Cloud Reset – The Podcast | Episode 1: Breaking Free from Vendor Lock-in and Embracing Cloud Portability

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Episode Summary:

• Introduction to the podcast, Cloud Reset, focusing on “Straight Talk and Real Solutions” for IT decision-makers.
• Hosts Jonathan Staff and Naran McClung discuss their combined decades of experience in the Australian IT industry, including both vendor and customer perspectives.
• The importance of transparency and honesty when working with Managed Service Providers (MSPs) and vendors, especially regarding pricing and service value.
• A deep dive into vendor lock-in and its impact on businesses, highlighting the Broadcom takeover of VMware as a real-world example.
• Discussion on how businesses can avoid vendor lock-in by focusing on cloud portability and multi-platform strategies to remain agile and competitive.
• Real-life stories from the IT frontlines, illustrating challenges with cost optimisation and risk management in cloud environments.
• The rising pressure on CFOs in IT decisions, especially around managing cloud costs and ensuring compliance with emerging regulations.
• Insights into managing large-scale.
• IT projects, including the need for flexibility in responding to sudden price hikes or industry disruptions.
• Advice for business and IT leaders: redefine what “good” looks like by measuring workload portability and cloud agility.
  

Episode Transcript:

Welcome to Cloud Reset, the podcast that cuts through tech jargon, giving you no nonsense insights to IT decision makers. It’s straight talk, real solutions, and we’re your hosts. Naran McClung and Jono Staff. Let’s get into it.

Welcome to the very first episode of Cloud Reset, straight talk, real solutions. I’m here with my partner in crime, the fearless Naran McClung. Happy to be here. It’s going to be great. Okay. So why are we doing this podcast? Um, We’re kind of sick of the fluff. You and I are both on the front line. We meet with customers all the time.

Um, we have the good fortune of being across between the two of us, um, everything that goes through our business as well. Um, and we’re interacting with, um, all walks of life in terms of businesses, their problems, their pain points. And I reckon you and I can bring this thing to life and tell some stories.

I think that’s exactly what we’re going to do. I was trying to add up. I’m not sure, maybe we’re not too ashamed to admit it. How many years we’ve been doing this? If you combine it, I reckon, um, you’ve been doing it longer than I have. What? But let’s just say it’s long enough. And, uh, the thing that really intrigues me and keeps me interested in the Australian IT industry.

Especially on, you know, the vendor and provider side of the fence is just the, it’s like the Wild West out there. It’s changing all the time. I think it’s pretty hard for customers in Australian business to navigate. And I think between us, we’ve seen every version of every trap, bait and switch, incentive, crazy shenanigan, uh, that’s out there.

And I think what I’m looking forward to is bringing some of that to the surface. And hopefully we can help, uh, our listeners get more from the investments that they make in it. And. I guess get what they really deserve out of the Australian industry. So I’m hoping, I’m hoping that that’s what we can bring.

I think we can look, we’ve, we’ve been in the game for a little while. I’m not convinced that I’ve been in the game longer than you. That’s probably pretty similar. Um, I’ve been a customer. Um, so I’ve, I’ve worked on big transformation gigs as a punter, working with vendors. I’ve been a CIO in the past where I’ve been responsible for budgets and picking MSPs and vendors and, and, you know, Making those decisions on cost and, um, certainly having tech providers try to pull the wool over my eyes as well.

I’ve had that and now we’re an MSP, um, so we’re out there trying to, to add value and, um, and deliver, um, good service to customers as well. And I think, Taking all of that, and all our experiences, for me, one of the number one things, and I know you feel the same way, is just be open and transparent. And I love that about our business, as well.

It’s really interesting, I was originally attracted to, to tech, uh, because of change and problem solving. Um, slightly different, uh, way, and I actually started out as a network engineer. And, uh, I’ve only ever been in tech since, uh, actually since before I left school. Um, very, very fortunate. So the, the Australian industry means a lot to me.

