Defining the Right Cloud and Digital Strategies for Growth

The digital transformation of McKesson, one of the nation’s largest and oldest health care companies, illustrates the importance of defining the right cloud strategy when embarking on such a complex and important journey.

McKesson serves more than half of all U.S. hospitals and delivers a third of all medications used daily in North America, with operations in more than 16 countries. Over the past couple years, the company moved its traditional, virtualized environment into a secure and compliant private cloud.

But as its cloud needs grew, McKesson Director of Cloud Services Vijay Thumma believed that moving certain workloads to public cloud was the next logical step in the company’s transformation. But with differing levels of sophistication and complexity in its business units, he knew that making the leap to public cloud wouldn’t be a one-size-fits-all move.

Thumma already understood the power of cloud to improve efficiencies, streamline operations and realize cost savings. He helps his internal customers understand the benefits of cloud, get applications ready for transition and provide operational support. He began to study public cloud capabilities and the opportunity to start moving from capex to opex.

Why the right cloud and digital strategies matter

Across every industry, organizations are moving to a hybrid or multi-cloud delivery model for their digital platforms. With the right strategy and understanding where you are on the journey, you can drive efficiency through operations automation, grow revenue through innovation, modernize applications and realize cost savings by shifting towards agile, use-based, pay-as-you-go pricing models.

Choosing the right cloud and right location for each application and data is critical to optimizing IT for the digital world. Applications placed in a suboptimal architecture as they relate to each other, dependent microservices, needed data sources and message paths can negatively alter performance characteristics and security, usually in a negative manner.

The benefits of having well-defined cloud and digital strategies and a low risk, fast path to implementation are undeniable. Organizations that do gain the ability to:

• Create new business models, leveraging an always-on, connected, network presence that can reach customers globally with personalized services based on real time data. These new business models enable a level of personalized service and revenue generation not possible in the world of traditional IT. Think of the everything-as-a-service models now used in transportation, rentals (living or vacation) and healthcare, all based on carefully crafted cloud and digital strategies.
• Accelerate delivery of new products and services, to remain competitive, to lead and to delight customers. An agile, hybrid cloud infrastructure and set of tool chains that deliver strategic flexibility, optimum economics and easier migration to the cloud speeds new application development. This is a core requirement to deliver new products and services.
• Save money, through real operational savings vs. legacy systems, due to improved IT processes, tool chains and reduced complexity. These savings can be re-invested on new business drivers.

McKesson’s Thumma understood the potential benefits, but also the veritable constellation of considerations necessary to determine the right strategy.

His goals were to modernize McKesson’s applications, and “make sure that we were tackling it from the right architectural standpoint with the right security and regulatory approach.” The company needed an operations plan to build and accelerate its deployment and account for ongoing operational management, optimization and education. Another big concern for McKesson, which is subject to strict compliance regulations, was security and control.

Thumma worked with Rackspace to help McKesson’s business units build the business case for public cloud, balance risk and compliance, and provide the best landing zone for individual workloads, while working with core foundational services to ensure adequate network security and account management.

While every business will have a different set of goals and a different starting point, some considerations are universal:

• Understand your options. Choosing the right platform – managed hosting or virtualized environments, private cloud, public cloud – on an application by application basis and data source-by-data source basis is critical to optimizing your multi-cloud architecture for performance, security, agility, economics and better customer experiences. For new applications and data sources, consider what application development, data management systems, and CI/CD tools and frameworks are available. Do they provide the needed capability, performance, security, and/or portability across clouds? Does the cloud platform in question enable your organization to move forward on your longer-term digital strategy and business goals? Evaluating the characteristics of the new applications and data flows is key to getting the performance and security necessary to meet customer demands.
• Leverage your current environment. To further mitigate potential risks or downtime as a result of migration, consider creating hybrid solutions that include legacy application on traditional hardware, private cloud or colocation. Move to private cloud if possible because as you open your traditional enterprise applications to new web scale workflows, the elasticity provided by managed private cloud enables the older applications to perform and maintain security policies while serving your new digital strategies.
• Modernize your IT platform and tool chains. This is a fundamental requirement to deliver your digital strategy and better business outcomes. It means rationalizing and migrating existing applications; updating IT practices and culture to DevOps and adding the tools chains to deliver updates to existing applications and new modern applications and services.
• Reduce IT management costs. Remove as much of IT operations burden as possible by moving from in-house management to a lower cost, scalable and skilled managed services provider. This also addresses the difficulty attracting and retaining employees with the skills required to operate and optimize cloud-based IT.

After considering the above, McKesson chose to leverage Microsoft’s Azure platform-as-a-service public cloud platform. Today, the organization is continuing its transformation, looking toward a hybrid and multi-cloud future and exploring the benefits of moving certain workloads to Google Cloud Platform. Thumma estimates that McKesson has already reaped savings of more than 40 percent, allowing it to accelerate its multi-cloud plans.

While the particulars will be unique to each business, by thoughtfully crafting the right cloud and digital strategy, any company, no matter where it is on the journey, can be successful.