How Digital Transformation Navigates Disruption to Chart a Better Course to the New Normal

A discussion on how HPE Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging market opportunities.

Listen to the podcast. Find it on iTunes. Download the transcript. See the video. Sponsor: Hewlett Packard Enterprise.

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of Innovation podcast series.

Gardner

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this timely discussion on architecting businesses for managing ongoing disruption.

As enterprises move past crisis mode in response to the COVID-19 pandemic, they require a systemic capability to better manage shifting market trends.

Stay with us now as we examine how Hewlett Packard Enterprise (HPE) Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging opportunities.

Here to share the Pointnext view on transforming businesses to effectively innovate in the new era of pervasive digital business, is Craig Partridge, Senior Director Worldwide, Digital Advisory and Transformation Practice Lead, at HPE Pointnext Services. Welcome back, Craig.

Craig Partridge: Hey, Dana. Good to speak with you again.

Gardner: Craig, how has the response to the pandemic accelerated the need for comprehensive digital transformation?

Disruption demands digital solutions 

Partridge: We speak to a lot of customers around the world. And the one thing that we are picking up very commonly is a little bit counter-intuitive.

At the beginning of the pandemic -- in fact, at the beginning of any major disruption -- there is a sense that companies will put the brakes on and slow everything down. And that happened as we went through this initial period. Preserving cash and liquidity kicked in and a minimum viable operating model emerged. People were reluctant to invest.

Partridge

But as they now begin to see the shifting landscape in industries, we are beginning to see a recognition that those pivoting out of these disruptive moments the quickest -- with sustained, long-term viability built behind how they accelerate -- those organizations are the ones driving new experiences and new insights. They are pushing hard on the digital agenda. In other words, digitally active companies seem to be the ones pivoting quicker out of these disruptions -- and coming out stronger as well.

So although there was an initial pause as people pivoted to the new normal, we are seeing now acceleration of initiatives or projects, underpinned by technology, that are fundamentally about reshaping the customer experience. If you can do that through digital engagement models, you can continue to drive revenue and customer loyalty because you are executing those valued transactions through digital platforms.

Gardner: Has the pandemic and response made digital transformation more attractive? If you have to do more business digitally, if your consumers and your supply chain have become more digital, is this a larger opportunity?

Partridge: Yes, it’s not only more attractive – it’s more essential. That’s what we are learning.

A good example here in the UK, where I am based, is that big retailers have traditionally been deeply into the brick world experience of walking into a retail store or supermarket, those kinds of big, physical spaces. They figured out during this period of disruption that the only way to continue to drive revenue and take orders was on digital platforms. Well, guess what? Those digital platforms were only scaled and sized for a certain kind of demand, and that demand was based on a pre-pandemic normal.

This transformation is not just an attractive thing to do. For many organizations pivoting hard to digital engagement and digital revenue streams is their new normal. That's what they have to focus on -- not just to survive but for beyond that.

Now, they have to double or treble the capacity of their transactions across those digital platforms. They are having to increase massively their capability to not only buy online, but to get deliveries out to those customers as well.

So this transformation is not just an attractive thing to do. For many organizations pivoting hard to digital engagement and digital revenue streams is their new normal. That’s what they have to focus on -- and not just to survive but for beyond that. It’s the direction to their new normal as well.

Gardner: It certainly seems that the behavior patterns of consumers, as well as employees, have changed for the longer term when it comes to things like working at home, using virtual collaboration, bypassing movie theaters for online releases, virtual museums, and so forth.

For those organizations that now have to cater to those online issues and factor in the support of their employees online, it seems to me that this shift in user behavior has accelerated what was already under way. Do companies therefore need to pick up the pace of what they are doing for their own internal digital transformation, recognizing that the behaviors in the market have shifted so dramatically?

Safety first 

Partridge: Yes, in the past digital transformation focused on the customer experience, the digital engagement channel, and building out that experience. You can relate that in large parts to the shift toward e-commerce. But increasingly people are aware of the need to integrate information about the physical space as well. And if this pandemic taught us anything, it’s that they need to not only create great experiences – they must create safe, great experiences.

What does that mean? I need to understand about my physical space so I can augment my service offerings in a way that’s safe. We are looking at scenarios where using video recognition and artificial intelligence (AI) will begin to work out whether that space being used safely. Are there measurements we can put in place to protect people better? Are people keeping certain social distancing rules?

All of that is triggering the next wave of customer experience, which isn’t just the online digital platform and digital interactions, but -- as we get back out into the world and as we start to occupy those spaces again -- how do I use the insight about the physical space to augment that experience and make sure that we can emerge safer, better, and enjoy those digital experiences in a way that’s also physically safe.

Beyond just the digital transactions side, now it’s much more about starting to address the movement that was already long on the way -- the digitization of the physical world and how that plays into making these experiences more beneficial.

Gardner: So if the move to digitally transform your organization is an imperative, if those who did it earlier have an advantage, if those who haven’t done it want to do it more rapidly -- what holds organizations back? What is it about legacy IT architectures that are perhaps a handicap?

Pivoting from the cloud 

Partridge: It’s a great question because when I talk to customers about moving into the digital era, that triggers the question, “Well, what was there before this digital era?” And we might argue it was the cloud era that preceded it.

Now, don’t get me wrong. These aren’t sequential. I’m not saying that the cloud era is over and the digital era has replaced it. As you know, these are waves. And they rise on top of each other. But organizations that are able to go fast and accelerate on the digital agenda are often the same organizations.