And I started out actually working in IT for customers. Worked for some really large manufacturers and, and a few other interesting organizations. And, you know, I’m actually a network engineer. That was the first thing I did. And the thing that really was interesting to me was the sense of achievement when you’re able to solve a problem and when it means something to the business that you’re working for, you can get direct line of sight to the contribution that you’ve made and, and, uh, and feel successful.

And there’s always a new thing. There’s always a new opportunity to prove that and figure that out. And I get a lot of satisfaction out of that. And, um, probably that, that was almost, I would say now the, the first third of my career, the other two thirds have actually been, uh, in MSP land, providing those services, uh, back to Australian organisations.

And to your point around just how a good MSP should show up and, and how you create value, I think I still bring a lot of my, um, early experiences as a customer to try and inform me as to what good looks like. I know we both talk about this a lot, but we’re seeing when it’s done poorly as well. You know, and um, I think a big thing that I’m hoping we can bring to our listeners is some clarity and some, you know, stories from out in the market, some traps for young players, you know, and, and be really bring some transparency around that and, and, and tell some truths.

Yeah.

All right. Well, current events then we should, um, you know, it’d be remiss of us not to talk about some pretty topical things. I think in the last six months, there’s been some huge disruption Uh, in the tech industry and, uh, probably the thing at the top of my mind and, you know, a lot of customers and potential customers that we’re talking to, uh, want to talk about this and that is, uh, Broadcom’s takeover of VMware.

Yep. and what’s going on in the market. And, um, you know, there’s been a lot of people commenting on this probably, uh, when the news was pretty fresh. Yes. And I think there was a lot of acute pain with, you know, a lot of uncertainty and both customers and providers and MSPs and partners, uh, not really sure about what the future looked like in terms of how much they were going to have to spend or what product they were going to use.

Um, but we’re probably, I’d say nearly six months in now. The dust is settling and there’s some interesting developments. And I noticed in the press, uh, about a week ago, pretty interesting. Um, coming out of, uh, AT& T, uh, not in Australia, but you know, I think it’s in Europe, AT& T actually suing Broadcom over contract bullying.

Yep. Um, now that’s quite a interesting development. Look, we. We kind of saw this coming, really. I mean, there were obviously, there were rumblings in the market this sort of thing would happen. Um, I would say let’s be, let’s be really honest and transparent about our own business, right? I mean, we preside over one of the largest private clouds in the country.

Um, we had a long standing VMware relationship, and Broadcom absolutely disrupted our own customer base. You know, the way the economy’s been going and inflationary pressures, we’ve seen the price of pretty much everything go up. Yep. Um, And in a lot of cases, uh, you know, CPI increases, power’s gone up, licensing has gone up, you know, Microsoft’s issued a couple of price rises, but everybody’s sort of used to that.

This one felt very different. Well, it was material, wasn’t it? I mean, we weren’t talking about percentage points here, right? We’re talking about orders of magnitude for some customers on their licensing costs. And if it’s not budgeted, it’s probably coming at a cost of something else. And if we think like, you know, cost of living pressures, well, you know, cost pressures for businesses and these are businesses that are still trying to find budgets for improved security posture and, and security tooling and buying SOC services and all the things that were the previous hot topics in market.

I mean, what do we see two key drivers, cost and risk, right? So it was risk. And then all of a sudden for these customers, cost became a factor because Broadcom’s pulled the wool out from underneath. Yeah, it’s, it’s the rugs. It’s, uh, yeah, it’s pretty incredible. Like if you look at some of the recent data that’s been released around, uh, just economic growth in Australia, I think it’s some of the worst numbers we’ve seen since recession times in the early nineties.

So, you know, I know certainly the majority. of customers and potential customers I’m talking to are most interested first and foremost in how do they reduce their costs. That’s right. When it comes to IT and for a lot of these organizations IT is one of the biggest Costs items. Yep that they deal with outside of salaries and rent Just look at the life cycle of a deal John I that you that you and I work on right?

So firstly, we know that the timeline to close the deal is influenced by market confidence. We know that there’s more deliberation It takes longer it goes through more approvals I can’t remember the last time you and I worked on a deal that didn’t involve the CFO There was a time when that didn’t happen, right?

