On 15 August, 2016 IBM and Workday announced a multi-year partnership wherein Workday will use IBM’s Cloud for its internal Testing and Development environment.
The announcement adds to the existing IBM and Workday partnership which includes IBM’s global Workday Consulting Services, IBM’s acquisition of Workday services provider Meteorix (in 2015) and IBM’s own use of Workday’s Human Capital Management (HCM) for its global workforce.
Existing relationship and no fear of competition (current or potential) made IBM the likely choice for Workday. Amidst worthy competitors, IBM was the most likely choice given its existing focus on Workday and Microsoft, Google being current (and potential) competition. Per Workday’s own admission, it intends to expand the use of IBM Cloud (over time) beyond development and testing. At Greyhound Research we believe this can (in theory) result in Workday eventually moving its production environment as well to IBM Cloud.
This alliance is testimony to the growing importance of Testing and Development in the face of Digital Transformation.
Per a recent Greyhound Research global independent study titled, Global CEO Priorities 2016, over 93% CEOs cited Digital Transformation as a key topic of discussion in meetings with their Board and other senior management.
In order to make this transformation real, spend on IT and the resulting spend on Testing and Development is on the rise. While the IT spend on Business As Usual has remained largely constant, the spend on Testing and Development as a percentage of IT budget available for Innovation has more than doubled between 2012 and 2016.
Per Greyhound Research estimates, the IT spend on Testing and Development has risen from 15% in 2012 to 35% in 2016.
However, this is not a first-of-its-kind announcement. The alliance between Infrastructure Public Cloud vendors and Independent Software Vendors (ISVs) is not surprising. Take for instance, Salesforce.com which selected AWS as its preferred public cloud infrastructure provider earlier this year. To cite another example, SAP has also chosen to move to Microsoft Azure.
More specifically on Testing and Development environments, per a recent Greyhound Research global independent study titled, Global Cloud Adoption Index 2016, nearly 50% of organisations (including enterprises and ISVs) stated their intent to move their Testing and Development environments completely on the Cloud.
Over and beyond benefiting from compute and storage specific innovations from IBM, Workday stands to gain other benefits by moving their Testing and Development environment to Public Cloud. These include:
Optimise Costs To Increase Spend On Innovation & Focus On Core
Choosing to use Infrastructure-as-a-Service (IaaS) from IBM will allow Workday to focus on their own Intellectual Property (IP) and not spend expensive monetary and people resources on managing hardware setups.
Per Greyhound Research estimates, it takes roughly 3 weeks to set up a Cloud-based Testing and Development environment – this compares to a period of 12 weeks for traditional on-premise setups.
The choice to use IaaS allows ISVs increased room for focus on their codebase, expansion plans and future offerings. Hence, an opportunity to further innovate in what they know they best – Software-as-a-Service (SaaS).
Scale With Flexibility Using On-Demand Infrastructure
By way of using IBM’s IaaS, Workday gets the flexibility of using different grades of compute and storage as and when required. At Greyhound Research we believe this on-demand provisioning of Infrastructure allows ISVs to try new ideas relatively quickly and at a fraction of a cost. This allows ISVs to compete with their global peers and better respond to new functionality requirements (i.e. code-level changes) requested by customers.
Albeit there are clear benefits for Workday, such movements can also quickly go astray if not planned and managed well.
Greyhound Research is of the opinion that while using IaaS makes scaling up easy, Workday will need to think (and plan) for possible scaling down eventualities. Contractual liabilities may have a minimum threshold and may not allow costs to go down in direct proportion to scale. Enterprises and ISVs like Workday exploring a similar move must account for the above mentioned fallout among others that can make such movements expensive and cumbersome to manage.
How Can Enterprises and ISVs better plan to move their Testing and Development Environments to Public Cloud?
Such movements require careful benchmarking and strategic planning even before one begins negotiations. To know more about Greyhound Research Vendor Benchmarking Toolkits, Tailored Advisory Session(s) and our global, annual Buy-side and Sell-side trackers such as Global Cloud Adoption Index among others, please write to our Client Centricity Team at firstname.lastname@example.org.
Anshoo Nandwaani: Anshoo serves as a Vice President and Principal Analyst with Greyhound Research, an Award-Winning, Global, Independent IT & Telecom Research & Advisory firm. She also serves as Chief Human Resources Officer (CHRO) of Greyhound Knowledge Group, a Global, Multi-Disciplinary Research & Advisory firm. In her current role, Anshoo leads the research agenda for The Empowered Workforce theme. As part of this theme, she studies the impact of vertical-specific processes and workforce-centric technologies on workforce lifecycle and overall business alignment. At Greyhound Research, we refer to this as the Workforce Empowerment Systems (WES). To read more about her, click here.
Sanchit Vir Gogia: Sanchit is the Chief Analyst & CEO of Greyhound Research, an Award-Winning, Global, Independent IT & Telecom Research & Advisory firm. He also serves as Chief Futurist, Founder & CEO of Greyhound Knowledge Group, a Global, Multi-Disciplinary Research & Advisory firm. Given his expertise and passion for Technology, Sanchit also doubles up as the CIO for Greyhound Knowledge Group companies and is building a technology-led Research & Advisory business. In his another avatar, Sanchit is an Advisor To The Board (for IT & Business decisions) of a US$100 Million+ organisation in the Metal Industry. To read more about him, click here.
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