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Cloud Migration and Vendor Outsourcing

Software specialist and seasoned entrepreneur Jesse Lee discusses cloud migration, vendor outsourcing, and why better supplier-management tools and processes are essential to sustaining competitive advantage.

“More and more companies are shipping more and more operations to cloud service providers, or to other external solution providers,” starts Jesse. “For one thing, external services are turning into more of a commodity at and below a certain layer in the technology stack.  Moreover, SaaS solution providers bring rich innovation plus high reliability, promising this or that nice new advantage that is worth the change and risk.”

“In the Enterprise-IT market today, the usual justifications for this trend are two-fold.  They go like this:

“’One, we as a business should focus on our core business and stop reinventing a wheel that others offer as a great service and at scale.

“Two, we want to become a data-driven business with compelling customer and partner engagement models and solutions. That is a central pillar of our digital transformation strategy currently underway (or at least envisioned). The market provides solutions faster than we can innovate, build, grow, and sustain them, so we turn to third-party providers that help us sustain and even build a competitive advantage.

“Finally, while that is all great, it means we are introducing new risk into the business in terms of vendor and supplier reliability and control.  So we better govern and manage all this very effectively, if we are going to trust more and more of our core business to outside providers.’

“That is the calculus I see going on, in most companies and across the board.  We don’t have space here to discuss the variations and the many ways it plays out, but suffice it to say, most companies are in the middle of a long journey in which they are biting off more and more vendor/supplier risk in hopes of great success in their digital transformation journey.”

So how can this big-IT trend towards outsourcing benefit entrepreneurs?

For Jesse, it’s all about identifying markets and waves of change. If an entrepreneur can identify and then underpin emerging technical practices, like cloud migration, they are putting themselves in good stead.

“You want to be in the way of that change,” says Jesse. “You want a product or service that is attractive to a massive marketplace that’s part of a wave sweeping through the business world at that moment.”

“In big enterprise, which is my playground, the most significant wave is digital transformation and IT outsourcing.  The big trend has been picking up the pace for over 10 years and, according to Jesse, will continue to do so for another 10 years at least.  It will morph along the way, probably into external powering of more end-to-end business services.

But what about potential vulnerabilities? It’s a big question mark. Security is one facet of the challenge. There’s a strong security posture brought forward by the top-tier cloud vendors, Amazon and Microsoft, says Jesse. It’s just got more attention and focus than a typical enterprise will devote to the cybersecurity challenge.  “Of course, you pay, and at scale, you pay dearly, for that advantage,” he adds.

“If we accept that it is a significant trend in big business to outsource IT to third-party suppliers, and more and more of this core business depends on these suppliers protecting our data, then business will become very focused on value for money.”

For Jesse, current first-generation software does not provide businesses with this assurance.

“To achieve value for money, you need to cover the following areas,” says Jesse:

“You need a way to hold your vendor accountable for cost and performance.

“But, in addition to cracking whips, the vendor needs recognition and reassurance in the hope of a long-term partnership.”

“You need productive collaboration that will offer transparency, and most importantly, you need to achieve strategic alignment based on trust.”

“When you, as a vendor, share your strategic roadmap, the customer can tailor their offerings to help you achieve these goals.

“While these are lofty goals, when we dig into the state of affairs, often we find something far short of these ideals.  That’s OK; it is an opportunity, not a problem.”

Jesse predicts a lot more collaboration in the future. “We already see this more and more,” he exclaims. “Management consultancies like McKinsey and Co. and Boston Consulting Group (BCG) tell us that these collaborations are happening more and more, and are likely to continue because the business benefits are simply incontrovertible.”

“Companies that demonstrate a high degree of vendor/supplier trust and partnership outperform their peers across several measures, financial and non-financial.”

A Q&A with Jesse Lee

Jesse Lee is a technology and business management specialist best known as the co-founder of the popular technology business management software company Apptio (NASDAQ: APTI, market cap: $1.8b). Today, Jesse is Chief Digital Officer at the IT consultancy firm StrataPrime.