There was a time when there would be delegation underneath the CFO sufficient to get a contract signed. It’s pretty rare these days, isn’t it? Like the approvals seem to be going all the way to the top and the scrutiny on cost, and rightly so, is significant. Cost and risk. And funny, actually, risk tends to sit with the CFO as well if there isn’t a SISO in play.

So, um, these are interesting times. Yeah, that’s right. I think, um, I think, you know, a lot of providers would be doing well to be pivoting into that conversation and looking first and foremost in their own backyard, but also looking at how do you show up and create value for a customer. Yep. Right. And, uh, and certainly one of the big ticket items at the moment around value creation is cost optimization.

That’s right. You know, and reduction of risk. And if you’re not able to deliver that, I think you’re going to really struggle. Um, as an MSP or any, any kind of, you know, supplier on, on this side of the channel.

Um, it speaks a little bit as well. You know, we’ve got some recent customer stories, but, um, off the back of, you know, VMware sort of proving that anything can happen. Yeah, for me, that was a guy who’s been doing this nearly 20 years, was around when, um, we first started virtualizing servers. Uh, I’ve seen every iteration of infrastructure as a service and then hosting, and then we called it cloud and, you know, all the rest.

Um, it was interesting to me that you can, I don’t think anybody expected that level of disruption. And I think now, uh, astute organizations are going, you know, I’m not going to get caught out again. Um, and to me that’s driving a lot of the conversation around Uh, I don’t know, the term that I would, I would like to use is workload.

Portability. Yes. Especially this is particularly when it comes to cloud hosting and what’s going on in your data center, what’s going on with your mission critical application workloads and data. Um, I think that’s where a lot of the spend is, you know, if you look at an organization as a percentage of their spend, most of them are spending nearly, you know, 30 to 50 percent of what they spend on it is on this core stuff.

Yes. So it’s a big ticket item to look into. And those organizations are now, I think everybody’s now asking themselves, you know, um, what does, what does vendor lock in look like? What does cloud lock in look like? How does that show up in my business? What are the risks associated with that? Um, how do I avoid getting caught out again?

How do I drive more competition in my IT supply chain so I get a better, uh, Outcome, you know, there’s a there’s a lot of a lot of this now bubbling to the surface and that real catalyst was, was the Broadcom situation. Yeah, it’s interesting isn’t it? So it’s like, um, can you pull the ripcord? If you take, uh, what percentage of your workloads are locked into a particular platform or vendor, and do you have an exit strategy should something change?

It’s very interesting. Um, I mean we’ve seen this in the DR space and BCP as well, and we know that certainly some APRA, um, Um, regulated organizations have had a, um, a mandate to, to seek tertiary environments. You know, so can you run your operation in a tertiary environment distinct from your primary day to day environment?

Um, I’m wondering whether we’ll see greater influence of that. I’m wondering, you know, whether, whether VMware will force organizations to, or Broadcom, I should say, to consider, as you rightly say, the portability of workloads. You know, can you move your workloads somewhere else, should you choose to? Um, and what would stop you?

You know, when we do our, um, our sociability analysis, right, on workloads, particularly when we migrate workloads in, and in the last six months, migrating workloads out as well, uh, what groupings of workloads need to come together due to dependencies? And those dependencies can often be the reason why you can’t move something, particularly if they’re proprietary to a platform.

Um, so it’s an interesting space to be in, but I reckon it’s important and probably prudent on organisations to know how feasible would it be to completely change and upend where you’re hosted? And if you don’t have a good answer on that, you’re probably exposed to some risk. Yeah, I think that’s really evident.

I like one, One, um, very recent, uh, potential customer interaction, uh, really brought this to life for me. You know, and I know you’re involved as well. We spent a lot of time analyzing this customer’s environment and, um, you know, they’re, they’re, I would say, born in the cloud for, for, for, for, for, for, for, for, for, for, for, for, 50 or 60 percent of what they do and then there’s another, you know, 50 to 40 percent of that environment that’s just coming along for the ride.

