HSBC and AWS have just announced a massive, strategic deal that indicates a clear direction of travel for one of the world’s largest banks. So, is this a sign that one of the more cloud-sceptical sectors is really changing tack? Or is it another big cloud deal that works well around the edges but doesn’t drive a true transformation away from data centres and on-premises, bespoke infrastructure?
Deutsche Bank also issued a press release with Google last week so it would seem that things might be changing. There have been similar announcements in the past – Barclays signed a big deal with AWS in 2016 and HSBC themselves also publicised their adoption of Google Cloud Platform in 2017. While publicity about how these initiatives have gone has been limited, the recent announcements are a sign that “dipping the toe in the water” has been successful and banks are prepared to make bigger bets on cloud.
The priority of data confidentiality and integrity from the business, and a very understandable lack of cloud experience at exec board level to sign-off on any risks and controls, have held banks back from rapid cloud adoption. This is despite banks holding some of the world’s best technology talent, many of whom will take the position that cloud is more robust and secure than any alternatives.
Is change finally afoot? Will banks embrace the challenge of ring-fencing the investment to refactor and re-architect platforms to modernise them for PaaS services?
There are grounds for scepticism – modernising core banking mainframes and their heritage IT systems is the definition of daunting – so what will make it different this time around? Every very large organisation will have years of organic technology spaghetti and variation in architectural governance, which will create inertial challenges in the Tier 1s. But there are also grounds for optimism.
This very public backing for cloud from the likes of HSBC and Deutsche Bank will not go unnoticed by the industry, and may indeed be just the confidence-inspiring fillip that drives faster cloud migration and adoption among Tier 2 institutions and market service providers who haven’t moved yet – they may see these kinds of decisions as the starting pistol for them to follow.
I once heard it said that moving to the cloud should not be about trying to “run your mess for less”. Moving to the cloud should be treated as the start of a fundamental transformation in how you design, plan, build and deliver the products and services that create value for your organisation. It must be used as an opportunity to consolidate and modernise your technology ecosystem and enable a greater level of both technology and business agility.
Having the right mindset will enable the true benefits of cloud adoption to be realised. To do this there is often a need to unwind the almost unmanageable complexity of heritage IT systems, hamstrung by challenges with data, data governance and integration; for example, data duplicated across multiple sources and moved around the organisation in fragile batch processes. There is also a need to do this incrementally in slices across the organisation, however mistakes can be made in trying to find the correct slices.
In 1967, Melvin Conway stated, “Organisations which design systems are constrained to produce designs which are copies of the communication structures of these organizations.” A successful digital and cloud transformation for a large institution has to take this into account to avoid falling foul of “Conway’s Law”. To successfully move to the cloud large institutions need to consider the flow of value from customer or end user and use this as the foundation of the approach and driver of their transformation, and not manage the transformation as a lift-and-shift from on premise to cloud by department or division.
Large commercial organisations should look to the work the UK government has done in moving to the public cloud as part of its on-going digital transformation, something which Kainos has played a key role in, and developed significant experience in over the past 8 years. Citizen services are being re-engineered from front to back, incrementally using the processes, techniques, approaches, technologies and business processes that are second nature to the very internet generation companies they are buying cloud services from. Approaches that put customers and users at the heart of the transformation.
If you’re ready to make the move to public cloud but don’t know where to start, or have started but need help completing the journey, then Kainos can help, drawing on the breadth of experience we have of designing, building, modernising and delivering services on the public cloud. Kainos have the cloud adoption expertise to help the transformation of your business. We have a proven track record of enabling organisations migrate, modernise and manage their digital platforms in the cloud and realise the full financial, business and agility benefits available. We won’t just talk you through the theory of migration, we will show you how and where we have done it for our customers in complex and business critical environments. Visit our Starting the Cloud Journey page to find out more.