An Approach to Cloud-Native Modernization at Cloud Native Now 2024

Hello, everyone. My name is Hari Kalala, and I'm today talking about cloud native modernization. As you know, cloud related journeys have been adopted by so many organizations across multiple industries.

So today I'm going to give you a flavor of how to do, uh, a cloud modernization and how to think about it by considering your key objectives such as you, you want to improve your total, uh, return on investment, you want to reduce your total cost of ownership. There are different facets of modernization, and I'm going to try my best to bring a structure to you given the time we have, because modernization could mean so many things to so, uh, so many other individuals, right? So, uh, and again, it's a journey of innovation.

So you are never really done with modernization. So the key aspects that we are going to cover today are what do top level executives really look for, right? And then I'm going to look at, help you understand why modernization is so important.

Some of the industry projections from Gartner and other studies, I'm gonna briefly allude to those, followed by what's the business value of modernization? Why should you really care? Right?

And then specifically in the, in the context of cloud native modernization, it's not just technology. It's, uh, there are few other facets to it, just the applications and the infrastructure and the cloud operating models. If your operating model, uh, models are not cloud na, then your org in itself cannot achieve the desired benefits that you would want to achieve, right?

And then followed by, I'm gonna dive deep a little on incremental and application modernization from the cloud native standpoint, right? Then followed by, we are going to close out by giving you back some, uh, points that you have learned, right? So, and, and then I, I just don't want this to be a, a, a death by PowerPoint.

So, so I have, I've tried to keep as many visuals as possible. And then what I'm going to do is, uh, try to do a, a, a revision of slides, a a quick recap of slides so that you know where you are, and then, uh, you, you're welcome to please ask me questions on, on the chat. So, and I'll try my best to respond to, uh, the questions and very brief about me, right?

So I'm an enterprise architect with the Amazon Web Services. I'm based outta San Francisco area, and I've been with the company for over four years, and I have had the distinguished privilege of working with some of the, some of the greatest customers, uh, right? And then my passion areas are, uh, yes, of course, modernization, migrations, uh, resilience in cloud, followed by serverless.

Serverless is another extreme form of modernization where you completely, uh, uh, it's, it's, you completely refactor in cloud, you depend on cloud-based services, right? Some of you might have heard of these, right? I'm, I'm very passionate about enabling AWS and other general customers to achieve their modernization objectives successfully, right?

And then in the process, I have learned a lot. I felt like I have, I have some clarity in my mind, and when I go to a lot of people, and I feel like the discussion, um, that is, that the clarity in thinking is not there, and that's the effort that I'm trying to make here. Okay?

Um, then the biggest thing is, uh, how customers want to achieve economic value, whether it's customers or within your organization or within your leadership, whether it's your senior director or vp or senior vp or CT or someone wants, um, value from your modernization initiatives. How, how should you position it, right? Okay, let's dive deep.

So, so what I'm thinking is to, to paint a picture properly, right? So let's take a hypothetical industry, CIO. So you have, uh, a industry, CIO, let's call her Marcia, and she's responsible for IT infrastructure and digital transformation initiatives that support her enterprise goals, right?

Her key goals are, as always, any key, any big leader always has few key goals. One is improve the economic value. How, how can I generate, uh, generate more return on investment and reduce my total cost of ownership and improve customer experience?

Everyone has similar goals, right? So now, uh, currently there are challenges. Uh, there are, she's unable to meet her, uh, business objectives, as you can imagine, in a customer experience field, there are so many different plethora of systems, right?

So if you walk through the journey, Marcia receives a call from our CEO regarding customer escalations. The problem is servers provisioning is taking too long. When server provisions met takes too long, then, then the growing customers cannot be met with their needs, right?

So, and then, uh, and now why is that? So they have, uh, uh, there's a shortage of resident skills. The cloud, uh, cloud requires certain way of, um, of architecting your systems.

So, and when, when the application is attempting to scale, it's, it's crashing because cloud requires thinking around horizontal scaling, right? And then as a result, there are project delays. The project status is in red, and Marsha is on call with her, um, team driving resolution, and she receives expensive invoice from technology providers.

At times, I have seen customers coming back and saying, Hey, your cloud budget is just too high. So it's a combination of everything too high is very subjective, as long as you're meeting your business objectives. That's the underlying goal that everyone wants, right?

