ecosystem.

All of this leads us to believe that when product and software companies deliver on their value proposition, it's not my products versus your products. It's not even my solution versus your solution. It's my ecosystem versus your ecosystem.

That's how we certainly look at it and are trying to execute on it. I think best-in-class companies, regardless of where they are in the stack, look at it from that perspective.

How is customer success different in the cloud from on-premise?

Michael Krigsman: Customer success then depends on the ecosystem being seamless and ultimately working relatively flawlessly through the interchange of data, applications, and so forth.

Zia Yusuf: Customer success, I think this is one of the big differences between the on-premise world and the cloud world where you can sell something. it doesn't get consumed. It gets switched off on January 31st and gets switched on again in March.

The only way you can influence and help a customer do that is by ensuring that they see business value. There is no way, Michael, to get that done without having an integrated, orchestrated, correctly incentivized, correctly enabled ecosystem.

Michael Krigsman: There are just too many players and too many moving parts, and there's no one vendor who is supplying everything. By definition, you have an ecosystem.

Zia Yusuf: You could argue that statement, which you're correct on, was still somewhat true 15 years ago. I would say there's more complexity in that, there are more connection points, and you don't always know where one stops and the other begins.

Potentially, there could be more points of failure because you're in a public cloud. If something goes down, it can have quite an impact.

What are the business impacts of multicloud and hybrid cloud solutions?

Michael Krigsman: Now, Zia, we hear the terms multicloud, hybrid cloud. Explain that and how does that layer onto this ecosystem concept that you've been talking about?

Zia Yusuf: There are basically three deployment options for a customer. They can have something on-premise, they can have something in a private cloud, or they can have something in a public cloud.

We strongly feel, and our research shows (and you can see this happening in the market), customers will take a hybrid cloud approach or a cloud smart approach, which is, in those three deployment options, which workloads, which applications, what do we need to put where.

Now some people would say multicloud. It could be multiple public clouds. You could have a customer with on-premise. They're running their own private cloud (potentially with VMware). They may have one or two public clouds. They may have some things on Azure. They may have some things on Google Cloud. They may have some things on AWS.

I think, for customers to really think through how to be cloud smart and where to put their applications, where to put their workloads, that's the hybrid cloud journey that folks need to be on.

Michael Krigsman: All of this is complicated enough, and yet there's so much marketing hype around multicloud and hybrid-cloud topics that I think it makes it even more difficult for people to really understand what's going on and especially what they should do.

Zia Yusuf: Public cloud deployments is going to continue to grow, and it's a very important lever for you. But so is a private cloud environment. How you think about the two things becomes important.

I personally feel this. There is too much of a focus on cost. Almost everything comes down to it. It costs us so much in private and public and on-premise and so on.

I also think that we underestimate, or customers underestimate, the time to impact or the innovation capability that they can generate through this. If you have a legacy app where your business processes have changed, the customer demand and how customers want to consume have changed, your ability to respond to that, to come out with new, innovative products and services, it's much harder to do (as you could imagine) in a legacy kind of app environment.

In a cloud-based environment with Kubernetes and how you create and the software lifecycle, all of those innovations can be much faster. You can experiment on them quickly. You can get them deployed quickly.

It's important to look at the cost, yes. But also make these decisions based on your ability to compete. That's what will get much more of the attention of the business users.

How important is the ecosystem to cloud migration?

Michael Krigsman: Let's talk about impact on the business. Why should CIOs invest the time needed to really understand this cloud ecosystem and how the pieces fit together?

Zia Yusuf: There's definitely a journey and new technologies have come into play where CIOs have the ability to optimize both cost and, as I mentioned earlier, hopefully, innovation capability across multiple deployment options.

You also have to, by the way, look at this internationally. When you have different rules and sovereign cloud rules in Europe, and you've got in Asia Pacific and China, I mean that landscape of cloud and technology operating platforms is a lot for you to manage.

The first piece of the puzzle – and I'm not saying anything dramatic here – is really link your business strategy to your IT strategy going forward. I think then the question becomes and is, who are the players and who are the products and software that you need to put around it?

It's the age-old question of how quickly do you move something. Is it worth moving it? Do you rewrite it? Do you do all of these things?

I think the role of software vendors, the role of companies like ourselves is to provide as much flexibility and as much honest advice that we can to keep the end business result and business impact in mind. All of this is supercharged, in a sense, because of the speed and the integration and the massive capabilities and the change in capabilities in AI.

Now you're seeing things like ChatGPT, and so all of this stuff can have such a profound impact on your capability. You have to make some tough choices on what you can actually absorb.

Michael Krigsman: It seems that the ecosystem composition has evolved into the cloud and, therefore, regardless of your IT strategy, regardless of your business strategy, CIO and the CIO's team must understand the pieces of the ecosystem so that they can make intelligent choices about where to place their data.

Zia Yusuf: It's choices on how much control you have versus how much control you give up. There are certainly advantages to those pieces of the puzzle. I think managed services and managed service providers are going to become increasingly important in the world going forward because of some of the tradeoffs that you need to make.

You can just get up and running quickly. And because it's kind of handcrafted (in most cases) to your needs, you can make adjustments as well without carrying all the burden and the fixed cost in that.

What is the role of ecosystem in innovation and cloud adoption?

Michael Krigsman: Zia, you mentioned innovation earlier. How does a well-managed cloud ecosystem enable innovation, business agility, efficiency, and all the benefits that we desire as business leaders?

Zia Yusuf: In a cloud context (in a public cloud / private cloud context), if you want to amp up the compute capability that suddenly is required and different, you can do that easily. You want to have maybe a Kubernetes-based environment that allows you to manage that software supply chain so that everybody is working off models and so on.