The biggest constraint we see as organizations try to stress-test their digital age adoption is to see if they actually have agility in the back end. Are the systems set up to be able to scale on-demand as they start to pivot toward digital channels to engage their customers? Does a recalibration of the supply chain mean applications and data are placed in the right part of on- or off-premises cloud architecture supply chains?

The biggest constraint we see as organizations try to stress-test their digital age adoption is to see if they actually have agility in the back end. Are the systems set up to be able to scale on-demand as they pivot to digital channels to engage with their customers?

If you haven’t gone through a modernization agenda, if you haven’t tackled that core innovation issue, if you haven’t embraced cloud architectures, cloud-scale, and software-defined – and, increasingly, by the way, the shift to things like containerization, microservices, and decomposing big monolithic applications into manageable chunks that are application programming interface

(API)-connected -- if you haven’t gone through that cloud-enabled exploration prior to the digital era, well, it looks like you still have some work to do before you can get the gains that some of those other modern organizations are now able to express.

There’s another constraint, which is really key. For most of the customers we speak to, it tends to be in and around the operating model. In a lot of conversations that I have with customers, they over-invested in technology. They are on every cloud platform available. They are using every kind of digital technology to gain a level of competitive advantage.

Yet, at the heart of any organization are the people. It’s the culture of the people and the innovation of your people that really makes the difference. So, not least of all, the supply chain agility, right in the heart of this conversation. It is the fundamental operating model -- not just of IT, but the operating model of the entire organization.

So have they unticked their value chain? Have they looked at the key activities? Have they thought when they implement new technology, and how that might replace or augment activities? And what does that mean to the staff? Can you bring them with you, and have you empowered them? Have you re-skilled them along the way? Have you driven those cultural change programs to force that digital-first mindset, which is really the key to success in all of this?

Gardner: So many interdependencies, so much complexity, frankly, when we’re thinking about transacting across the external edge to cloud, to consumer, and to data center. And we’re talking about business processes that need to extend into new supply chains or new markets.

Given that complexity, tell us how to progress beyond understanding how difficult this all can be and to adopt proven ways that actually work.

Universal model has the edge 

Partridge: For everything that we’ve talked about, we have figured out that there is a universal model that organizations can use to methodologically go off into this space.

We found out that organizations are very quickly pivoting to exploring their digital edge. I think the digital agenda is an edge-in conversation. Again, I think that marks it out from the preceding cloud era, which was much more about core-out. That was get scale, efficiency, and cost optimization out of service delivery models in-place. But that was a very core-out conversation. When you think digital, you have to begin to think about the use case of where value is created or exchanged. And, that’s an edge-in conversation.

And we managed to find that there are two journeys behind that discussion. The first one is about deciding to whom you are looking to deliver that digital experience. So when you think about digital engagement, really caring passionately about who the beneficiary persona is behind that experience. You need to describe that person in terms of what’s their day-in-the-life. What pains do they face today? What gains could you develop that could deliver better outcomes for them? How can you walk in their shoes, and how do you describe that?

We found that is a key journey, typically led by kind of chief digital officer-type character who is responsible for driving new digital engagement with customers. If the persona is external to the customer, if it’s a revenue-generating persona, we might think of revenue as the essential key performance indicator (KPI). But you can apply similar techniques to drive internal personas’ productivity. So productivity becomes the KPI.

That journey is inspired by initiatives that are trying to use digital to connect to people in new, innovative, and differentiated ways. And you’ll find different stakeholders behind that journey.

And we found another journey, which is reshaping the edge. And that’s much more about using technology to digitize the physical world. So let’s hear about the experience, about business efficiency and effectiveness at the edge -- and using the insights of instrumenting and digitizing the physical world to give you a sense of how that space is being used. How is my manufacturing floor performing? The KPI is overall equipment effectiveness (OEE) in the manufacturing space and it becomes key. Behind this journey you’ll see big Industry 4.0-type and Internet of Things (IoT)-type of initiatives under way.

If organizations are able to stitch these two journeys together -- rather than treat them as siloed sandpits for innovation – and if they can connect them together, they tend to get compound benefits.

You asked about where the constraint comes in. As we said, it is about getting agility into the supply chain. And again, we’ve actually found that there are two connected journeys, but with very different stakeholders behind them, which drive that agenda.

We have a journey, too, that describes a core renovation agenda that will occupy 70 to 80 percent of every IT budget every year. It’s the constant need to challenge the price performance of legacy environments and constantly optimize and move the workloads and data into the right part of the supply chain for strategic advantage.

That is coupled with yet another journey, that of the cloud-enabled constraint and that’s very much developer-led more than it is led by IT. IT is typically holding the legacy footprint, the technical debt footprint, but the developer is out there looking to exploit cloud-native architectures to write the next wave of applications and experiences. And they are just as impactful when it comes to equipping the organization with the cloud scale that’s necessary to mine those opportunities on the edge.

So, there is a balance in this equation, to your point. There is innovation at the edge, very much line of business-driven, very much about business efficiency and effectiveness, or revenue and productivity, the real tangible dollar value outcomes. And on the other side, it’s more about agility and the supply chain. It’s getting that balance right so that I have my agility and that allows me to go and explore the world digitally at the edge.

So they sort of overlap. And the implication there is that there are three core enablers and they are true no matter which of the big four agenda items customers are trying to drive through their initiative programs.

In digital, data is everything 

Two of those enablers very much relate to data. Again, Dana, I know in the digital era data is everything. It is the glue that holds this new digital engagement model together. In there we found two key enablers that constantly come up, no matter which agenda you are driving.