So as a result, what she observed was, uh, well, her valuable time is spent, she's not able to meet her, uh, goals, lot of cost incurred, right? So, so that's a perspective of one industry, CIO. Now, let's, let's go, let's dive deeper, right?

So why do we need modernization? Modernization can come to come to Marsha's rescue. So the process of modernization, I'm, I'm trying to level set because there are multiple definitions of modernization in the industry, is the process of transforming existing applications and infrastructure into something that will give you a greater value, right?

So cloud native services is a means to achieve greater value. So, so that, so that you can, you can deliver value for your customers quickly, frequently, and smartly, while creating value for your own organization, right? If you're external facing organization, then, then you're adding value to your customers.

But if you're internal still, you are adding value for yourself, which is things like reduction in total cost of ownership, uh, increase in your return on investment. So just to paint, paint a picture, this is from McKinsey's study recently, market opportunity for companies that go beyond cloud migration. I'm gonna touch upon migration and modernization.

See this very closely, right? It's roughly 3 trillion. And further a few, uh, different trends that I wanted to touch upon, uh, companies, as per Gartner projections, companies will continue to spend more than $435 billion in 2024, right?

This is modernization. There are so many facets to work in Cloud data, ai, gen, AI, modernization, and everything. Modernization underpins every other work, and there's a subtle difference to migration, right?

So I'm gonna once again emphasize why you should do this, right? So, tr trying to categorize, I'm trying to categorize, as you can see in this slide, technology and business technical goals. You want to scale to millions of users.

You wanna make sure that your app is globally available. You have your increasing set of users in, say, APAC or probably some other region. You want to make them make your users quickly available, right?

You want to spin up your new servers, new regions, new availability zones in the, in these areas. Cloud will come and help you, right? Then you want to respond to your customer's needs within milliseconds, and you wanna be able to handle petabytes of data, large data volume, right?

So these are your goals and business goals, again, uh, R-O-I-T-C-O, we have sp we have spoken about. And one of the very, very important goals is business agility. What, what that really means.

Your, your organization is nimble enough to make changes to any needs, right? And that comes with if you have a decentralized architecture. So that's, that's very important.

Yeah. Centralized traditional architectures, when everything is clu cluttered together, you will take much longer to, uh, to make any changes. Why?

Because if any changes that happens, then you have to test the whole system, right? So, um, okay, so we'll move on. So, so how were to take a quick ten second recap.

What did we do so far? We, we painted a picture on why modernization? What's the value of modernization?

Why should we consider, what are the industry projections on modernization, right? So now let's look at how does a modern digital enterprise look like, right? Any typical company technology, if you see any digital business enterprise is at the core of it.

Now, if you consider this as your, your technology, uh, probably your technology realm, then you have front-end capabilities. You have applications and platforms, right? Which are enabling those front-end capabilities.

And then you have technology workforce, right? Technology workforce, and you have processes and the workflow orchestration systems. And then, uh, and then you have, uh, and these, these all entities put together give you a technology outcome, which can be improving operational excellence, cost optimization, improving security, and several others, right?

We spoke about those. Now, these technology, um, capabilities are enabling your digital transformation. Digital transformation is all about providing more improved business objectives to your customers than, uh, than you have business analysts, which are represented by the business workforce, and multiple business analysts enable work together to, and they formulate a business process, right?

And then what do they want? They want business outcomes. Typically, business says that, hey, it, can you deliver something fast, quick at lower cost?

That friction always remains, right? So if you see in this industry and what is driving this, there are some work streams underneath that can enable to drive this whole digital and, um, business and technology combined landscape, right? You need innovation, you want modernization.

You want a rock solid foundation, right? So I guess, uh, you're with me on this, so I'll continue to move. So now, if you really look at dive deeper, you may be thinking, Hey, why am I painting so many different, um, perspectives?

Or, um, why am I talking about all this? If you, if you dive deeper further that the, the concept of modernization can pro can really belong in any of these areas. One is business process modernization.

So that means you're, you're modernizing your business processes. Then if you come to your, on the, on the technology side, you have something called platform modernization. I'm sure you've heard of this, right?

Then, uh, once you go deeper into platform, into the applications, whether you build monolithic services, mainframes, or event driven systems, or probably microservices, right? These all can be constituted within application modernization. Now, further, if you go down, you have frontend capabilities, which are a, any front-end reactors or, or are any other means of communicating with your external end users, external or internal.