Probably, probably not the best fit for that environment, but it’s there because Just the classic IaaS workloads. Yeah, and it’s just too hard to run it somewhere else and you know, um, and it’s all good. That’s the, the right decision to make. When they were scaling up, So when they were scaling up, it was really attractive to look at the revenue generating portion of their environment.

Um, in a way that, you know, I need, I need speed to turn it on, you know, like Hyperscale Cloud and particularly PaaS services became very, very attractive because you can turn it on fast. It scales with your revenue. Um, and you can keep up with demand and it’s really great. And you get this, um, It’s a classic hierarchy of needs, isn’t it?

Like, I mean, we talk about businesses that are in a purple patch, right? Yeah. Because they’re going through rapid growth. Now, what do you value most when you’re going through rapid growth? It’s the ability to, frankly, fire up services as fast as possible. And what a fantastic use case for the public cloud.

This ability to turn things on immediately. And I think it worked really well for them and, um, but the interesting predicament they’ve got themselves in now is that, well, two things. One, I think, you know, sales has softened, you know, revenue growth has softened, we’ve seen that across the market, we just talked about, um, the slow rate of economic growth and that, that hits everybody, everywhere, to some degree.

Um, And now there’s a real desire from that business to start looking at their, their margins and their profits. Well, let’s bring it to life. How do we actually make more money out of this thing if it’s not growing faster? We still need to grow our profit. Our shareholders demand it. Yes. We’ve got this interesting situation now.

Yeah. And the thing that was really apparent to me was they’re doing everything right. Yes, we looked under the bonnet and and this this this IT team are doing everything right savings plans Pulling all the right levers. They’re optimized. They’re turning stuff off when they’re not using it. They’re right sizing things You know actually doing a reasonable job of operating this thing but the thing You know, that, that strategy has been in place and they’ve got maturity around operating that environment.

They’ve scaled it over five years, six years, seven years. Um, but now when they’re faced with a new challenge and somebody says, hang on, strategy needs to change, right? We actually need to find a way of breaking that, that intrinsic link to revenue and costs to the cloud provider. They don’t really have a great answer.

No, not an easy answer anyway. It’s worse than that, right? So you’ve got. You’ve got, you know, arguably, you know, at the top of the economic buying tree, the board saying this is unsustainable. At the ground level, you’ve got a massive team of technical resources that have done an excellent job. I mean, no one’s arguing that the service architecture isn’t working.

No one’s going to argue that it didn’t satisfy the growth demand. It’s ticked all of those boxes when they were asked to optimise and achieve their KPIs to save monies and, and, and sorry, and Implement all the levers available to them within the constraints of the platform that they’re working in they have done that Problem is it’s still 30, right?

It’s still 30 percent of all new revenue, which is Unsustainable. Yeah, I think that’s right. I think the like if the you know, the current economic climate has taught us anything Inflationary pressures are teaching us anything you were entering into a new era I think of, of the cloud marketplace. Um, I look at, you know, the, some of the reports coming out on the size of the market in Australia and the share.

Um, I think Microsoft’s just overtaken share on infrastructure as a service against Amazon by about three or 4%. Uh, but between the two of them, they got about 70 percent of the infrastructure as a service market in Australia. Um, You know, I think if you read a textbook, you’ll call that a, uh, a duopoly.

You would. Um, that’s really interesting. But the, the thing that is now, I think, going to be the next wave of challenges for people who’ve gone all in, they’ve mastered cloud adoption, like this customer, they’re doing all the right things, all the right things. But that’s actually, that’s actually not the right thing anymore.

What’s right is changing. Yep. Right. And that’s going to be imposed upon every business. What I think what’s right is going to be choice and flexibility, workload, portability, the ability to actually, you know, if you’re operating in a dual duopoly, how do you create some competitive tension? That’s right.

How do you create competitive tension if you’re locked in? Yeah. Well, you’re not going anywhere. And also like. How can you offer some portability and some flexibility to move workloads that doesn’t compromise some of your key reasons for moving to the cloud in the first place? You’ve invested in the operational piece, you’ve invested in the right skills, how can you hang on to that yet have the freedom and flexibility to put workloads somewhere else that could allow you to enjoy a significant cost saving?

