October 20, 2020

A Hybrid Approach to Digital Transformation

In a discussion at Nasdaq’s virtual Technology of the Future (ToF) conference, Paul McKeown, Senior Vice President, Head of Marketplace Operators and New Markets, Market Technology, chatted with Splunk’s Susan St. Ledger, President, Worldwide Field Operations. The conversation covered the benefits of the cloud, observations from the field in working with customers in highly regulated industries, and how a hybrid cloud approach can help to jump-start a company’s digital transformation.

St. Ledger has been a proponent of software-as-a-service (SaaS) and cloud since 2004 – a time when many were skeptical about the technology’s potential. “People told me I was crazy – that cloud computing would never be adopted by large companies because it was not secure,” she said.

She joined Splunk in 2016 because the company was in the midst of taking its traditional on-prem software business to the cloud, and it was a great opportunity to work toward improving the perception of cloud security. Splunk is well-known across the IT, security and application development space as the “data to everything” platform that allows companies to investigate, monitor, analyze and act on their data.

Having gone through the transformation, St. Ledger has seen her customers reap significant benefits from the move to the cloud. Splunk releases new software every six weeks, so customers always have the latest version, enabling them to focus on their business instead of keeping infrastructure and security monitoring software up and running. Moreover, Splunk’s cloud customers have a 57% faster time to value, and a 47% improvement in their customer health score, which tracks several aspects of value. “Overall, the benefits are really clear,” she said. “It’s about that innovation, and it’s about the agility that our customers get.”

St. Ledger acknowledged that while there are early adopters, there are also always skeptics, and late bloomers, so it’s critical to get at the heart of customers’ concerns around security, compliance, total cost of ownership and the impact on jobs. To allay their concerns, Splunk created Autobahn, which allows them to try the cloud for a specific use case, and more than 80% of the customers convert that use case to the cloud after the trial. Customer references have gone a long way in overcoming reservations about the cloud as well. Potential customers can talk to other companies that are trying to solve similar problems in similar industries and learn about their experience.

Further, COVID has accelerated the digital journey for most of Splunk’s customers. “For those who did already have a plan, they’ve accelerated the plan, and for those who didn’t have a plan, they have one now,” said St. Ledger.

So how should companies prepare for a transition to the cloud? According to St. Ledger, it’s not practical for established companies to move everything to the cloud, so they will likely operate in a hybrid world for a long time. Beyond that, there are many ways to move to the cloud, and it takes prioritization and planning. Companies can lift and shift an existing application, refactor it, or re-architect it.

She recommends first moving critical applications that provide the most agility in running the business and re-architecting them to take advantage of all things cloud. Companies should then look at the velocity they get in a digital world and the competitive advantage that cloud enables. “All you need to do is look at the digital native companies that have sprung up over the course of the last 10 years, and look how quickly they evolve their business,” she said.

Companies need to think through the skill sets that they need. Splunk leveraged its legacy employees, hired people from the cloud world, and curated learning paths for them. For example, it leveraged LinkedIn Learning and also created an internal Cloud Heroes program so the sales team could become certified in their knowledge of cloud.

While information and cybersecurity are constantly making headlines, prospective cloud customers should take comfort that many others have delved deep into Splunk’s offerings and inspected its security and compliance. Few companies typically have that level of review in their own environment.

St. Ledger recommends that customers think about a multi-cloud strategy to avoid vendor lock-in, and they should think about neutral ways to run across clouds. For example, every cloud service provider has its own logging tool, which only works on their infrastructure. Splunk’s Log Management works across all cloud service providers’ platforms.

Finally, customers should (and can) avoid bearing double costs in hybrid situations where some operations are on-prem and others are in the cloud, or where operations are spread among multiple clouds. Many aspects of Splunk’s technology allow customers to operate on the data where it lives, so they don’t have egress costs. Some other vendors don’t take that approach, in which case customers should focus on which workloads go in which cloud.

With ToF breaking ground in its first digital format, and key themes around digitization, cloud, SaaS adoption, data and legacy transformation, Susan was the perfect addition to the ToF agenda. You can learn more about Splunk’s business by visiting www.splunk.com.

ToF 2020 Susan St. Ledger

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