The first one is surely you need intelligence from that data; data for its own sake is of no use, it’s about getting intelligence from that dataset. And that’s not just to make better decisions, but actually to innovate, to create differentiated value propositions in your market. That’s really the key agenda behind that intelligence enabler.

And the second thing, because we are dealing with data, is a huge impact and emphasis on being trusted with that data. And that doesn’t just mean being compliant to regulatory standards or having the right kind of resiliency and cybersecurity approach, it means going beyond that.

You need to gain intelligence from the data; data for its own sake is of no use, it's about getting intelligence for the datasets. And that's not just to make better decisions, it's to innovate and create differentiated value propositions in your market.

In this digitally enabled world, we want to trust brands with our data because often that data is now extremely personal. So beyond just General Data Protection Regulation

(GDPR) compliance, trust here means, “Am I being ethical? Am I being transparent about how I use that data?” We all saw the Cambridge Analytica-type of impact and what happens when you are not transparent and you are not ethical about how you use data.

Now, one thing we haven’t touched on and I will just throw it up as a bit of context, Dana. There is a consideration, a kind of global consideration behind all of this agenda and that’s the shift toward everything-as-a-service (EaaS).

A couple of key attributes of that consideration includes the most obvious one; it’s the financial flexibility one. For sure, as you reassemble your supply chain -- as you continue to press on that cloud-enabled side of the map -- what you are paying, what you consume, and doing that in a strategic way helps get the right mix in that supply chain, and paying only for that as you consume, is kind of obvious.

But I think the more important thing to understand is that our customers are being equally innovative at the edge. So they are using that everything-as-a-service momentum to change their industry, their market, and the relationship they have with their customers. It helps especially as they pivot into a digital customer experience. Can that experience be constructed around a different business model?

We found that that’s a really useful way of deconstructing and simplifying what is actually quite a complex landscape. And if you can abstract -- if you can use a model to abstract away the chaos and create some simplicity -- that’s a really powerful thing. We all know that good models that abstract away complexity and create simplicity are hugely valuable in helping organizations reconstruct themselves.

Gardner: Clearly, before the pandemic, some organizations dragged their feet on digital transformation as you’ve described it. They had a bit of inertia. But the pandemic has spurred a lot of organizations, both public and private, on.

Hopefully, in a matter of some months or even a few years, the pandemic will be in the rearview mirror. But we will be left with the legacy of it, which is an emerging business paradigm of being flexible, agile, and more productive.

Are we going to get a new mode of business agility where the payoff is it commensurate with all the work?

Agility augurs well post-pandemic 

Partridge: That’s the $6 million question, Dana. I would love to crystal ball gaze with you on that one because agility is key to any organization. We all know that there are constraints in traditional customer experiences -- making widgets, selling products, transactional relationships, relationships that don’t lend themselves to having digital value added to them. I wonder how long that model goes on for as we are experiencing this shift toward digital value. And that means not just selling the widget or the product, but augmenting that with digital capabilities, with digital insights, and with new ways of adding value to the customer’s experience beyond just the capital asset.

I think that was being fast-tracked before this global pandemic. And it’s the organizations now that are in the midst of doubling down on that -- getting that digital experience right, ahead of product and prices – that’s the key differentiator when you go to market.

And, for me, that customer experience increasingly now is the digital customer experience. I think that move was well under way before we hit this big crisis. And I can see customers now doubling down, so that if they didn’t get it right pre-pandemic, they are getting it right as they accelerate out of the pandemic. They recognize that that platform is the only way forward.

You will hear a lot of commentators talk about the digital agenda as being driven by what they call the platform-driven economy. Can you create a platform in which your customers are willing to participate, maybe even your ecosystem of partners who are willing to participate and create that kind of shared experience and shared value? Again, that’s something that HPE is very much invested in. As we pivot our business model, to EaaS outcomes, we are having to double down on our customer experience and increasingly that means digitizing that experience through that digital platform agenda.

Gardner: I would like to explore some examples of how this is manifesting itself. How are organizations adjusting to the new normal and leveraging that to a higher level of business capability?

Also, why is a third-party organization like HPE Pointnext Services working within an ecosystem model with many years of experience behind it? How are you specifically gearing up to help organizations manage the process we have been describing?

HPE digital partnerships 

Partridge: This whole revolution requires different engagement models. The relationship HPE shares with its customers is becoming a technologically enabled partnership. Whenever you partner with a customer to help advance their business outcomes, you need a different way to engage with them.

We can continue to have our product-led engagement with customers, because many of them enjoy that relationship. But as we continue to move up the value stack we are going to need to swing to more of an advisory-led engagement model, Dana, where we are as co-invested in the customers’ outcomes as they are.

We understand what they are trying to drive from a business perspective. We understand how technology is opening up and enabling those kinds of outcomes to be materialized, for the value to be realized.

A year ago, we set out to reshape the way we engage with customers around this conversation. To drive that kind of digital partnership, that means sitting down with a customer and to co-innovate, going through workshops of how we as technologists can bring our expertise to the customer as the expert in their industry. Those two minds can meld to create more than one plus one equals two. By using design thinking techniques and co-design techniques, we can analyze the customers’ business problem and shape solutions that manufacture really, really big outcomes for our customers.

For 15 years I have been a consultant inside of HP and HPE and we have always had that strong consulting engine. But now with HPE Pointnext Services we are gearing it around making sure that we are able to address the customers’ business outcomes, enabled through technology.

Never has there been a time when technology has been so welded into a customer's underlying value proposition. ... There has never been a more open-door policy from our partners and customers.