Yeah I think, and there’s going to be a bunch of things driving this too, it’s not just cost. it’s risk. I think you mentioned APRA before, um, you know, some of the new CPS, uh, 230, um, regulations or, you know, compliance items that you need to look at. A really interesting one that’s in there. I’ve had three or four conversations about this with different APRA regulated businesses.

Um, they go, well, actually we need a, we need a strategy to recover our environment outside of our primary. That’s right. Platform provider. The tertiary driver. Uh, you, you, I haven’t met a customer yet who’s ready to comply with that in earnest. Yes. I think it’s, it’s, it’s barely worth the paper it’s written on right now.

That’s right. It’s, it’s almost nigh on impossible. Yeah. Especially, especially if you’ve architected and, and rightly so, you know, done a great job. You’ve architected mission critical apps to leverage, um, vendor specific has offerings that they just don’t exist outside of that platform. Yes. Yes. So now you’ve got a lot of questions about re platforming, re architecting, what do containers do?

How does that work? So there’s a risk and compliance issue here as well. Yeah, that’s right. Look, I think, um, I don’t know, like the amount of customers that, will have a DR strategy yet never execute it and even even in the face of outage as well would be reluctant to really pull the trigger and move workloads and services to another environment.

You just don’t see it that often. Whereas customers of ours that have got, let’s say, a true hybrid architecture, um, with a consistent operational experience, have actually got the flexibility that they need. They know that they can move workloads, and yes, there will be some proprietary specific services that have to live where they live, but what percentage of workloads is that?

Right? You know, is it, is it, Is it 50 percent or is it really only 20 percent or 30 percent in which case having that freedom and flexibility to move the rest should you choose to and you may choose to do it day one but you may want to be able to do it at the drop of a hat should circumstances change and we go back to our original point with Broadcom and VMware, you know, can you face a challenge like that and do you have options or does it represent too significant a change for your business?

Yeah, I couldn’t agree more. Okay, so look. We’ve talked a good game here about cost and risk. Um, we’ve talked about the perils and the risk exposure being locked into any one provider. I guess now is probably a good time to talk about, well, what should organisations be doing, at least based on our experience and, you know, how do we mitigate this risk.

Yeah, I think this is so important and it’s going to be coming up again and again. If we just look at that previous, um, potential customer example, by all accounts, that teams do a great job of managing their environment. I think it’s going to be incumbent upon IT leaders to change what a great job looks like, right?

A great job needs to be all of those things, you know, great FinOps, great compliance, well architected environments, all of the good stuff. But we need to be incorporating a measure around the ability to run multiple platforms, the portability of your app, the ability to then leverage that to generate competitive tension in your supply chain.

give you options, the ability to pivot in response to new legislation or a huge price increase from your hypervisor vendor. Yes. Um, if you don’t have this level of portability baked into your environment and you’re not measuring that, measuring your teams on that in real time and setting proper targets around that and redefining.

What good looks like yeah, I think I think you’re gonna be a sitting duck It’s like a workload agility metric isn’t it like I mean if you think about the example that we were talking about there with the customer 30 cents on the dollar etc There they had a limited band of success their ability to affect any kind of cost improvement and optimization was Constrained by where they were which means they needed to look elsewhere Right, they came to us to help them to provide a, a platform plus one approach to that that didn’t compromise why they moved to cloud in the first place.

So it’s about cloud agility, and it’s not, look, I mean, this, this is not a new concept if we think about containerization. I remember when that was first born. You know, every, every, every vendor, every customer was saying, hey, listen, containerize your apps, move them anywhere, won’t be locked into any one provider, et cetera.

Problem is, you can’t containerize everything, and there’s a, there’s an overhead in doing so. And I’m not. I’m not poo pooing containerization, it has its place, it’s just not one size fits all. What we’re talking about here is at a higher level, right, and where if you have multiple platforms that can offer as a subset of service and capability, yes, containers may be one option, but it could be simply moving IaaS workloads to somewhere that’s more appropriate if they’re static.

