Tag: cloud adoption

Why Companies Are Considering Small Tech Firms for Cloud Services | Blog

Cloud as a concept and then as a reality swept through businesses over the past ten years, and most companies moved a lot of their applications to public cloud platforms. AWS, Google Cloud Platform, and Microsoft’s Azure (the hyperscale service providers) are now powerful influencers in business today. They turned IT into a commodity and then put an as-a-service layer on it, thus influencing business thinking as well as IT. But companies are now competing in a different way.

Read more in my blog on Forbes

Oscar Health’s +Oscar Platform May Signal a Turning Point for Healthcare Payer Product Innovation

Product innovation has been lacking in the healthcare payer product space. But can this be changing? Oscar Health’s launch of +Oscar platform may lead to an uptick in new product launches.

Soon after officially going public in March, the US-based digital native health insurer introduced +Oscar, a tech-driven platform business designed to help healthcare clients drive improved efficiency, growth, and engagement with their members and patients. +Oscar offers a cloud-based service architecture and integrated data and analytics layer to serve clients spanning the individual, Medicare Advantage, and group lines of payer business.

What led to this move?

The healthcare payer industry is rapidly changing, marked by a seminal shift to value-based care, rise in consumerism and digitization, and demand for personalized member experience, among other factors. Despite the dynamic nature of the market, the healthcare payer product space has not evolved at the same pace.

With the launch of +Oscar following the January news of Optum’s acquisition of Change Healthcare, the tides could be changing in this space. We expect the spurt already witnessed in product development activities in the payer industry to continue and accelerated product launches to follow.

The payer product/platform space has traditionally been dominated by larger players such as Cognizant (TriZetto Healthcare Products), HealthEdge, and Oracle, which offer productized core administrative platforms. In addition, point solution providers such as Optum (Change Healthcare) and Cotiviti offer solutions addressing one or more segments across the payer value chain. While payers feel most of the available products/platforms lack the essential digital dexterity, we believe that Oscar’s digital native payer platform is one of the significant developments in addressing this issue.

Unpacking +Oscar


Below is the key business value proposition of +Oscar:

Picture1 12

 

What works in Oscar’s favor?

Everest Group conducted focused interviews in the fourth quarter of 2019 with ten senior executives (CIOs and COOs) across the payer spectrum to understand their challenges and approaches to a platform-led modernization approach (read more at A Platform-based Roadmap for Healthcare Payers). Here is how +Oscar aligns to the key themes that we explored in these interviews:

Oscar Health

One of the key takeaways from the executive conversations was increasing traction toward an affiliate partner model. An affiliate partner model offers multiple benefits such as combined resources and domain expertise to drive innovation, shared ownership of innovation risk, and economies of scale to drive down costs. Having a payer affiliate as an IT partner is advantageous for healthcare plans (specifically for the small ones), as the partner understands their culture and business dynamics better. Hence, the affiliate model that Oscar Health offers makes +Oscar more relevant in the market.

What’s next?                                                              

With the payer technology market witnessing a strong nudge to innovate, we believe the launch of +Oscar is an indicator of the things to come. With BigTechs (Amazon, Microsoft, Salesforce, ServiceNow) making big bets in the core healthcare segment (Amazon HealthLake and the Microsoft Nuance deal) and digital native payers externalizing their technology, traditional product vendors will need to up their games to remain competitive.

We are positive about this investment by Oscar Health. However, it remains to be seen how Oscar leverages an affiliate partner model as well as addresses the main issue of Return on Investment (RoI) to build a valid business case for +Oscar.

Reach out to us at [email protected] or [email protected] with your thoughts.

Cloud War Chapter 6: Destination versus Architecture – Are the Cloud Vendors Fighting the Right Battle? | Blog

Most cloud vendors are obsessed with moving clients to their platforms. They understand that although their core services, such as compute, are no longer differentiated, there is still a lot of money to be made just by hosting their clients’ workloads. And they realize that this migration madness has sufficient legs to last for at least three to five years. No wonder migration spend constitutes 50-60 percent of services spend on cloud.

What about the workloads?

The cloud destination – meaning the platform it operates on – does not help a workload to run better. To get modernized and even natively built, a workload needs open architecture underpinned by software that helps applications be built just one time and run on any platform. Kubernetes has become a standard way of building such applications. Today, every major vendor has its own Kubernetes services such as Amazon EKS, Azure Kubernetes Services, Google Kubernetes Engine, IBM Cloud Kubernetes Service, and Oracle Container Engine for Kubernetes.

However, Kubernetes does not create an open and portable application. They help in running containerized workloads. But if those workloads are not portable, Kubernetes services defeat the purpose. Containerized workloads need to be architected to ensure user and kernel space are well designed. This is relevant for both new and modernized workloads. For portability, the system architecture needs to be built on a layer that is open and portable. Without this, the entire migration madness will simply add one more layer to enterprise complexity. Interestingly, any cloud vendor that helps clients build such workloads will almost always be the preferred destination platform, as clients benefit from combining the architecture, build, and run environment.