And the timing is right-on. Never has there been a time when technology has been so welded into a customer’s underlying value proposition. I have been 25 years in IT. In the past, we could have gotten away with being a good partner to IT inside of our customer accounts. We could have gotten away with constantly challenging that price and performance ratio and renovating that agenda so that it delivers better productivity to the organization.

But as technology makes its way into the underlying business model -- as it becomes the differentiating business model -- it’s no longer just a productivity question. Now it’s about how partners work to unlock new digital revenue streams. Well, that needs a new engagement model.

And so that’s the work that we have been doing in my team, the Digital Advisory and Transformation Practice, to engage customers in that value-based discussion. Technology has made its way into that value proposition. There has never been a more open-door policy from our partners and customers who want to engage in that dialogue. They genuinely want to get the benefit of a large tech company applying itself to the customers’ underlying business challenges. That’s the partnership that they want, and there is no excuse for us not to walk through that door very confidently.

Gardner: Craig, specifically at HPE Pointnext Services, what’s the secret sauce that allows you to take on this large undertaking of digital transformation?

Mapping businesses’ DX ambition

Partridge: The development of this model has led to a series of unique pieces of intellectual property (IP) we use to help advance the customer ambition. I don’t think there has ever been a moment in time quite like this with the digital conversation.

Customers recognize that technology is the fundamental weapon to transform and differentiate themselves in the market. They are reaching out to technology partners to say, “Come and participate with me using technology to fundamentally change my value proposition.” So we are being invited in now as a tech company to help organizations move that value proposition forward in a way that we never were before.

In the past, HPE’s pedigree has been constantly challenging the optimization of assets and the price-performance, making sure that platform services are delivered in a very efficient and effective way. But now customers are looking to HPE to uniquely go underneath the covers of their business model -- not just their operating model, but their business model.

Now, we are not writing the board-level strategy for digital ambition because there is a great sweet spot for us, rather it’s where customers have a digital North Star, some digital ambition, but are struggling to realize it. They are struggling to land those initiatives that are, by definition, technology-enabled. That’s where tech companies like HPE are at the forefront of driving digital ambition.

So we have this unique IP, this model we developed inside of HPE Pointnext Services, and the methodology of how to apply it. We can use it as a visualization tool, as a storytelling tool to be able to better communicate, and onward to further communicate your businesses’ digital ambitions.

We can use it to map out the initiatives and look at where those overlap and duplications occur inside organizations. We are truly looking at this from edge to cloud and as-a-service -- that holistic side of the map helps us unpick the risks, dependencies, and prerequisites. We can use the map to inspire new ideas and advance a customer’s new thinking about how technology might be enabled.

We can also deploy the map with our building blocks behind each of the journeys, knowing what digital capabilities need to be brought on-stream and in what sequence. Then we can de-risk a customer’s path to value. That’s a great moment in time for us and it’s uniquely ours. Certainly, the model is uniquely ours and the way we apply it is uniquely ours.

But it’s also a timing thing, Dana. There has never been a better time in the industry where customers are seeking advice from a technology giant like HPE. So it’s a mixture of having the right IP, having the right opportunity, and the right moment as well.

Gardner: So how should such organizations approach this? We talked about the methodology but initiating something like this map and digital ambition narrative can be daunting. How do we start the process?

How to pose the right questions 

Partridge: It begins by understanding a description of this complex landscape, as we have explored in this discussion. Begin to visualize your own digital ambition. See if you can take two or three top initiatives that you are driving and explore them across the map. So what’s the overriding KPI? Where does it start?

Then ask yourself the questions in the middle of the map. What are the key enablers? Am I addressing a shared intelligence backbone? How am I handling trust, security, and resiliency? What am I doing to look at the operating model and the people? How is the culture central to all of this? How am I going to provide it as-a-service? Am I going to consume component parts of the service? How to stress over into the supply chain? How is it addressing the experience?

HPE Pointnext Services’ map is a beautiful tool to help any customer today start to plot their own initiatives and say, “Well, am I thinking of this initiative in a fully 360° way.”

If you are stuck, come and ask HPE. A lot of my advisors around the world map their customers initiatives over to this framework. And we start to ask questions. We start to unveil some of the risks and dependencies and prerequisites. As you put in more and more initiatives and programs, you can begin to see duplication in the middle of the model play out. That enables customers to de-risk and be quicker to path of value because they can deduplicate what they can now see as a common shared digital backbone. Often customers are running those in isolation but seeing it through this lens helps them deduplicate that effort. That’s a quicker path to value.

We engage customers around one- to two-day ideation workshops. Those are very structured ways of having creative, outside-of-the-box type thinking and putting in enough of a value proposition behind the idea to excite people.

We do a lot around ideation and design thinking. If customers have yet to figure out a digital initiative, what’s their North Star, where should they start? We engage customers around one- to two-day ideation workshops. Those are very structured ways of having creative, outside-of-the-box-type thinking and putting in enough of a value proposition behind the idea to excite people.

We had a customer in Italy come to us and say, “Well, we think we need to do something with AI, but we are not quite sure where the value is.”

Then we have a way of engaging to help you accelerate, and that’s really about identifying what the critical digital capabilities are. Think of it at the functional level first. What digital functions do I need to be able to achieve some level of outcome? And then get that into some kind of backlog so you know how to sequence it. And again, we work with customers to help do that as well.

There are lots of ways to slice this, but, ultimately, dive in, get an initiative on the map, and begin to look at the risks and dependencies as you map it through the framework. Are you asking the right questions? Is there a connection to another part of the map that you haven’t examined yet that you should be examining? Is there a part of the initiative that you have missed? That is the immediate get-go start point.