How did you begin working in the IT industry? What kickstarted your interest?

I read a study recently claiming that around 80 percent of software developers started out with a passion for computer engineering and are self-taught. The same can be said for me. I had some spare time during my Environmental Engineering courses at University, so I enlisted in an engineering honors program and built a programming model that simulated buildings withstanding earthquakes.

I went through law school, worked a legal clerkship and realized I didn’t want it to be the arc of my career after all. I’ve drawn upon that legal training for small business many times, but I never wanted to be a litigator or a full-time solicitor.  I have always been most interested in technology, specifically the intersection of business and technology – the challenges, opportunities, and skill set needed to make very different people with different jobs help each other to achieve a common goal.

You are probably best known for the technology business management platform Apptio, can you tell us a little more about that particular business model?

The product vision for Apptio has always been the same. The concept revolves around modeling how IT money is spent.  One expresses that spend in various buckets that make sense to technical and business people in different roles.  The idea was and still is to bring transparency to what was previously unknown or perhaps unhelpfully expressed.

Business and technical people historically don’t communicate very well, so we saw an opportunity in software to model what is a “sub-ledger for IT” and express it in different ways. From that historical view, one moves to efficiency of current spend as viewed next to certain benchmarks, and finally looking to the future: how better to budget and forecast for IT.

What was your motivation for Apptio?

I had come off the back of many consulting positions and was eager to make an equity play — to acquire some investment and build a product with a financing runway, rather than billing out my hours and the hours of my team.

I had never really done that at scale and I wanted to see how the business worked and try my hand at building, selling, marketing, and supporting custom SaaS products, working alongside some wonderful people.

That was the motivation. Our CTO and myself coded the prototype that got our first round of funding. When we founded the company on Nov 1 2007, we did so taking on a $7 million venture capital investment for a $21 million post-money valuation. Our prototype, along with some early traction accounts and relationships into the venture capital community, got us that deal.

I wanted to use the Apptio experience as my master’s degree, so I moved on from engineering and started the Customer Success division. It was inspired by what Salesforce.com had started a few years earlier.  From there I moved into the Product’s organization, starting and running Technical Marketing.  From there into Pre-Sales where I carried a license quota for the first time, and then into a brand new strategy function, then back into Customer Success where I ran USA East, and then EMEA Customer Success.

Had any team members experienced this early stage funding process in other ventures?

Yes, indeed, one would be the CEO, and also our CFO. The investors were well known to them and had just made a lot of money on the sale of a company of which these two and some of my other very good friends had launched. So part of the founding team were known entities. The venture capital community will look for three things early days. They will look for a great idea that they think the market is ready for, a great team, and differentiating technology. To the extent you have a founding team that posted up some past success for the potential investors, that makes financing easier especially in the earliest, riskiest days.

What did it feel like to go public with Apptio?

On that day of, it felt pretty awesome. It’s great to see your team up on a Times Square jumbotron, and it was undoubtedly a great milestone.  To the investors, an IPO is just a financing event and a new beginning as opposed to a finish line.  The investors and the C-suite lost no chance to remind everyone of that, to be sure.  But it was a nice moment of validation, and for the many employees that worked hard and counted on some equity upside one day, it was a big deal and much more than just a financing event.

What changed with your next venture, Xirocco?

Xirocco was a bootstrapped experiment that my co-founder is still running – an interesting play regarding bringing SaaS to enterprise strategy creation and execution.  After some months, and despite some early wins, I rolled out, as I don’t think it’s destined to grow by leaps and bounds as originally we had planned. I have decided to focus on one or two different projects closer to my sphere of expertise and destined to grow very quickly.

You’ve started a new role with Strata Prime, what’s your position there?