For example, if they’re storage hungry, we know storage is expensive in the public cloud, for example, maybe there’s a better home. Right, maybe there’s a way to move like grouped, socially compatible sets of applications and services somewhere that is more cost effective and we’ve spent a lot of time working with prospects alike in recent times on that exact problem.

So to your point, Jono, it is measuring teams on their ability really to respond to external change and influence and having agility as a key metric and not just constrained by a single platform. It can’t be. Yeah, I think, I think the ability to adapt and overcome when you’re under pressure on cost and risk is, is something that, um, a lot of businesses aren’t really measuring.

Yes. And I think it’s, that’s, that’s the biggest takeaway for me. 

Take the opportunity to ask those hard questions. You know, if this happened again tomorrow, what would we do? How would we respond? And if, if you don’t get good answers, you need to change what good looks like. That’s right. Um, look, Every, uh, every time we do this podcast, I know we’re going to try and answer a question from our listeners.

Yeah. And, uh, there was actually a few to choose from for today, but I was really interested by one. I’m going to paraphrase it a little bit. It’s from an Australian CIO for a large multinational organization. Uh, he has the privilege of running the Australian region. Now, recently, Some changes have happened to his Microsoft agreement.

Yes. Uh, broadly speaking, the way that he used to engage with Microsoft directly, uh, was through, uh, a local team and an agreement that, uh, that he had signed and everything was set up. 

And, you know, I won’t go into the complexities around Azure tenancies and all the rest, but recently a decision was made.

Um, Uh, by a global, uh, account lead, I’m assuming at Microsoft to wrap up all the regions into one fantastic global agreement that was really attractive outside of Australia. Yeah. Yes. And it was signed and executed outside of Australia. And I think there’s been some unintended consequences. That’s right.

Talking to him around, you know, uh, and I’ll give you some of the commentary, Jono, um, I used to be able to talk to all these great people. Yes. They can’t talk to me anymore. Because the spend has left Australia and therefore all of those contact points are no longer relevant. I had some great technical guys that I relied on.

Yes. Um, they’re not on my account anymore. Yes. I’ve lost my account manager. Yes. I can’t access my tenancy. Et cetera, like, et cetera, et cetera. I remember this. And our, and, and, and, The conversation was that I am no longer in control of my costs as a result of it. So I had levers available to me, I had things, I had people that could help me solve problems, I had the visibility and the change, uh, effectiveness to do a good job and all of a sudden this is now, Opaque to me and I don’t have the same control anymore.

We’ve seen this a couple of times. It’s not often, but it does happen, you know, especially in the bigger end of town in the Australian market. A lot of, um, IT leaders are operating, you know, Australian divisions of quite large organizations. Um, how, you know, you’re, you’re the, the Microsoft, guy, SME in our business.

You got any advice for, for them? Well, firstly, like again, the two biggest drivers and market forces, cost and risk. And you take a customer who is absolutely happy with Microsoft and happy with what Azure was delivering for them and had nothing have changed, then nothing would have changed. They were perfectly happy.

Now, clearly I’m the Azure guy and I would say that, but we happen to know that that’s true. But because the ability to affect change on cost from this customer, they were looking for options. Now again, they didn’t want to compromise on all the investment in skills and certification and operational framework, etc.

And they looked to us to say, Listen, I need to be in control of my costs. I can’t change what’s happened with subscriptions and tenancies and all the stuff that moved at that, that global level. I can’t influence that much as I’ve tried. How can you help me? Because it’s more important for me to be in control of my costs than it is just about anything else.

I’d love to sort of double click on that. It’s a really interesting Like, I wonder how many How many Australian organizations who have a direct relationship with Microsoft, everything’s going well, doing good things in the cloud, in Azure, all good. How many of them would really be aware about the implications of the kind of agreement that they sign up to as it relates to compensation of Microsoft Teams, how they’re incentivized, the kind of behavior that they’re going to expect.