Gardner: I’m afraid we will have to leave it there. We have been examining how to better architect businesses for not only managing ongoing disruption, but to get to a new and better way of doing business.

And we have learned how HPE Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging market opportunities.

So please join me in thanking our guest, Craig Partridge, Senior Director Worldwide, Digital Advisory and Transformation Practice Lead at HPE Pointnext Services. Thank you so much, Craig.

Partridge: Thanks, Dana. It was great fun speaking to you again.

Gardner: And thanks as well to our audience for joining this sponsored BriefingsDirect Voice of Innovation Discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of HPE-supported discussions.

Thanks again for listening. Please pass this along to your IT community and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. See the video. Sponsor: Hewlett Packard Enterprise.

A discussion on how HPE Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging opportunities. Copyright Interarbor Solutions, LLC, 2005-2020. All rights reserved.

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How REI Used Automation to Cloudify Infrastructure and Rapidly Adjust its Digital Pandemic Response

Transcript of a discussion on how REI kept its digital customers and business leadership happy using rapidly adaptable IT infrastructure, even as the world around them was suddenly shifting.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of Innovation podcast series.

Gardner

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on IT infrastructure automation and efficiency.

Like many retailers, Recreational Equipment, Inc. (REI) was faced with drastic and rapid change when the COVID-19 pandemic struck. REI’s marketing leaders wanted to make sure that their online e-commerce capabilities would rise to the challenge. They expected a nearly overnight 150 percent jump in REI’s purely digital business.

Fortunately REI’s IT leadership had already advanced their systems to heightened automation, which allowed the Seattle-based merchandiser to turn on a dime and devote much more of its private cloud to the new e-commerce workload demands.

Stay with us as we learn how REI kept its digital customers and business leadership happy, even as the world around them was suddenly shifting.

To explore what works for making IT agile and responsive enough to re-factor a private cloud at breakneck speed, we’re joined by Bryan Sullins, Senior Cloud Systems Engineer at REI in Seattle. Welcome to BriefingsDirect, Bryan.

Bryan Sullins: Thanks, Dana. I appreciate it and I’m happy to be here.

Gardner: When the pandemic required you to hop-to, how did REI manage to have the IT infrastructure to actually move at the true pace of business? What put you in a position to be able to act as you did?

Digital retail demands rise 

Sullins: In addition to the pandemic stay-at-home orders a couple months ago, we also had a large sale previously scheduled for the middle of May. It’s the largest sale of the year, our anniversary sale.

Sullins

And ramping up to that, our marketing and sales department realized that we would have a huge uptick in online sales. People really wanted to get outside, because people could go outside without breaking any of the social distancing rules.

For example, bicycle sales were up 310 percent compared to the same time last year. So in ramping up for that, we anticipated our online presence at rei.com was going to go up by 150 percent, but we wanted to scale up by 200 percent to be sure. In order to do that, we had to reallocate a bunch of ESXi hosts in VMware vSphere. We either had to stand up new ones or reallocate from other clusters and put them into what we call our digital retail presence.

As a result of our fully automated process, using Hewlett Packard Enterprise (HPE) OneView, Synergy, and Image Streamer, we were able to reallocate 6 out of the 17 total hosts needed. We were able to do that in 18 minutes, all at once -- and that’s single touch, that’s launching the automation and then pulling them from one cluster and decommissioning them and placing them all the way into the digital retail clusters.

We also had to move some from our legacy platform, they aren’t at HPE Synergy yet, and those took an additional three days. But those are in transition, we are moving through to that fully automated platform all around.

Gardner: That’s amazing because just a few years ago that sort of rapid and automated transition would have been unheard of. Even at a slow pace you weren’t guaranteed to have the performance and operations you wanted.

If you were not able to do this using automation – if the pandemic had hit, heaven forbid, five or seven years ago – what would have been the outcome?

We needed to make sure we had the infrastructure capacity so that nothing failed under a heavy load. We were able to do it in the time-frame, and be able to get some sleep.

Sullins: There were actually two outcomes from this. The first is the fairly obvious issue of not being able to handle the online traffic on our rei.com retail presence. It could have been that people weren’t able to put stuff into a shopping cart, or inventory decrement, and so on. It could have been a very broad range of things. We needed to make sure we had the infrastructure capacity so that none of that fails under a heavy load. That was the first part.

Gardner: Right, and when you have people in the heat of a purchasing moment, if you’re not there and it’s not working, they have other options. Not only would you lose that sale, you might lose that customer, and your brand suffers as well.

Sullins: Oh, without a doubt, without a doubt.

The other issue, of course, would have been if we did not meet our deadline. We had just under a week to get this accomplished. And if we had to do this without a fully automated approach, we would have had to return to our managers and say, “Yeah, so like we can’t do it that quickly.” But with our approach, we were able to do it all in the time frame -- and be able to get some sleep in the interim. So it was a win-win.

Gardner: So digital transformation pays off after all?

Sullins: Without a doubt.

Gardner: Before we learn more about your journey to IT infrastructure automation, tell us about REI, your investments in advanced automation, and why you consider yourself a data-driven digital business?

Automation all the way 

Sullins: Well, a lot of that precedes me by quite a bit. Going back to the early 2000s, based on what my managers tell me, there was a huge push for REI become an IT organization that just happens to do retail. The priority is on IT being a driving force behind everything we do, and that is something that, at the time, REI really needed to do. There are other competitors, which we won’t name, but you probably know who they are. REI needed to stay ahead of that curve.

