How to chart new territory in the cloud

Steven: People have been hearing a lot about opportunities around Office 365 and the migration to the cloud. But no matter how big the opportunity, migrations by their very nature are temporary. Eventually, everyone will be migrated. It won’t be soon but it will happen. Brian, could you talk to that?

Brian: Things like Exchange were something beautiful for your cycle. It was incredibly predictable. You’d have the first year where the early adopters moved, year two and three where the bulk of the market moved, year four where you got the tail end of it and you started getting the beta of the next release. It was a beautiful predictable cycle. It was probably 30 percent of our business for a long time. With Office 365, increasingly people are just moving to the cloud. They don’t need to run that infrastructure themselves.

With Office 365, you’ve also got to differentiate between opportunistic services around migration – because as you said at some point in time the bulk will have migrated – and sustainable businesses.

You have to differentiate between elements of Office 365. Exchange is something that deprecates your services capability moving forward: once you’ve moved people into Office 365, you’ve lost the services opportunity.

SharePoint is completely different. If you move people to SharePoint in Office 365 you’re actually creating a services opportunity for yourself in taking that and building applications and portals for people moving forward.

You’ve got to be aware of where the market’s going. It doesn’t mean you don’t want to do migration; you just have to understand that at some point in time the business is going to be tough. So start planning today to make an opportunistic business into a sustainable business.

Steven: You mentioned that Exchange was 30 percent of the business. What is it to now?

Brian: It’s probably about 5 percent. There’s still people that will do things on-prem.

Graeme: As long as I've been in the IT industry, there have been constant waves of technology and it’s about how organisations can get on board with those waves and know which ones to grab and which ones not to.

Nicki: I think we’ve seen that with Kloud. We continue to bring things to market based on what our customers are asking us for, not because we think it’s cool to go and do SharePoint or small mobile development. It’s because our customers are demanding it.

Skills for change

Steven: We talked about the financial requirements to evolve your company and to chart new territory. Another big part of change is people. Scott, you work with Griffith Uni, what are you seeing?

Scott: I'm an alumnus of Griffith University and concerned generally about the amount of talent coming out of universities in the ICT sector. I participate in the industry advisory board for the school of ICT. I also agreed to mentor one of the students to assist them with their transition out of university into the workplace.

We as an industry really need to do a lot of work, firstly on the number of graduates and also women in ICT well, because women are under-represented in the talent pool. We’ve got to continue to invest in graduates and bring them through, because you can have a wages war going after each other’s staff but you’ve got to generally build the industry as well and bring people in. That’s really important.

Steven: One skill people are looking for now is a ‘cloud architect’. Nicki, Kloud has grown extremely quickly, how easy is it to find those people, and how competitive is it?

Nicki: It’s not easy. We’ve had to do a lot of cross-skilling and upskilling of a lot of our guys, whether they’ve come from a networking background into the Microsoft background. We’ve also recently had some success with a lot of expats coming back into Australia. They’ve got a lot of experience overseas. That’s been quite good.

Steven: We’ve talked about skills, we’ve talked about finance, and we've talked about technology. I’d like to end on vendors and who you work with. Dave, Brennan works with quite a number of vendors. How do you structure the relationships?

Dave: We’ve all got a group of vendors that are just transactional – where we place purchase orders and haggle over some price and they ship some goods then there are a few vendors, Microsoft is a good example, where you get a much more strategic engagement. You’re writing business plans together and sharing your business plan with them. We have that good relationship with a very small handful.

Steven: Brian, there are some pros towards getting really close to your vendor, but also what are some of the risks?

Brian: You want to make sure you’re diversified, because if you’ve got all your eggs in one basket, you expose your business. You’ve got to work out with vendors the investment needed to make to get a worthwhile return. You can sit there and be talking to 20 different vendors, but in the end how do you train the people and keep them current?

The thing that worries me is orphan solutions where you get engaged with a vendor, you get one or two people trained, you do one install, and then you lose the person, you don’t get engaged with the vendor, but you’re left with that customer to support. So you’ve got to be really careful how you pick the vendors. If you’ve got any more than three or four vendors you’re really trying to engage with deeply it’s too many.

Nicki: We probably get a phone call a day from a different vendor saying, 'Can you come and partner with us?' No disrespect to any of the vendors in the room, but we have a strategy around a small amount of vendors that we focus on.

We still need to become vendor-independent because that’s what our customers are asking us for. They don’t want us to go into a meeting and just talk Microsoft to them. Yes, we absolutely deploy and do a lot of great work for Microsoft, but customers want that independent advice. We need to have a few vendors, not multiple.

Graeme: A lot of our business is centred on Microsoft and we make no apologies for that because they are a gorilla in the industry, but the best analogy is 'dancing with the elephant', because occasionally they do stand on your toes. The natural reaction would be to run away because you don’t want that elephant to stand on your toes any more, but the reality is the elephant probably didn’t mean to stand your toes, it’s just part of what they do.

Perhaps an example of standing on your toes might be doing Office 365 migrations rather than giving it to the partners, but in reality it is what it is. You kind of dust yourself off, pick yourself up and figure out a way to re-engage. Then you’ve still got a good, strong business. There’s no reason to run away.