Because I really feel like this particular one, you know, it’s a, it’s a, it’s a, it’s a bigger version of common problems where you, you think you’re engaging in the right way. Yes. But are you, are you acutely aware of other ways you might be able to engage to, to procure the thing that you’re looking for?

Yes. That might be more conducive to, to a better experience for your business. I’ll give you an example, you know, the way you access and unlock different, uh, rebate and funding programs. Um, the different lines of business in Microsoft and how that works and how to really drive and get the best outcomes out of them.

You know, I think there’s a, there’s a big. Disconnect there. Well, it’s a big problem space. Firstly, um, it’s a little bit like trying to solve the licensing Problem space with Microsoft. God bless you, right? Complicated. Understanding the way incentives and credits and drivers and targets and how account managers measured and what are the key initiatives for ATSs and all the rest of it.

Now, we know that our best engagements that we deliver through a financial year on the Azure front are done with Microsoft, where we work hand in hand with Microsoft. Um, and I think we’re successful in doing that because we’re really open and transparent about how it works for us as an MSP and the incentives and drivers that we have, which translate to levers, right, levers on a deal, right, and things that help us.

Win a deal, certainly, make us more attractive commercially, but as well as ongoing too. And it goes back to, we were talking before about agility and the, and the freedom and flexibility to make changes as well. I know we’re really transparent about that and I know that when we talk about enterprise agreements versus CSP and the freedom and flexibility to move between those is critical as well.

And I think to your point, you know, it’s important that customers know, frankly, what drives Microsoft too. Right? They have targets. They have incentives. They’re given mandates on things to lean into. You know, at the moment it’s, it’s AI wins, for example. That’s one of the things that they’re really interested in.

Once you understand what drives them and what motivates them, you can really get the most out of them as well. And good Microsoft reps will be really open and transparent about that. I know that our working relationship with Microsoft and the way she, we show up to customers, we’re going to expose that anyway.

And I do wonder, you know, if you look at the Australian market, that’s at the, the. the big end of town and it’s a global, you know, decision and situation and there’s procurement departments and specialists involved. Um, most of the Australian market is a mid market size organization, but by comparison, they’re not ASX top, you know, 300 type organizations.

So we’re, we’re a smaller dynamic market in Australia. Um, what advice would you have for a mid market business who doesn’t have the a professional procurement person and department. To manage this process to understand like it’s there in in those organizations It’s their job to understand how to push those buttons Yeah, and get the most out of their suppliers if you don’t have that.

Yes, you know, do you have any advice for? For a customer who’s thinking about how have what kind of construct? Yeah, commercially they should be engaging with Microsoft Yeah, look it’s it’s It’s tricky, isn’t it? Because Microsoft will have its own rules on the size of the organisation, the number of users, etc, expected spend.

Uh, and there are so many different ways that you can, uh, present not just a commercial but a working relationship too. In some cases it may make perfect sense for the customer to engage directly. And do you know what? They may choose to. You know, it’s a little bit like religion sometimes, like when you and I both know that when we come across an organization that wants to engage directly, it’s just a control thing, right?

It’s maybe it’s something they’re used to from a previous life or job, etc. I’m not going to change their mind on that. I’m not going to say, hey, listen, please work with us and we’ll manage the Microsoft relationship for you. You’re not going to change their mind on that and nor should you. But I reckon it’s prudent upon us, certainly as a service provider, to lay it out as an option.

Say, look, you’ve got an EA path here, you’ve got an MCA path here, there’s a CSP path. Certainly as it relates to CSP, and I know that we open book everything, right? So we will say as a tier one direct CSP provider, um, this is the margin we play with. This is what it looks like. This is what we care about.

You know, we’re a managed service business. We want to retain you forever as a very happy managed services customer. And therefore. Um, we have the freedom, frankly flexibility to expose all of that to a customer and I think they appreciate that. But it’s tricky, you know, with Microsoft because there are so many different ways to present it and I think more often than not a customer will have a view on the direction that they want to go.

Um, it’s not always black and white either, so like us being a CSP provider for a customer doesn’t preclude the customer from having a direct working relationship, in fact quite the opposite. And I will, will help. You know, build those bridges, right? And expose them to people perhaps that they weren’t exposed to previously.