So since then there have been constant sweeping and cyclical changes for that digital transformation. The most recent one is the push for automating all things. So that’s the priority we have. It’s our marching orders.

Gardner: In addition to your company, culture, and technology, tell us about yourself, Bryan. What is it about your background and personal development that led you to be in a position to act so forthrightly and swiftly?

Sullins: I got my start in IT back in 1999. I was a public school teacher before that, and then I made the transition to doing IT training. I did IT training from 1999 to about 2012. During those years, I got a lot of technology certifications, because in the IT training world you have to.

I began with what was, at the time, called the Microsoft Certified Solutions Expert (MCSE) certification. Then I also did the Linux Professional Institute. I really glommed on to Linux. I wanted to set myself apart from the rest of the field back then, so I went all-in on Linux.

And then, 2008-2009-ish, I jumped on the VMware train and went all-in on VMware and did the official VMware curriculum. I taught that for about three years. Then, in 2012, I made the transition from IT training into actually doing this for real as an engineer working at Dell. At the time, Dell had an infrastructure-as-a-service (IaaS) healthcare cloud that was fairly large – 1,200-plus ESXi hosts. We were also responsible for the storage and for the 90-plus storage area network (SAN) arrays as well.

In a large environment, you really have to automate. It's been the focus of my career. I typically jump right into new technology.

In an environment that large, you really have to automate. I cut my teeth on automating through PowerCLI and Ansible. Since then, about 2015, it’s been the focus of my career. I’m not saying I’m a guru, by any means, but it’s been a focus of my career.

Then, in 2018, REI came calling. I jumped on that opportunity because they are a super-awesome company, and right off the bat I got free reign over: if you want to automate it, then you automate it. And I have been doing that ever since August of 2018.

Gardner: What helped you make the transition from training to cloud engineer?

Sullins: I typically jump right into new technology. I don’t know if that comes from the training or if that’s just me as a person. But one of the positives I’ve gotten from the training world is that you learn a 100 percent of the feature base that’s available with said technology. I was able to take what I learned and knew from VMware and then say, “Okay, well, now I am going to get the real-world experience to back that up as well.” So it was a good transition.

Gardner: Let’s look at how other organizations can anticipate the shift to automation. What are some of the challenges that organizations typically face when it comes to being agile with their infrastructure?

Manage resistance to cloud 

Sullins: The challenges that I have seen aren’t usually technical. Usually the technology that people use to automate things are ready at hand. Many are free; like Ansible, for example, is free. PowerCLI is free. Jenkins is free.

So, people can start doing that tomorrow. But the real challenge is in changing people’s mindset about a more automated approach. I think that it’s tough to overcome. It’s what I call provisioning by council. More traditional on-premises approaches have application owners who want to roll out x number of virtual machines (VMs), with all their particular specs and whatnot. And then a council of people typically looks at that and kind of scratches their chin and says, “Okay, we approve.” But if you need to scale up, that council approach becomes a sort of gate-keeping process.

With a more automated approach, like we have at REI, we use a cloud management platform to automate the processes. We use that to enable self-service VMs instead of having a roll out by council, where some of the VMs can take days or weeks roll out because you have a lot of human beings touching it along the way. We have a lot of that process pre-approved, so everybody has already said, “Okay, we are okay with the roll out. We are okay with the way it’s done.” And then we can roll that out in 7 to 10 minutes rather than having a ticket-based model where somebody gets to it when they can. Self-service models are able to do that much better.

But that all takes a pretty big shift in psychology. A lot of people are used to being the gatekeeper. It can make them uncomfortable to change. Fortunately for me, a lot of the people at REI are on-board with this sort of approach. But I think that resistance can be something a lot of people run into.

Gardner: You can’t just buy automation in a box off of a shelf. You have to deal with an accumulation of manual processes and habits. Why is moving beyond the manual processes culture so important?

Sullins: I call it a private cloud because that means there is a healthy level of competition between what’s going in the public cloud and what we do in that data center.

The public cloud team has the capability of “selling” their solution side-by-side with ours. When you have application owners who are technically adept -- and pretty much all of them are at REI -- they can be tempted to say, “Well, I don’t want to wait a week or two to get a VM. I want to create one right now out on the public cloud.”

There is a healthy level of competition between what's going in the public cloud and what we do in the date center. We offer our customers a spectrum of services. And now they can do that in an automated way. That's a big win.

That’s a big challenge for us. So what we are trying to accomplish -- and we have had success so far through the transition – is to offer our customers a spectrum of services. So that’s great.

The stakeholders consuming that now gain flexibility. They can say, “Okay, yeah, I have this application. I want to run it in the public cloud, but I can’t based on the needs for that application. We have to run it on-premises.” And now they can do that in an automated way. That’s a big win, and that’s what people expect now, quite honestly.

Gardner: They want the look and feel of a public cloud but with all the benefits of the private cloud. It’s up to you to provide that. Let’s find out how you did.

How did you overcome the challenges that we talked about and what are the investments that you made in tools, platforms, and an ecosystem of players that accomplished it?

Sullins: As I mentioned previously, a lot of our utilities are “free,” the Ansibles of the world, PowerCLI, and whatnot. We also use Morpheus to do self-service and the implications behind automating things on what I call the front end, the customer face. The issue you have there is you don’t get that control of scaling up before you provision the VM. You have to monitor and then roll it out on the backend. So you have to monitor for usage and then scale up on the backend, and seamlessly. The end users aren’t supposed to know that you are scaling up. I don’t want them to know. It’s not their job to know. I want to remain out of their way.