That is front end. Now, you want to modernize your front end. So there is a front-end modernization piece, right?

And then your co your company, how, how your company operates. There is something called operating model, right? How, how does your, for example, your QA team interacts with your, with your application team.

So if you, if traditionally, if those, if this, um, your organization is still intertwined, and they, there, there, there's, there are big walls between those in such a way that, uh, there's not a lot of communication, then, uh, then there's a room for improvement in your operating model as well, right? So now let's, let's do this further, right? So, so what happens with modernization, modernization initiatives can be expensive, right?

Okay. So I want, I wanted to, uh, emphasize that. So on day one, let's say if you're on, if you're on-premise, then you are hosted on cloud.

Then as you are managing on cloud manage, then you go further to cloud native. So yeah, some applications you can directly jump to cloud native, but if you are making gradual progression, then you will notice that your total cost of operations gradually comes down. It's not a day one observation, right?

Your business agility, your innovation is going up. So typically, depending upon the complexity of projects, you can see, probably within two to three years, you will start seeing value in those in the, for your investment in o in other words, what you, what you are paying for the project and what the payoff that you are observing from, from the investment in these projects, your return on investment and the economic value you are generating, uh, at, not, not right away. You will not see that right away, right?

And again, it depends on the size of the project and, uh, uh, what's the portion of the, of your application where you are realizing, right? So I'm probably considering, uh, multiple applications, uh, probably line of business. So, okay, yeah.

Now, uh, I painted the picture of different kinds of modernization. Let's walk into a scenario where you have so many different applications, right? So now, where do I start my modernization from?

There's a process called application portfolio rationalization. You probably have heard of this, right? Where then what you do, we are gonna dive deeper into this, but I'll provide you a brief summary.

What you do in this is you're going to do a high level assessment on where my, uh, where, where my applications are, what are their capabilities in, in a very, very methodical process, right? Then once you, once you figure, figure out your applications, then you do, Hey, am I going to migrate them or am I gonna modernize them? There is subtle difference here.

Migration and modernization. I've seen this confusion in the industry. So migration would mean you are moving your applications and workloads with almost no or minimal changes, right?

You, so you're doing, yeah, I'm gonna touch upon the seven Rs, rehost, reallocate, or even re-platform. You can consider that modernization would mean that you're, you're bringing fundamental changes, uh, to the, to the architecture, to the structure of your application, right? So now let's, let's look at further innovation, right?

So you can drive innovation in the form of new revenue streams, new markets, new capabilities. That's another form of modernization where you're modernizing your entire business itself. Which the goal in this talk is not to dive deeper into, into business model innovation, because that's, that's contextual.

We are gonna focus on cloud native modernization, right? Then application and technology architecture, I think this is absolutely important. Once you have application, what are some of the patterns in which, uh, we are going to the, in, in which you can do, uh, cloud native modernization, right?

So, A, B, DE, very, very important is enterprise operating model modernization, because operating models also need to align with cloud, cloud, cloud based way of thinking. Okay? So four key areas, application, portfolio rationalization, migrations and modernization, application and technology architectures, cloud native modernization, and enterprise operating model modernization, right?

So you, you guys are with me, right? So let's dive deeper, deeper, further. So application portfolio rationalization.

So in this, what happens, you, you can, you can see the screen here, right? On the left, you have bunch of applications on-prem or in the legacy world, they all talk to each other. You can see this in very small and on the right, the goal is to come back and say that, hey, we have picked specific projects out of those, right?

So there is a, there is a structured way of doing this. So what we do is we, we assess the initial, initially your, your current landscape, what are all the applications that are involved, right? And then based on their criticality and based on their, uh, certain criteria.

So you can probably look at certain products called TSO, logic migration Evaluator. There are other projects, products such as, um, current cogent and, uh, um, modelize it. And, uh, there are several, several others you can, uh, you can search for these.

So what they do is that they can run either with agent or agentless, you get data, and then based on that, uh, and by doing necessary interviews with the business stakeholders, you come out with something called a seven R strategy, right? So, and then of course you have as output, you, as you can see here, very clearly, we have documentation you prioritize and make, make sure that the, the applications that you want to modernize are aligned with your business objectives, right? So, and then, um, and then make sure that we come out with the seven R strategy.