Role of partners of cloud vendors

Cloud vendors need to work with partners to help clients build new generation workloads that are easily movable and platform independent. The partners include multiple entities such as ISVs and service providers.

ISVs need to embed such open and interoperable elements into their solution so that their software can run on any platform. Service providers need to engage with clients and cloud vendors to build and modernize workloads by using open, interoperable principles. As there is significant business in cloud migration, there is a risk that the service partners will get blinded and become more focused on the growth of their own cloud services business than on driving value for the client. This is a short-term strategy that can help service providers meet their targets. But it will not make the service provider a client’s strategic long-term partner.

Role of enterprises

There is significant pressure on enterprise technology teams to migrate workloads to the cloud. Many of the clients we work with take pride in telling us they will move more than 80 percent of their workloads to the cloud in the next two to three years. There is limited deliberation on which workloads need newer build on portable middleware, or even if they need a runtime that can support an open and flexible architecture. Unfortunately, many enterprise executives have to show progress in cloud adoption. And though enterprise architects and engineering teams do come together to evaluate how a workload needs to be moved to the cloud, there is little discussion on building an open architecture for these workloads. A bright spot is that there seem to be good architectural discussions around newer workloads.

Enterprises will soon realize they are hitting the wall of cloud value because they did not meaningfully invest in building a stronger architecture. Their focus in moving their workloads to their primary cloud vendor is overshadowing all the other initiatives they must undertake to make their cloud journey a success.

Do you focus on the architecture or the destination for your workloads? I’d enjoy hearing your experiences and thoughts at [email protected].

You are on AWS, Azure, or Google’s Cloud. But are you Transforming on the Cloud? | Blog

There is no questioning the ubiquity of cloud delivery models, independent of whether they’re private, public, or hybrid. It has become a crucial technology delivery model across enterprises, and you would be hard pressed to find an enterprise that has not adopted at least some sort of cloud service.

However, adopting the cloud and leveraging it to transform the business are very different. In the Cloud 1.0 and Cloud 2.0 waves, most enterprises started their adoption journey through workload lift and shifts. They reduced their Capex and Opex spend by 30-40 percent over the years. Enamored with these savings and believing their job was done, many stopped there. True that the complexity of the lifted and shifted workload increased when they moved from Cloud 1.0 to Cloud 2.0, e.g., from web portal to collaboration platforms to even ERP systems. But, it was still lift and shift, with minor refactoring.

This fact demonstrates that most enterprises are, unfortunately, treating the cloud as just another hosting model, rather than a transformative platform.

Yet, a few forward-thinking enterprises are now challenging this status quo for the Cloud 3.0 wave. They plan to leverage the cloud as a transformative model where native services can be built in to not only modernize the existing technology landscape but also for cloud-based analytics, IoT-centric solutions, advanced architecture, and very heavy workloads. The main difference with these workloads is that they won’t just “reside” on cloud; they will use the fundamental capabilities of the cloud model for perpetual transformation.

So, what does your enterprise need to do to follow their lead?

Of course, you need to start by building the business case for transformation. Once that is done, and you’ve taken care of the change management aspects, here are the three key technology-centric steps you need to follow:

Redo workloads on the cloud

Many monolith applications, like data warehouses and sales applications, have already been ported to a cloud model. You need to break the ones you use down based on their importance and the extent of debt in terms of the transformation needed. Many components may be taken out of the existing cloud and ported in-house or to other cloud platforms based on the value they can deliver and their architectural complexity. Some components can leverage cloud-based functionalities (e.g., for data analytics) and drive further customer value. You need to think about extending the functionality of these existing workloads to leverage newer cloud platform features such as IoT-based data gathering and advanced authentication.

Revisit new builds on the cloud

Our research suggests that only 27 percent of today’s enterprises are meaningfully building and deploying cloud-native workloads. This includes workloads with self-scaling, tuning, replication, back-up, high availability, and cloud-based API integration. You must proactively assess whether your enterprise needs cloud-native architectures to build out newer solutions. Of course, cloud native does not mean every module should leverage the cloud platform. But a healthy dose of the workload should have some elements of cloud adoption.

Relook development and IT operations on the cloud

Many enterprises overlook this part, as they believe the cloud’s inherent efficiency is enough to transform their operating model. Unfortunately, it does not work that way. For cloud-hosted or cloud-based development, you need to relook at your enterprise’s code pipelines, integrations, security, and various other aspects around IT operations. The best practices of the on-premise era continue to be relevant, albeit in a different model, such as tweaks to the established ITSM model). Your developers need to get comfortable with leveraging abstract APIs, rather than worrying about what is under the hood.

The Cloud 3.0 wave needs to leverage the cloud as a transformation platform instead of just another hosting model. Many enterprises limit their cloud journey to migration and transition. This needs to change going forward. Enterprises will also have to decide whether they will ever be able to build so many native services in their private cloud. The answer is probably not. Therefore, the strategic decision of leveraging hybrid models will become even more important. The service partners will also need to enhance their offerings beyond migration, transformation during migration, and management. They need to drive continuous evolution of workloads once ported or built on the cloud.