In order to do that, we’ve used a combination of technologies. HPE actually has a GitHub link for a lot of Ansible playbooks that plug right in. And then the underlying hardware adjacent management ecosystem platform is HPE OneView with HPE Synergy and Image Streamer. With a combination of all of those technologies we were able to accomplish that 18-minute roll-out of our various titles.

Gardner: Even though you have an integrated platform and solutions approach, it sounds like you have also made the leap from ushering pets through the process into herding cattle. If you understand my metaphor, what has allowed you to stop treating each instance as a pet into being able to herd this stuff through on an automated basis?

From brittle pets to agile cattle 

Sullins: There is a psychological challenge with that. In the more traditional approach – and the VMware shop listeners are going to be very well aware of this -- I may need to have a four-node cluster with a number of CPUs, a certain amount of RAM, and so on. And that four-node cluster is static. Yes, if I need to add a fifth down the line I can do that, but for that four-node cluster, that’s its home, sometimes for the entire lifecycle of that particular host.

With our approach, we treat our ESXi hosts as cattle. The HPE OneView-Synergy-Image Streamer technology allows us to do that in conjunction with those tools we mentioned previously, for the end point in particular.

So rather than have a cluster, and it’s static and it stays that way -- it might have a naming convention that indicates what cluster it’s in and where -- in reality we have cattle-based DNS names for ESXi hosts. At any time, the understanding throughout the organization, or at least for the people who need to know, is that any host can be pulled from one cluster automatically and placed into another, particularly when it comes to resource usage on that cluster. My dream is that the robots will do this automatically.

So if you had a cluster that goes into the yellow, with its capacity usage based on a threshold, the robot would interpret that and say, “Oh, well, I have another cluster over here with a host that is underutilized. I’m going to pull it into the cluster that’s in the yellow and then bring it back into the green again.” This would happen all while we sleep. When we wake up in the morning, we’d say, “Oh, hey, look at that. The robots moved that over.”

Gardner: Algorithmic operations. It sounds very exciting.

Automation begets more automation 

Sullins: Yes, we have the push-button automation in place for that. It’s the next level of what that engine is that’s going to make those decisions and do all of those things.

Gardner: And that raises another issue. When you take the plunge into IT automation, you are making your way down the Chisholm Trail with your cattle, all of a sudden it becomes easier along the way. The automation begets more automation. As you learn and grow, does it become more automated along the way?

Sullins: Yes. Just to put an exclamation point on this topic, imagine the situation we opened the podcast with, which is, “Okay, we have to reallocate a bunch of hosts for rei.com.” If it’s fully automated, and we have robots making those decisions, the response is instantaneous. “Oh, hey, we want to scale up by 200 percent on rei.com.” We can say, “Okay, go ahead, roll out your VM. The system will react accordingly. It will add physical hosts as you see fit, and we don’t have to do anything, we have already done the work with the automation.” Right?

But to the automation begetting automation, which is a great way of putting it, by the way, there are always opportunities for more automation. And on a career side note, I want to dispel the myth that you automate your way out of a job. That is a complete and total myth. I’m not saying it doesn’t happen, where people get laid off as a result of automation. I’m not saying that doesn’t happen, but that’s relatively rare because when you automate something, that automation is going to need to be maintained because things change over time.

The other piece of that is a lot of times you have different organizations at various states of automation. Once you get your head above water to where it's, “Okay, we have this process and now it's become trivial because it's been automated.” We can now concentrate on automating either more things -- or you have new things that need to be automated. And whether that’s the process for only VMs, a new feature base, monitoring, or auto-scaling -- whatever it is -- you have the capability of from day one to further automate these processes.

Gardner: What was it specifically about the HPE OneView and Synergy that allowed you to move past the manual processes, firefighting, and culture of gatekeeping into more herding of cattle and being progressively automated?

Sullins: It was two things. The Image Streamer was number one. To date, we don’t run PXE boots infrastructure, not that we can't, it’s just not something that we have traditionally done. We needed a more standard process for doing that, and Image Streamer fit that and solved that problem.

The second piece is the provided Ansible playbooks that HPE has to kick off the entire process. If you are somewhat versed in how HPE does things through OneView, you have a server profile that you can impose on a blade, and that can be fully automated through Ansible.

Image Streamer allows us to say, "Okay, we build a gold image. We can apply that gold image to any frame in the cluster." We needed a more standard process, and Image Streamer solved that problem.

And, by the way, you don’t have to use Image Streamer to use Ansible automation. This is really more of an HPE OneView approach, whereby you can actually use it to do automated profiles and whatnot. But the Image Streamer is really what allows us to say, “Okay, we build a gold image. We can apply that gold image to any frame in the cluster.” That’s the first part of it, and the rest is configuring the other side.

Gardner: Bryan, it sounds like the HPE Composable Infrastructure approach works well with others. You are able to have it your way because you like Ansible, and you have a history of certain products and skills in your organization. Does the HPE Composable Infrastructure fit well into an ecosystem? Is it flexible enough to integrate with a variety of different approaches and partners?

Sullins: It has been so far, yes. We have anticipated leveraging HPE for our bare metal Linux infrastructure. One of the additional driving forces and big initiatives right now is Kubernetes. We are going all-in on Kubernetes in our private cloud, as well as in some of our worker nodes. We eventually plan on running those as bare metal. And HPE OneView, along with Image Streamer, is something that we can leverage for that as well. So there is flexibility, absolutely, yes.

Coordinating containers 

Gardner: It’s interesting, you have seen the transition from having VMware and other hypervisor sprawl to finding a way to manage and automate all of that. Do you see the same thing playing out for containers, with the powerful endgame of being able to automate containers, too?

