Making the Hybrid Cloud Real and Tangible with IBM

I always enjoy and appreciate it when a client at a Bank, Financial Markets, or Insurance company asks me the following questions:

• Who is IBM today?
• What do you stand for?
• What is your strategy?
• Why are you relevant?

As much as this is sometimes a failure to understand, it is also a perfect opportunity to explain, share a perspective, and co-create a future direction. After resuming extensive travel to visit with clients in the second half of last year, that situation arose worldwide many times. In having these conversations, I chose not to use slides. Instead, we gathered around a board and shared a rainbow stack of erasable marker pens each time.

When these questions arise, I make my answer simple. IBM is the Hybrid Cloud and AI company that goes to market through Technology, Consulting, and our Ecosystem. At that moment, using the word Hybrid creates a much bigger conversation. Most participants in the technology marketplace defined the word Hybrid to suit their purpose or strengths. That is fair and understandable. However, it results in niched definitions that I’d suggest are incomplete.

There are two vital hybrid myths:

• Hybrid is infrastructure-centric. I'm afraid I have to disagree with this definition because the applications, not the infrastructure, are the primary source of business value. Automated software-defined infrastructure (compute, network, and storage) is essential but just one of the table-stakes piece parts. Infrastructure is only useful when it runs application platform workloads.
• Hybrid is simply running workloads on multiple clouds, also known as Multi-Cloud. This definition gets closer simply because workloads and applications could be used interchangeably. However, that definition still needs to be completed. A complete definition must encompass how applications or workloads are architected, coded, built, secured, deployed, and operated. Hybrid and Multi-Cloud are not interchangeable. Multi-Cloud should be considered an essential part of a more comprehensive Hybrid Cloud approach.

Let’s briefly step back and consider this in an industry context. I don’t think it necessary to comment extensively on the industry dynamics. These are all around us as we consume news daily and digest analyst reports from esteemed commentators. In a nutshell, it is becoming harder for financial services firms to make money and invest capital in their future. The pandemic, political stability, and inflation appear to be never-ending and are creating implications for how firms evolve and differentiate.

I agree with my friend and colleague, Shanker Ramamurthy , Global Managing Partner for Banking at IBM Consulting, that at the top level of each financial services firm, three CXO priorities are universal: Grow, Save, and Comply. They are self-explanatory:

• Growing is achieved through market-share, innovation, speed, profitability, differentiation, product reach, and customer experience.
• Saving is typically achieved by operational efficiency and the automation of every possible business, technology, and operational process.
• Complying spans the entire gamut of safety and soundness, including regulation, risk, resilience, and cyber-security.

Our experience at IBM is that every firm is focused on these. Most firms need help to do one or maybe two. However, it is almost impossible to do all three simultaneously using traditional approaches. Doing all three at once necessitates a new approach. We’ll get into that.

As a Financial Services Industry team, we’ve determined that firms can use each of four Imperatives to support the Grow, Save, and Comply priorities:

1. Re-Imagine Experience: Customers of every type demand a hyper-personalized approach guided by AI-infused insight with automated instant fulfillment. Experience for employees is also a lever in improving customer experience.
2. Environmental, Social, and Governance (ESG):?Complying with ESG regulations is becoming a top brand priority and requires accurate, granular data analysis to report and optimize consumption. Going beyond regulation brings the opportunity to create new ESG-infused products.
3. Resilience: Keeping mission-critical systems available, protected, and running, in the face of every kind of attack and outage is essential. Additionally, governments are moving fast to regulate operational practices. First is the protection against cyber-security attacks. Second to minimize the concentration risk associated with public cloud providers by demanding workload portability. Last is the emergent requirement for data and processing sovereignty.
4. Modernize: Modernizing seems like an approach to aging code and technical debt at face value. Yes, it is. However, the modernization opportunity is more extensive. Rather than modifying code, think about modernizing a firm through new ways of thinking, working, process, decision-making, culture, etc. At the center of modernization is the 'platformization' of financial services through business and industry-specific ecosystem platforms.