I am a Chief Digital Officer at StrataPrime. These people are former partners and are well known to me as incredibly hard workers and as absolute scientists at cost optimization, backed by a smart methodology and engagement model. StataPrime has earned its way into 300% year-on-year (YOY) growth for the last two years.  We are now entering the next phase of growth and scale.

I have worked at over a half dozen boutique consultancies over some ten or twelve years, and I co-founded half of those. One of those grew to the point of acquisition by Deloitte Digital; another was acquired by Accenture Federal (both after I was gone, to be clear). StrataPrime stands apart in terms of quality and time to value.  The goal is (1) to prove positive project ROI through cost optimization wins, and (2) to leave a customer with an enduring capability to govern their IT estate more cost efficiently. Enterprise IT cost optimization is a passion and skill set off my own as well, and that’s why we joined up.

In five years time?

Now that the company is coming off of two years 3x growth YoY, we have some fun scaling challenges.  There is a high-quality bar to maintain, and there is the challenge of further competitive differentiation.  The company will scale aggressively into western Europe, and there is a Canadian and North American presence as well.

The “Digital” bit of my CDO role has to do with new innovative solutions that drive more value for StrataPrime customers and partners – all focused on what we do best. We’ll be bringing forward some exciting and innovative solutions to tackle those challenges. We’ll have more to say about that in the months ahead.

What advice do you have for budding entrepreneurs?

Appreciate that investors don’t care about your product.  They just don’t care.

If you are a budding entrepreneur and have not accepted this already, then that is worth saying three times.  So once again, they do not care about your product.

They care about your traction.  From your traction they will infer that (1) some value has been created and could possibly grow further, and (2) you have the chops to sell it.

Don’t make that mistake that I made 15-20 years ago by thinking that if you team up with other great developers and pitch your awesome product idea, that’s all you need in-house to start your business. What you need is a crack team rounded out to two to five people in different roles, and a market that is ready for your idea, AND some differentiating technology.  Off of that, you need to build your traction group as fast and far as you can before looking for investors.

I made several attempts to secure investment for some very cool product ideas and eventually figured out that if I’m going to that, the fastest path forward is to team up with someone who had already taken investment from those people before and generated a nice return for them. Make sure you have someone on you’re a team who has already achieved success in your sector.

Also, to the SaaS entrepreneur: be careful about taking advice from experienced windbags like me.  Old formulas are probably outdated, maybe including the advice a few paragraphs above.  The old SaaS success stories went to market against on-premise business models.  Today the budding entrepreneur is rocking up against SaaS incumbents, so the attack vector and battle plan needs to look different. Moreover, the investment experience that I described just now covered the traditional VC route, whereas that model is getting partially displaced by other models such as crowdsourced equity investing.  There is a lot to learn in this space, so bounce your plans off of your trusted advisors and make sure you have your bases covered.

Good luck and God bless in your venture; I look forward to learning from your own experiences and successes before long!

Fear, Uncertainty, and Doubt: G Suite or Office365 (or both!)

It has been a while now since I have felt compelled to put pen to proverbial paper and write a blog. As experts in Cloud productivity tools, we base our go to market strategy on providing our clients choice. When it comes to workplace productivity platforms, that choice is typically G Suite or Office365. On-premise options are effectively dead.

Fear, uncertainty, and doubt (FUD) is a game that is played out by stakeholders in the workplace productivity ecosystem. We hear things like “Google G Suite is not secure” or “Microsoft doesn’t get the Cloud”. I’d like to declare once and for all that either G Suite or Office365 will get the job done with high availability and with a security posture that’s likely much better than what your company has today. Maybe a few years ago, this declaration would have been laughed at. However, we believe that technology choices have been democratized and either choice is a good one; this is regardless of whether your company is small business or a large enterprise. Even if your company operates in a highly regulated business, like Financial Services, I stand behind this (bold?) declaration.