So, it’s very subjective. Um, there’s lots in it. Um, but openness, transparency, and if you’ve got a vendor who’s prepared to open the books and show you where all the credits are, all the incentives, you know, and again, if you can align to Microsoft’s drivers as well, you’ll get more from them. There’ll be programs, there’ll be special things, right?

And if you’re properly engaged, it’ll be obvious, it’ll be obvious. how you can untap those resources. Yeah, I think that that’s a great, great bit of advice. If I had to sum that up, I’d say, if you’re thinking about making some of these decisions, ask yourself and ask your team, do we know how to get the most and the best out of this relationship with Microsoft?

Jono, we’re going to wrap up episode one of Cloud Reset. We talked about a few things, disruption in market with VMware and Broadcom, uh, and just, All the pleasantries and unhappiness etc that goes along with that. I will say one thing, it’s obviously, it’s nice to see change as well. I hate it when it’s change that’s, you know, off the back of massive cost increase, particularly that’s unbudgeted for customers.

Nobody wants that. But certainly for those organisations out there, there are options. And it puts into frame the importance of having portability. We’ve talked about that as well. The fact that, you know, if you’re locked into any one platform, you have less options, right? And we talked about the example of our customer, 30 cents on the dollar going to the cloud provider is unsustainable for them going forward.

Having been through their purple patch and their growth phase, they’re now at a point where they’re They’re reconciling and they are deliberating on these decisions and they realise that actually by only having one platform available to them they don’t have the options they need to solve their economic problems going forward.

I think, which is critical. And then I guess the final piece we talked about is, um, and again, it comes down to change as well. You know, so the customer that we’re working with that had all their cost controls taken away from them, wasn’t their fault, you know, decision by Global to move costs and spend to a bucket outside of Australia meant that They’re close and intimate working relationship with Microsoft disappeared.

You take somebody’s cost control away from them. You know, you’re taking a core pillar of how they deliver success for their business away from them. And for this customer, and for no other reason, certainly no dissatisfaction with Azure as a platform, they’re looking for options because they can’t address cost, just like they could.

Couldn’t address risk either as a separate conversations, cost and risk, the two biggest drivers in market at the moment. So agility, I think you raised a really good point before talking about how do we measure the teams? You know, is, is your team measured on the ability to respond to market forces and change and external influences?

Uh, and if you’re not, maybe you should be. Yeah, look, couldn’t agree more. I think, uh, I think it’s been a really good conversation. 

You know, real customer stories really bring this to life. I think for me, the biggest thing that we need to be focused on, especially, especially right now, is value creation through the reduction of risk and the effective management of cost.

Yeah. When it comes to tech spend. Yeah. you know, that 

is the thing I think that’s going to move the needle for every organization. Yes. Look, that’s a wrap for our very first episode of Cloud Reset. Thanks everyone for sticking with us. I think we’ve only just scratched the surface. Um, you know, I think, I think things could get pretty controversial because we’re pretty open to taking questions from anybody about anything.

Um, so that could get dangerous. I’m looking forward to that. Uh, and don’t forget, you know, each episode, um, we’re going to be looking for the toughest. Questions to answer. That’s right. And look, please reach out to us. I mean, hopefully you’ve seen this perhaps via LinkedIn. If you have, connect with us, ask us questions.

Um, and make sure you subscribe because you need to get the alert for the next episode. Something that’s really on our mind. I’m excited to talk about, and that is AI washing. Feels like AI everything at the moment. Every vendor, every MSB’s promising the world with AI, Jono. 

Surely they can’t all be right.

Straight talk. Real things. That’s right. We’re going to get right into it. What have we done with AI? What are we seeing? What’s real? What’s cost effective? What isn’t? Let’s talk about all of it. I’m ready. I’m ready too. Yeah, buckle up. Let’s get crazy. Thanks again for tuning into Cloud Reset. We’ll be back next time with more straight talk and real solutions.

Advice for business and IT leaders: redefine what “good” looks like by measuring
workload portability
and
cloud agility