All Posts By

Ankit Gupta

Fragmented DevOps = Minimal Value | Blog

By | Automation/RPA/AI, Blog

Enterprises are increasingly embracing DevOps to enhance their business performance by accelerating their software time-to-market. In principle, DevOps covers the entire spectrum of Software Development Life Cycle, SDLC, activities from design through operation. But, in practice, only ~ 20 percent of enterprises are leveraging DevOps end-to-end, according to our recent research, DevOps Services PEAK Matrix™ Assessment and Market Trends 2019 – Siloed DevOps is No DevOps!

That means the remaining ~ 80 percent that are taking a siloed approach to DevOps are missing out on the many types of values it can deliver.

Types of DevOps fragmentation

Instead of adopting DevOps in its intended end-to-end fashion, many enterprises in different verticals and at different stages of maturity are tailoring it to focus on siloed, distinct portions of the SDLC. The most common types of fragmentation are: 1) Apps DevOps, applying DevOps principles only across the application development cycle; 2) Test Ops, using DevOps principles in testing; and 3) Infra Ops, applying DevOps principles only to infrastructure.

Why fragmentation delivers minimal value

Pocketed adoption makes it tough to realize the full value that DevOps can deliver. The primary reason is bottlenecks. First, workflow throughout the SDLC is impeded when DevOps principles and automation are only applied to certain phases of it. Second, lack of end-to-end adoption makes it more difficult for enterprises to gain a full view of their applications portfolio, spot bottlenecks, incorporate stakeholder feedback in real-time, and make the entire process more efficient.

Additionally, when DevOps is used in a siloed manner, it focuses primarily on increasing the technical efficiency of processes. This means that DevOps’ ability to support the enterprise’s broader business-oriented objectives is severely restricted.

Finally, fragmented DevOps adoption creates a disintegrated culture in which teams work independently of each other, in turn leading to further conflicts, dependencies, and stretched timelines. All this, of course, defeats DevOps’ main purpose.

Moving to end-to-end DevOps adoption

To successfully adopt DevOps end-to-end, enterprises should place automation, culture, and infrastructure at the heart of their strategy.

  • Automation: Automating various elements of the SDLC is extremely beneficial; doing so helps reduce implementation timelines and increase team productivity by standardizing processes and diminishing the scope of errors
  • Culture: A collaborative culture is essential to a successful DevOps implementation as it involves the development, operations, and business teams working together in an iterative fashion to achieve cross-team and business-oriented KPIs
  • Infrastructure: Increasing adoption of cloud-native technologies like as infra-as-code, microservices, serverless, and containers helps maintain configuration consistency in deployment, eventually leads to an increase in developer productivity, and saves on cloud computing costs.

DevOps has the ability to deliver significant value to enterprises. But implementing it in a siloed manner quickly dilutes a lot of that potential value. To realize all DevOps’ benefits, enterprises should implement it end-to-end, invest in automation, robust and modular infrastructure, and tools and technologies to ensure agility, and develop a culture that helps them improve cross-team collaboration.

What has been your experience in your DevOps adoption journey? Please share with us at [email protected] and [email protected].

HCL Acquires IBM Products – Desperation or Aspiration? | Sherpas in Blue Shirts

By | Blog, Mergers & Acquisitions, Outsourcing

On December 6, 2018, HCL announced it had acquired seven IBM products across security, commerce, and marketing for a record US$1.8 billion. To provide a financial context to this acquisition: HCL, India’s third largest IT services provider, invested about 22 percent of its annual revenue to bolster its products and platforms portfolio – what it refers to as its Mode 3 portfolio – which barely contributes to 10 percent of its annual revenue.

Demystifying the Why

What strategic outcomes could HCL potentially derive from this deal?

  • Cross-sell opportunities: Access to the more than 5,000 enterprises currently using the acquired IBM products
  • Superior value proposition around as-a-service offerings: Integration of these products with HCL’s ADM, infrastructure, and digital services
  • Top-line growth due to recurring revenue streams and expanded EBIDTA margins
  • Fewer dependencies on external vendors: Improved capabilities to bundle internal IP with services can enable HCL to have greater control over outcomes, thereby enhancing its ability to deliver value at speed

 Sounds good…Right?

At first glance, the acquisition may seem to be a strategic fit for HCL. But when we dug deeper, we observed that while some of the IP plugs gaps in HCL’s portfolio, others don’t necessarily enhance the company’s overall capabilities.

HCL acquisitions

This analysis raises meaningful questions that indicate there are potential potholes that challenge its success:

  • Confusion around strategic choices: The product investments point to a strong proclivity towards IT modernization, rather than digital transformation. This acquisition of on-premise products comes at a time when inorganic investments by peers’ (recent examples include Infosys’ acquisition of Fluido and Cognizant’s acquisition of SaaSFocus) and enterprises’ preference are geared towards cloud-based products
  • Capability to drive innovation at speed on the tool stack: To address the digital needs of new and existing clients, as well as to deliver on the promise of as-a-service offerings, HCL needs to repurpose the products and make significant investments in modernizing legacy IP
  • Financial momentum sustenance: With an increasing number of clients moving away from on-premise environments to cloud, it remains to be seen if HCL can sustain the US$650 million annual revenue projection from these products
  • Customer apprehensions: Customers that have bundled these products as part of large outsourcing contracts built on the foundation of their relationships with IBM will likely be apprehensive about the products’ strategic direction, ongoing management, and integration challenges as their IT environments evolve
  • The illusion of cross-sell: It remains to be seen if HCL can succeed in cross-selling digital services for these legacy products, especially in the beginning of its relationship with the 5,000+ clients currently using the in-scope IBM products.

 The Way Forward

The acquisition definitely is a bold move by HCL, which may seem meaningful from an overall financial investment and ROI perspective. However, the subdued investor confidence reflects poor market sentiment, at least at the start. Although this could be considered a short-term consequence, HCL’s investments in these legacy products is in stark contrast to the way the rest of industry is moving forward.

On the day of the acquisition, HCL’s stock price fell 7.8 percent, signaling negative market sentiments and thumbs down from analysts. In contrast, the market behaved differently in response to  acquisitions by HCL’s peers in the recent past.

To prove the market wrong, HCL needs to focus its efforts on developing and innovating on top of these products; developing synergies with its ADM, infrastructure, and digital services; alleviating client apprehensions; and providing a well-defined roadmap on how it plans to sustain momentum leveraging these products over the long term.

What is your take on HCL’s acquisition of these IBM products? We would love to hear from you at [email protected] and [email protected].