Lately we have started to see an interesting new trend: we have a growing number of customers, big and small, who are looking to provide their employees with a choice of experience. In other words, letting the employee chose if they are more productive with G Suite or Office365. When you say these words out loud, I admit, it sounds a bit crazy. The ‘old school’ big bank IT guy in me gravitates to questions like “what about interoperability and total cost of ownership?” However, we need to remove the barriers from our past and think differently in order to continue to attract talent and remain relevant employers. Fear not, though, there are cost effective methods to make a ‘pick your productivity experience’ scenario work. Now that IS bold!

StrataPrime is pleased to offer our own employees a choice of platform. We’ve been doing this for years now without any interoperability issues. Most recently we’ve been helping one of North America’s largest banks conduct a proof of concept for operating in a mixed Office365/G Suite environment. What we’ve seen so far is some robust demand for productivity platform choice, particularly with younger employees and recent graduates.

If you’re looking to do something different at your company, in a way that can truly transform how your employees work, don’t let FUD in the marketplace determine your organization’s journey towards workplace change and innovation. Going all-in on Cloud with Office365, G Suite, or even a combination of both, are the best available options to accelerate workplace productivity and transformation. If you’re interested in figuring out how to attract the generation of talent and to transform how your employees work, please reach out to me on LinkedIn, or at paul.melnyk@strataprime.com.

Awareness Checklist

Your Strategic Journey is about to begin so make sure your target audience is on the bus.

I have seen both clients and companies create some really innovative strategies in answer to some of todays most disruptive trends. Each and every time I see significant investment made in both the defining of the strategic approach and the investment in the technology itself which is fantastic but more often than not the funding drops off when it comes to customer, colleague or partner awareness and or education. This never fails to amaze me because with out these people our strategy no matter how joined up and innovative will fall flat.

Having seen programmes and projects alike stall during deployment because lack of awareness or a mismatch in expectations I have created a check list which can be used for any end user impacting transformation initiative.

I hope that you get some value from this simple checklist to help you shape and build a rock solid vehicle that will help you gain the delivery success that your very expensive and well through out strategy deserves!

Submit this form to receive a link to download our free Awareness Checklist. We’ll never sell your information, or send you unsolicited email. Consult our privacy policy for more information.

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Content Just Lost its Crown

To support our rapid growth, we recently went through the process of building a new and modern website for StrataPrime. I can be somewhat obsessed about details and how things fit together, so I was very hands-on throughout the design, content and build phases. To say that the process was enlightening, is an understatement.

My age group (early 40s) was arguably the first to truly leverage websites as part of a company’s marketing strategy and brand. As a generalisation, I’d venture to say that most of my age peers in the Consulting industry have a preconceived notion about what a website should look like and what kind of information it should contain. I’ll call it the traditional view. This approach is to slam as much deep content as possible into multiple pages and menu items. As part of the effort to create the new strataprime.com I came to believe that there is a better way, regardless of industry.

Today, I believe that the best websites tell a story about a business. Unfortunately, most websites, especially older established companies, are still filled with deep and wide content that visitors (let’s be honest) never take the time to read. Microsoft recently published a study indicating that Canadians have an attention span of about 8 seconds. All jokes about Canadians aside, there is no reason not to extrapolate that finding to all countries with a high level of mobile and Internet adoption. I advocate that this study and result should drive our thinking when creating website design and content. Let’s face it very few people are going to read a 10 page case study posted to a website five menu layers deep.

The first step in our website transformation was for the team to question our existing beliefs about how a website should look for a company whose primary business is Consulting and Services. This is not an easy task since old habits really do die hard. As part of the process, I spent a lot of time researching the websites of similar companies. My hope was that someone else in our industry had already reinvented this wheel. However, I quickly realized that the vast majority of our competitors have websites with an overwhelming number of menu items and an inordinate amount of deep content. There were no simple and compelling stories to be found and, arguably, no modern visual design.