Now, let's dive deeper into what is seven R strategy. So why do we do this application portfolio ization? I will come to this slide because after probably a couple of slides, we will go back, but let, because we were talking about seminar strategy, let's talk about it and then we'll go back.

Okay? So, so yeah, seven key aspects by which you can do modernization, migration, and modernization. So you, you analyze that, hey, based on the current state, there are some applications that can be moved to cloud as is, right, as is, because you don't have to make much changes to them.

So now, the, the by by which you can quickly realize business benefits. When you take something and just move as is, then you quickly realize value without any additional, uh, right? So these fall under the category of rehost.

Now, I want to touch upon the category of ree. Re relocate is a scenario where you have VMware based workloads running. So you can move directly to VMware on cloud.

You might want to check with your, um, your, um, licensing requirements and, uh, reseller requirements. And because these change very often, so that's relocate, right? So, so rehost and relocate, pretty much, you can consider them as, as ease you are moving.

So once that is done, then let's, let's look at these, these folks in, in the last, right? Sorry. Then, uh, you might want to decide that, hey, some of my applications are, um, how do I wanna move them to the cloud?

They, you can retire them. And then some of the applications you want to, you wanna just retain them on-prem, no value moving them to cloud. Why?

Why do I want to spend more money, right? You, you call them retain. Now, some of those applications, you want to, you want to sify them, such as you built a, let's say a homegrown CRM system, which is, uh, monolithic in nature.

You're spending more money than the rate at which you can fix any bugs or adding new features. Then you might want to consider properly taking a SaaS based implementation, right? There are so many, um, out of the box SaaS software that's available, um, Salesforce and others, right?

For CRM. So that's just one example I picked. Now, let's gradually come back to re-platform and re factor.

So re-platform are those scenarios where you, you think that you, you're running it on-prem, but you, you want to make some operating, some, uh, operating system changes, right? Let's say, uh, you are running, for example, you're already on cloud, say, traditional EC2 instance. In the case of AWS, now you want to achieve, uh, obtain greater price performance with, with graviton.

So you move to graviton based in instances, and that would require some kind of replatforming effort. Right? Now, I'm, I'm talking about refactor.

Refactor requires greater effort. Refactor would require, would mean, let's say you're running on-prem on bare metal, and you want to run them on containers, right? And then you want to probably break your monolith down to microservices, right?

So that would be an example of re refactor, right? So if you really see a reho, so trying to paint a picture, migrations are typically cost savings. Play modernization are typically gen, um, revenue generation play because running, let's say migrations, you, you want to move to the cloud, you wanna quickly, quickly save, uh, save cost and um, and take on simpler DevOps and all that work.

Yes, that's typically right. And there are exceptions to, to this of course. And as you can see that, uh, 30 to 40%, probably even 50% of the workloads in a typical enterprise can go, can, can adopt rehost and relegate strategies, whereas re refactors it requires a lot of thinking.

Can can go from a, a refactor and replatform anywhere from 10 to 20%, right? I hope that's clear for everyone. Migrate and modernize.

What's the subtle difference? And where modernization comes in, we're gonna dive deeper into, into modernization, but we just touched upon, um, how, how do you figure out which applications to modernize, which applications to migrate, what to do with this, right? I, I think that's the, that's what we just went through.

Cool. So now, yeah, I'm not gonna go through much on this. Beware, I I just wanted to paint this picture and tell you that you can do migration, but you're still not going to get, um, the benefits that cloud fully offers, which is ability to scale dynamically, uh, ability to make changes very quickly.

Um, if your application is still monolith on, on-prem and you migrate them to cloud, it's still monolith. Monolith, right? So, uh, if you want to make changes fast, uh, you won't be able to horizontal scaling, you probably may not be able to there.

Yeah, right? So as you can see on-prem, legacy has all these problems. Cloud native, you really want to get to the cloud native, which is, I think we touched upon, right?

Serverless and, uh, the cloud, managed cloud capabilities only then you are going to really get those, those desired cloud benefits, right? So yeah, we spoke upon this, uh, about this. Now, I'll, I'm gonna drive further.

So this is exactly the point I was just mentioning. Legacy, modernization and innovation. So monolith you have, you, you decided, okay, either I'm gonna retire or retain.

You can go step one. There are multiple, uh, paths of going to cloud. You can run your, your entire application on, in, on, on your infrastructure as a service provided by, by, by, uh, hyper um, cloud providers, right?