Remember, the cloud itself is not magic. What makes it magical is the additional transformation you can derive beyond the cloud platform’s core capabilities.

What has been your experience in adopting cloud services? Please write to me at [email protected].

Hadoop and OpenStack – Is the Sheen Really Wearing off? | Sherpas in Blue Shirts

Despite Hadoop’s and OpenStack’s adoption, our recent discussions with enterprises and technology providers revealed two prominent trends:

  1. Big Data will need more than a Hadoop: Along with NoSQL technologies, Hadoop has really taken the Big Data bull by the horns. Indications of a healthy ecosystem are apparent when you see that leading vendors such as MapR is witnessing a 100% booking growth, Cloudera is expecting to double itself, and Hortonworks is almost doubling itself. However, the large vendors that really drive the enterprise market/mindset and sell multiple BI products – such as IBM, Microsoft, and Teradata – acknowledge that Hadoop’s quantifiable impact is as of yet limited. Hadoop’s adoption continues on a project basis, rather than as a commitment toward improved business analytics. Broader enterprise class adoption remains muted, despite meaningful investments and technology vendors’ focus.

  2. OpenStack is difficult, and enterprises still don’t get it: OpenStack’s vision of making every datacenter a cloud is facing some hurdles. Most enterprises find it hard to develop OpenStack-based cloud themselves. While this helps cloud providers pitch their OpenStack offerings, adoption is far from enterprise class. The OpenStack foundation’s survey indicates that approximately 15 percent of organizations utilizing OpenStack are outside the typical ICT industry or academia. Moreover, even cloud service providers, unless really dedicated to the OpenStack cause, are reluctant to meaningfully invest in it. Although most have an OpenStack offering or are planning to launch one, their willingness to push it to clients is subdued.

Why is this happening?

It’s easy to blame these challenges on open source and contributors’ lack of coherent strategy or vision. However, that just simplifies the problem. Both Hadoop and OpenStack suffer from lack of needed skills and applicability. For example, a few enterprises and vendors believe that Hadoop needs to become more “consumerized” to enable people with limited knowledge of coding, querying, or data manipulation to work with it. The current esoteric adoption is driving these users away. The fundamental promise of new-age technologies making consumption easier is being defeated. Despite Hortonworks’ noble (and questioned) attempt to create an “OpenStack type” alliance in Open Data Platform, things have not moved smoothly. While Apache Spark promises to improve Hadoop consumerization with fast processing and simple programming, only time will tell.

OpenStack continues to struggle with a “too tough to deploy” perception within enterprises. Beyond this, there are commercial reasons for the challenges OpenStack is witnessing. Though there are OpenStack-only cloud providers (e.g., Blue Box and Mirantis), most other cloud service providers we have spoken with are half-heartedly willing to develop and sell OpenStack-based cloud services. Cloud providers that have offerings across technologies (such as BMC, CloudStack, OpenStack, and VMware) believe they have to create sales incentives and possibly hire different engineering talent to create cloud services for OpenStack. Many of them believe this is not worth the risk, as they can acquire an “OpenStack-only” cloud provider if real demand arises (as I write the news has arrived that IBM is acquiring Blue Box and Cisco is acquiring Piston Cloud).

Now what?

The success of both Hadoop and OpenStack will depend on simplification in development, implementation, and usage. Hadoop’s challenges lie both in the way enterprises adopt it and in the technology itself. Targeting a complex problem is a de facto approach for most enterprises, without realizing that it takes time to get the data clearances from business. This impacts business’ perception about the value Hadoop can bring in. Hadoop’s success will depend not on point solutions developed to store and crunch data, but on the entire value chain of data creation and consumption. The entire process needs to be simplified for more enterprises to adopt it. Hadoop and the key vendors need to move beyond Web 2.0 obsession to focus on other enterprises. With the increasing focus on real-time technologies, Hadoop should get a further leg up. However, it needs to provide more integration with existing enterprise investments, rather than becoming a silo. While in its infancy, the concept of “Enterprise Data Hub” is something to note, wherein the entire value chain of Big Data-related technologies integrate together to deliver the needed service.

As for OpenStack, enterprises do not like that they currently require too much external support to adopt it in their internal clouds. If the drop in investments is any indication, this will not take OpenStack very far. Cloud providers want the enterprises to consume OpenStack-based cloud services. However, enterprises really want to understand the technology to which they are making a long-term commitment, and are cautious of anything that requires significant reskill or has the potential to become a bottleneck in their standardization initiatives. OpenStack must address these challenges. Though most enterprise technologies are tough to consume, the market is definitely moving toward easier deployments and upgrades. Therefore, to really make OpenStack an enterprise-grade offering, its deployment, professional support, knowledge management, and requisite skills must be simplified.

What do you think about Hadoop and OpenStack? Feel free to reach out to me on [email protected].


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