Since I was not happy with what I was seeing, I decided to look outside of our industry. I turned to modern tech startups like Uber for inspiration. When contrasting what Uber has done versus what is typical in our industry, there is a deep and wide chasm in the approach to content, design and visualisation. Maybe that is how it should be because Uber is in a completely different line of business…but I question if that is a real excuse barrier. In the spirit of pushing our image as a new and modern company, I decided that our vision for a website should look more like Uber and less like IBM regardless of our industry.

Now that we had a vision for the look and feel of our new website, the next step was to think differently about content. We did this by using the Microsoft study as our primary guideline for content creation: small bites of information that can be quickly digested and absorbed. In essence we learned how to say more with less words. The team laboured over each word and went through countless revisions. In the end, we may not have achieved a perfect result, but we were true to our vision.

When it comes to modern website design, I believe in less content and more story. The story should be simple and written in a way that makes the company’s products and services compelling. For similar companies to StrataPrime, the real objective for a website is to have customers and prospects seek you out for a conversation. An interactive discussion is always a much better platform to discuss value proposition than a website.

We know there is still much work to do as we iterate our own website and make improvements. We also know that individual preferences are subjective and not everyone in our industry (or outside of it) will like a modern design or high-level targeted content. Regardless, StrataPrime will remain committed to a website built upon a modern design philosophy…even though we are in an industry some may call old.

My Favourite Mobile Productivity Device

Last week the subject of my post was Chromebook and why manufactures are not making better Chromebooks (processor, display and build quality). I am pleased that I finally got my hands on Acer’s new Chromebook 13 with a 1080p display and the new Tegra K1 CPU. While the Acer Chromebook 13 is hands down the best pure Chromebook I have ever used it got me thinking about the best all-round mobile computing device. In my opinion, this honor goes to the Microsoft Surface Pro 3.

In my business, I have the pleasure of testing out all kinds of devices. For a tech enthusiast like myself, I often find that I am the proverbial kid in a candy store. How can work be so much fun!?! This year, I have been on a mission to find the ultimate productivity device to get real work done while on the go and away from my office. I have tried everything from convertible Windows tablets, devices that fold up like a tent, Chromebooks, Macbooks, iPad and the relatively new 12.2 inch Samsung Pro tablet. None of these devices matched up to all of my criteria: light, portable, at least 11.9 inch screen, minimum 1080p resolution, under $1,000, stable OS with no quirks getting in the way of productivity (sorry Samsung) and an above average build quality.

About 4 weeks ago, my Surface Pro 3 arrived. I ordered the base model with a keyboard cover. For astute readers, yes this came very close my threshold of $1,000, and it was the most expensive of the devices that I’ve tested this year (Canadian pricing). Even with the base specs of an Intel Core i3 processor, 4GB ram and 64GB of storage, the Surface Pro 3 runs flawlessly for business productivity. No, I have not tried playing Call of Duty on it…yet. The build quality is flawless and the screen is absolutely gorgeous. Having owned the first 2 iterations of the Surface, I can say that with version 3, Microsoft nailed it. The keyboard cover is now much stiffer and the typing angle is perfect using the magnetic fold up feature. The fully adjustable stand allows me to tilt the device at any angle for optimum viewing and typing no matter if I am sitting at a desk, or on a train.

From a productivity perspective, I spend a lot of time in both the Google Apps for Work and Office 365 ecosystems. I mainly use Office in the cloud and Google’s cloud based equivalents. I am mostly connected to the Internet at all times. For those rare times when I am without an Internet connection, my Google apps are synced locally to my device, and they work great. In fact, when working the Google ecosystem, I use Chrome in “Windows 8 Mode”, and, in this mode, my Surface Pro 3 becomes the best overall Chromebook I’ve ever used. What an amazing device.

A couple of quick notes to this post. Firstly, while I review and use most of the top tech toys, I refuse to accept money or loaner equipment from any manufacturer. My views are not influenced in any way. Secondly, this article is not intended to be a full review. Rather, my post is just summary of my impressions.

As always, thank you for reading.

Paul Melnyk
StrataPrime