You can, for example, in AWS, you run them on EC2, you can move to managed, um, you can run them on RDS or you can run them on, um, on graviton instances, right? But that's underlying architecture. How about your application in itself?

3 that I'm referring to, which is cloud native architecture where you have broken down your applications into microservices, and that those are running as lambda services, Lambda functions, right? Lambda functions have several other benefits as well. We don't have much time.

I cannot go through, I can talk a lot on that. So now further, when you, when you reach cloud native, that's when you are going to enable, you can enable your true innovation, uh, be able to achieve greatest return on investment for yourself, right? So, um, yeah, so I want to touch upon Martin Fowler strangler pattern where you gradually create a new system around the edges of the, of a old system, right?

Letting it grow slowly. You cannot achieve your, your, your north star on day one, right? So that's why emphasizing on those, if you wanna think about your, your entire, your, your enterprise architecture, you, you, uh, you, you cannot achieve your, your goal on day one.

You, you might want to, let's say you have, uh, multiple front-end systems, your middle tier systems, your backend systems, then, then you, the, a good idea to phase by phase incrementally doing this will, will be to consolidate your front end. Once you consolidate front end, you re-architect your core, right? And then gradually apply your changes, right?

So now if you look at, now, let's dive deeper for a couple of minutes on your application, right? So typically work with me from the left. Yeah.

So you have a typical monolith where everything is structured together, right? Then you can have a second generation of services where you can, you have micro lith where you have multiple services still using same data repositories as you can see, your generation two, right? With me, everyone, right?

And then generation three is where you have, uh, your, you are building capabilities where you are saying you are telling your whole, your customers that you're building reusable capabilities. Now, these reusable capabilities have their, each of those has its own, uh, own specific data structure, uh, right? Um, you can have your databases, RDS or S3 or, um, or any, any other database which is specific to that business capability.

Now, what you, you want to avoid the cross communication between these business capabilities. So in nu generation four, you are diving deeper and you're having a event handling mechanism of communicating between these different business capabilities, right? So now I get, I'm going towards the con the philosophy of orchestration versus choreography.

You want more, uh, uh, you want more orchestration, right? In, depending upon certain scenarios, you may want to have choreography in more scenarios, but more, uh, in, in greater number of cases, you might, you would want to have choreography for faster, um, scale ability to, uh, ability to make changes, uh, time to market and all those good reasons, right? So, couple of last points that I want to touch upon.

You can achieve all this application changes you can make, but you cannot make a lot of pro progress if you don't make underlying fundamental changes to your organization without operating model, uh, model improvements. Let's take the leftmost. There are some companies that, that are, that are in the sustained traditional phase of how, uh, their, uh, their operating model would look like, right?

So let's, let's see, let's take, um, these four key segments. One is your platforms, your applications, your engineering and your operations, right? So you can do application engineering, right?

You can, uh, you can do platform engineering, you can, you can have applications require operations. Your platform also requires operations. Imagine if you have, in traditional, you have all these four in silos.

Any cap common capabilities you are building are not being reused across the different organizations. I would think that most are the, the bulk of a company falls into this application engineering area. Right?

Now, let's say that, uh, you want to do dynamic, um, deployment. You want to do, uh, advanced DevOps, CICD, you wanna spin up your whole environment very quickly, right? Those, some of those features fall, fall under platform operations, right?

How do you leverage those platform operations? So strategic organizations which are on the right, we'll have decentralized DevOps, where what I mean with that is you have common capabilities leveraged by your entire organization. Any cl, any cloud provider provides you these capabilities.

It's, it's most prudent if you use them. Okay? So, yeah.

And, uh, I want to just walk away, uh, with, uh, by mentioning to you some key tenets, what we just went through. Approach modernization as business, as a business case to deliver incremental value. You, you cannot deliver complete value on day one, but incrementally, that's how you need to convince your senior leadership or anyone.

And then modernization is all about decoupling everything. You're, you're decoupling your application from traditional legacy. You're decoupling your business process from one another.

Remember the diagram I went through? Yeah. This one, right?

You're decoupling all your business capabilities, right? And then you're decoupling your monolith into microservices. And at the same time, you're decoupling your skills, your people from your traditional silos.

You are positioning your value added services to enable your customers to modernize better, faster, right? So, yeah, thank you very much. I.