Sullins: Right. We have been utilizing Rancher as part of our coordination tool for our Kubernetes infrastructure and utilizing vSphere for that. So we are using that.

As far as the containerization approach, REI has been doing containers before containers was a big thing. Our containerization platform has been around since at least 2015. So REI has been pretty cutting edge as far as that is concerned.

And now that Kubernetes has won the orchestration wars, as it were, we are looking to standardize that for people who want to do things online, which is to say, going back to the digital transformation journey.

Basically, the industry has caught up with what our super-awesome developers have done with containerization. But we are looking to transition the heavy lifting of maintaining a platform away from the developers. Now that we have a standard approach with Kubernetes, they don’t have to worry so much about it. They can just develop what they need to develop. It will be a big win for us.

Gardner: As you look back at your automation journey, have you developed a philosophy about automation? How this should this best work in the future?

Trust as foundation of automation 

Sullins: Right. Have you read Gene Kim’s The Unicorn Project? Well, there is also his The Phoenix Project. My take from that is the whole idea of trust, of trusting other people. And I think that is big.

I see that quite a bit in multiple organizations. For REI, we are going to work as a team and we trust each other. So we have a pretty good culture. But I would imagine that in some places that is still big challenge.

And if you take a look at The Unicorn Project, a lot of the issues have to do with trusting other human beings. Something happened, somebody made a mistake, and it caused an outage. So they lock it up and lock it away and say only certain people can do that. And then if you multiply that happening multiple times -- and then different individuals walking that down -- it leads to not being able to automate processes without somebody approving it, right?

Gardner: I can't imagine you would have been capable, when you had to transition your private cloud for more online activity, if you didn’t have that trust built into your culture.

Sullins: Yes, and the big challenge that might still come up is the idea of trusting your end users, too. Once you go into the realm of self-service, you come up on the typical what-ifs. What if somebody adds a zero and they meant to only roll out 4 VMs but they roll out 40? That’s possible. How do you create guardrails that are seamless? If you can, then you can trust your users. You decrease the risk and can take that leap of faith that bad things won’t happen.

Gardner: Tell us about your wish list for what comes next. What you would like HPE to be doing?

Small steps and teamwork rewards 

Sullins: My approach is to first automate one thing and then work out from there. You don’t have to boil the ocean. Start with something small and work your way up.

As far as next steps, we want auto scaling a physical layer and having the robots do all of that. The robots will scale up and down our requesters while we sleep.

We will continue to do application programming interface (API)-capable automation with anything that has a REST API. If we can connect to that and manipulate it, we can do pretty much whatever automation we want.

We are also containerizing all things. So if any application can be containerized properly, containerize it if you can.

As far as what decision-making engine we have to do the auto-scaling on the physical layer, we haven’t really decided upon what that is. We have some ideas but we are still looking for that.

Gardner: How about more predictive analytics using artificial intelligence (AI) with the data that you have emanating from your data center? Maybe AIOps?

Sullins: Well, without a doubt. I, for one, haven’t done any sort of deep dive into that, but I know it’s all the rage right now. I would be open to pretty much anything that will encompass what I just talked about. If that’s HPE InfoSight, then that’s what it is. I don’t have a lot of experience quite honestly with InfoSight as of yet. We do have it installed in a proof of concept (POC) form, although a lot of the priorities for that have been shifted due to COVID-19. We hope to revisit that pretty soon, so absolutely.

Gardner: To close out, you were ahead of the curve on digital transformation. That allowed you to be very agile when it came time to react to the COVID-19 pandemic.  What did that get you? Do you have any results?

Sullins: Yes, as a matter of fact, our boss’s boss, his boss -- so three bosses up from me -- he actually sits in on our load testing. It was an all-hands-on-deck situation during that May online sale. He said that it was the most seamless one that he had ever seen. There were almost no issues with this one.

We had done what we needed on the infrastructure side to make sure that we met dynamic demands. It was very successful. We went past our goals, so it was a win-win all the way around.

What I attribute that to is, yes, we had done what we needed on the infrastructure side to make sure that we met dynamic demands. Also, everybody worked as a team. Everybody, all the way up the stacks, from our infrastructure contribution, to the hypervisor and hardware layer, all the way on up to the application layer and the containers, and all of our DevOps stuff. It was very successful. We went past our goals of what we had thought for the sale, so it was a win-win all the way around.

Gardner: Even though you were going through this terrible period of adjustment, that’s very impressive.

Sullins: Yes.

Gardner: I’m afraid we’ll have to leave it there. We have been exploring how REI faced drastic and rapid IT demand shifts when the COVID-19 pandemic struck. And we have learned how an embrace of digital business transformation, highly automated systems operations, and a modern ecosystem of platforms and advanced technology solutions saved the day.

So please join me in thanking our guest, Bryan Sullins, Senior Cloud Systems Engineer at REI. Thank you, Bryan.

Sullins: Thanks, Dana. And shameless plug, if I may.

Gardner: Please.

Sullins: My personal blog is thinkingoutcloud.org and I encourage people to go there, because the how-to on how we accomplish much of what we talked about here I have blog posts for there. And you can contact me at @RussianLitGuy on Twitter.

Gardner: And thanks as well to our audience for joining this sponsored BriefingsDirect Voice of Innovation discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of HPE-supported discussions.

Thanks again for listening. Please pass this along to your IT community, and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Transcript of a discussion on how REI kept its digital customers and business leadership happy, even as the world around them was suddenly shifting. Copyright Interarbor Solutions, LLC, 2005-2020. All rights reserved.

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