As we researched and formulated the Financial Services Imperatives, we understood that each contributes to the Grow, Save, and Comply priorities. Each is a valuable lever that can help a firm achieve all three simultaneously. The other essential component to successfully support our combination of priorities and imperatives is a Hybrid Cloud Platform.

To clarify the ‘why?’ and ‘what?’, let’s consider the essential elements of a Hybrid Cloud Platform. Central to a hybrid cloud platform are the following attributes:

• It is a new mindset, a new way of thinking, and working with new tools and techniques. A new architectural style underpins it. The essential building blocks are Agile, APIs, Microservices, Containers, Container Orchestration, DevSecOps, Site Reliability Engineering (SRE), and AIOps.
• It is Open. Yes, it is a given that it is built on open technologies. However, clients also achieve economic lift from embracing open ecosystems. BIAN (the Banking Industry Architecture Network) is a crucial example in our industry, presenting a radical opportunity to accelerate innovation and substitutable choice.
• Data, AI, and Security are inherent. Excluding data from a hybrid architecture is folly, as data and insight are the lifeblood of every application platform. Therefore, where data is located and how it is accessed and utilized matters enormously. AI will inform all future decision-making and support every operational practice. Security is often an afterthought in the architectural process. However, it cannot be in a hybrid environment.
• Application workloads can be deployed to any fit-for-purpose platform in any fit-for-purpose location, including public and private clouds, private data centers, and at the Edge. The security, operations, and governance practices are consistent across every site. IBM customers often ask how the IBM Z mainframe plays in the hybrid cloud. The simple reality is that it is a full participant at every level.

Why do these characteristics matter?

• The development cycle is massively accelerated, offering new levels of speed and agility. When we decouple monolithic code and rebuild with stateless microservices, we decouple from past limitations. A typical release cycle for a monolithic platform might be four or twelve times a year. However, with microservices and automated DevSecOps, we know institutions that deploy 200 changes daily without any outage. I’d argue that the value creation from innovation at the ‘speed of thought’ is reason enough to act and the primary source of economic lift.
• Operational costs greatly benefit. Container Orchestration with Kubernetes automatically scales Stateless microservices horizontally and vertically wherever deployed. Application environments can scale up and down automatically as demands dictate and always with availability. A consistent approach to automated operations and security minimizes dueling operating models introduced with every additional cloud provider.

Accelerating the application platform development cycle is essential to Grow, Save, and Comply. Customers always had the choice to build or buy their technology. However, in a constrained economic environment, there’s less discretion to invest capital in building function that is already readily available. IBM recognizes this and accelerates application development on a Hybrid Cloud via the Cloud Paks:

• The Cloud Pak for Data provides the extensive capabilities of a Data Fabric, including data virtualization, automated governance and privacy, a self-service catalog, and automated pipelines for trusted AI. Every AI-infused application, in other words, every future application, needs these capabilities.
• The Cloud Pak for Business Automation automates and monitors every workflow, decision, document-centric, and robotic process, with extensive process analysis and optimization capabilities.
• The Cloud Pak for Security protects hybrid environments using AI to provide extensive detection and response capabilities.
• The Cloud Pak for AIOps helps operations teams keep application platforms available using the most optimal resource footprint.

The entire Hybrid Cloud approach and the IBM Cloud Paks run on Red Hat OpenShift. This leading platform delivers the entire value chain outlined above, specifically the ability to build once and run anywhere. OpenShift runs everywhere clients choose and is offered as a fully automated managed service by IBM Cloud and IBM Cloud Satellite and IBM’s partners, AWS and Microsoft Azure.

However you choose to embrace the Hybrid Cloud, whether it is directly with IBM and Red Hat together or with our extensive ecosystem of Global Systems Integrators and Independent Software Vendors, we want you to have the best experience. We want to help you start the journey and deliver predictable value quickly.

We are ready to help. Customers are voting with their wallets, and the world is going hybrid with IBM .?#LetsCreate

Contact me, John Duigenan , or my team, Thad Vorozilchak , John Emmert , and Jennifer McComas to get started.