That again is a very significant capability that increases your speed to impact. This is the speed or time to impact that I talked about earlier.

When you look at getting data and using AI and ML models, many cloud providers have their own AI and ML capability. Bringing that AI and ML capability to bear, either natively or through other mechanisms, all of those things today allow you to innovate, write code, get it up and running, get it in the hands of consumers or other businesses much faster than in history.

I think so-called "born in the cloud" companies are, in some sense, Michael, as you know, in a constant beta. Right? I mean things change. [Laughter] Every day, you may not even know it. They're doing A/B testing, and they're doing all of those kinds of things.

Michael Krigsman: When your cloud ecosystem is working well, you have a foundation for all of these business benefits (ranging from innovation to efficiency).

Zia Yusuf: This is where you can also look at the vertical expertise of your ecosystem. Now, historically, VMware virtualization, horizontal infrastructure layer, it mattered less what the vertical use cases were.

I think if you look at what we are doing today, and if you look at what the other public cloud players and other cloud players are doing, the go-to-market is very much a vertical motion. What happens in financial services? What are the use cases in financial services?

Being vertically aware and vertically oriented in things like financial services, healthcare, retail, certainly in public sector which has a very unique demands. I think that vertical expertise becomes much more important even if you're talking about horizontal software than has been the case in the past.

Advice to CIOs on migration from on-premises to cloud?

Michael Krigsman: Zia, all of this raises the question, what should CIOs do in order to ensure that they are approaching cloud in the right way?

Zia Yusuf: The first is to connect their business strategy with their technology strategy. That phrase is easy to say. [Laughter] It's a very complex Rubik's cube to answer.

But our suggestion – I think most CIOs look at it this way – it's not technology for the sake of technology; it's technology for a purpose. And we should never forget that. And really kind of drive those decisions hard.

Secondly, especially as you're talking about cloud, you should have a hybrid cloud strategy or, as we call it, a cloud smart strategy. Don't take everything to public cloud. Don't leave everything on-premise. Figure out where your pieces of the puzzle are best optimized from cost and innovation. Be cloud smart.

The first one, connect business strategies and technology strategies. Second, be cloud smart. Third, as a CIO, thoughtfully leverage the ecosystem.

If you are working with a product that's AWS and VMware together, if we both work with a certain GSI, then connect those three pieces together. You'll end up with a stronger outcome.

How should CIOs plan and architect their cloud computing ecosystem?

Michael Krigsman: The third point you just raised seems to be, be strategic in selecting and constructing, architecting your cloud ecosystem.

Zia Yusuf: What are the companies behind those solutions, and where do they have a relationship with other members of my ecosystem? If I combine software from company A, B, and C, it feels like system integrator D has the strongest kind of three-way relationships, that will then get you up and running.

Yes. In the same way that we and I have to construct an ecosystem, I think CIOs need to also not just consume products and services but take advantage of their own integrated, architected ecosystem of solution and service providers. Ecosystem, again, is a deliberate orchestration of a set of relationships that allow you to meet a certain goal.

We need to do that as a software company. Our other software partners need to do that.

I think customers need to kind of step up and be even more thoughtful on how they orchestrate their own ecosystem. They certainly do it to some degree. Some do it very well.

What are the best metrics to use for evaluating a cloud migration strategy?

Michael Krigsman: It is very seductive for all of us to gravitate to the cheapest price, even if it's not quite as good a fit or there are issues. Zia, what's the best way for CIOs and IT leaders to evaluate their cloud efforts? What are the metrics or the outcomes or the KPIs that you can recommend?

Zia Yusuf: What I'd encourage CIOs to do is again also look at the innovation piece and the time to impact piece of this. There, I think the metrics need to be a little bit more specific to your situation, but spending as much time thinking about that, which then requires you to truly understand the connection between the cloud changes you're making, the impact on the applications, the impact then on the business process, and then the impact on the innovation aspect to it.

Time to value, Michael, is equally important. If you say, "Hey, six years from now, or five years from now, we'll be able to do X, Y, and Z," I mean two years, already the world is different.

You may pay a higher cost. You may decide that a private cloud deployment for a certain part of your stack, it may be a little more costly but the time to impact or the time to value is less. It's multi-varied decisions. It's a very complex conversation.

Michael Krigsman: How quickly do you see results on the agility it's giving you, as you were just describing?

Zia Yusuf: You need to be able to articulate and have a point of view. Am I going to see an impact (however you define impact) in six months, in nine months, in one year, three years out? That makes a difference to the operating and business units.

Michael Krigsman: Zia, what advice do you have for technology leaders and CIOs for building a robust cloud ecosystem for their organizations?

Zia Yusuf: Look at the connection points and look at not just the technology connection points but the relationship connection points between your ecosystem, the services connection points. And so, deliberately architecting your ecosystem is probably the punchline there, Michael, as opposed to just finding the best solution or just finding the lowest cost solution.

Architecting that ecosystem, that's so important when you're a global enterprise because that just gets out of control when you're talking about you're in 30, 40, 50, 60 different countries. How do you pull those pieces together?

Michael Krigsman: Cloud is an ecosystem. Therefore, what you're saying is looking at the interconnection points and looking at your cloud environment as an ecosystem is the right way to be successful.

Zia Yusuf: I think it's the only way to be successful, and companies are doing it. They're kind of doing it. They may not be doing it as deliberately or as consciously as maybe they could.

Michael Krigsman: Zia, thank you so much for taking time to speak with us today.

Zia Yusuf: It's been a pleasure. As always, a great conversation, and thank you for having me.

Michael Krigsman: That's Zia Yusuf with VMware.