Digital transformation, a term which was earlier associated with large organisations, has now become imperative for even small and midsize businesses (SMBs). However, SMBs face various challenges while adopting digital technologies. In a conversation with Dataquest, Ravi Jain, director – server sales, India/South Asia, IBM talks about how SMBs can negate those challenges.
DQ: What is the role played by IT infrastructure in enabling emerging technologies?
Ravi Jain: If digital transformation was a priority before, it is essential now. The ongoing repercussions of COVID-19 have added to the need for agility. As offices turned to work from home, technology became the thread that connected the teams remotely to run the business operations. Cloud & AI have emerged as the key pillars of the “Digital” SMB enterprise. The SMB’s in India are seeking an application development platform that can run and execute seamlessly across multiple clouds. IT infrastructure underpins everything an organization does in an open hybrid-cloud & AI world—from processing trillions of transactions per day to analyzing, storing, securing and retrieving massive volumes of data.
We can approach the IT Infrastructure and its role from various dimensions.
First, at a functional solution level, IT infrastructure which is aimed at hosting emerging technologies should help in making the deployments more open and inter-operable. The future is more collaborative (Open) and hence it will be a mix of solutions being provided from various platforms (Hybrid Cloud).
Second, from a deployment view, it should not create another island in the IT landscape. A lot of organizations have investments in existing IT assets and architectures. The IT infrastructure should extend the architecture capability to serve the existing as well as the emerging technology. The Hybrid Cloud capability is not just about the existence of multiple cloud platforms, but it is essentially a capability to use all these as one.
Third, from a performance point of view, the IT infrastructure should be able to maximize the output per watt of electricity consumed. In some cases, it is not the efficiency of the infrastructure but the sheer ability to process bigger workload is important. For example, if the infrastructure is not able to process a large dataset for an AI application, there won’t be any relevant business outcomes and the pilot projects would never find the path to production deployments.
Fourth, the total cost of ownership of the infrastructure is extremely important. The digital transformation projects will be implemented only if they are viable. In this regard, one should consider not just the cost of hardware but also the costs of virtualization, middleware and the application software to decide the platforms.
Last but not the least, IT Infrastructure that enables the emerging technologies should be resilient and should support the Data Security and Data Privacy norms set by the organization and the regulator.
DQ: How pervasive are these technologies in the SMB sector?
Ravi Jain: Digital transformation is affecting everyone. On one side it is driven by the increasing expectations from the clients around the experience. On the other side it is driven by the usage of digital solutions to bring more efficiency in operations and making decision making agile and intelligent. This has led to the emergence of workloads that are fit-for-purpose and are customized to suit a particular organization or a specific process within the organization. Such applications are going to get introduced in-house, or from the existing application providers and a large amount of them are indeed provided by new application vendors. By their very nature, these workloads have a large affinity to be deployed in the form of cloud. These cloud environments can reside on-premise and on multiple public clouds depending upon the feasibility of service delivery and the ROI economics. The underlying technologies that are enabling this frontier are Cloud and AI. They are pervasive and SMB sector is no exception.
Mid-size companies need to constantly re-evaluate their IT infrastructure and consumption models to build agility, resilience and improved monetization. The investments in hardware are done with a minimum horizon of 5 years these days, and it is essential that the hardware supports not just the core workloads but also the digital transformation workloads that are critical for business.
Mankind Pharma wanted a workload and data migration strategy. It came with the additional layer of complexity; as it was an 18-month long migration. So the team had to ensure business operations didn’t get impacted during the project. We helped the client optimize their operations across the entirety of their supply chain.
DQ: What are some of the challenges faced by SMBs during their digital transformation journey?
Ravi Jain: Over the years SMBs have consistently demonstrated how to get maximum output on their IT assets and increase their productive usage. As digital transformation makes its way across industries, we expect to see pragmatic approaches of using digital technologies to drive incremental revenue and profits. Of course, there will be challenges on the way.
The first challenge is the ‘boardroom’ challenge. The IT / Digital transformation projects are sent back for reconsideration because they are proposed for on-premise deployments. The boards of organizations must acknowledge that Cloud is an essential capability and it aims at bringing the agility in application deployments. This cloud capability has to exist on-premise and off-premise. When such a Hybrid Cloud capability is built by organizations, they can decide which workload resides on which landscape, and take control. That inter-operability and control helps to realize the benefits that one expects from Cloud.
The second challenge is that of cyclical investments. IT, in SMBs, used to be given a budget once in 5 years to refresh the transaction processing systems. The trend is changing with budgets being allocated for digital projects / new initiatives but there is still a lot more expected in terms of allocation of budget for applications that can drive more revenue, and thereby profits.
In many instances, SMBs do not own the data that they would need to train their own AI models with maximum efficiency. Instead of training their own AI/ML/DL engines, one has to look for options where ready-made trained AI engines are available with interface to connect with their existing applications. We have witnessed many instances where AI projects have got shelved because the in-house engines were not able to ‘learn’ properly.
DQ: What is the traction that IBM servers and systems are witnessing from the SMB segment in the country?
Ravi Jain: From servers and mainframes to storage systems and software, IBM IT infrastructure provides the building blocks of a next-generation IT architecture. With clients in the SMB sector, we are witnessing an acceleration in the adoption of IBM Systems. Clients are focused on rapidly and remotely scaling up capacity and responding to unprecedented market volatility. During the early months of the pandemic, there was a sudden shift of priorities to make sure that all the core applications are running on resilient infrastructure and have sufficient capacity and high availability. While the focus on resiliency continues, the Digital Transformation projects are coming back on track.However, overall there is significant growth seen in bringing high availability and high-end disaster recovery capability on core workloads.
Today, 11 out of 13 public sector banks are running their mission critical workloads on IBM Power Systems. In addition, with the Government of India announcing the amalgamation of 10 public sector banks into 4 megabanks, the banks had to refresh their compute and storage to address the increased transaction load and enhance the customer experience. Of these 4 resultant entities, 3 banks are running their core banking systems and all 4 banks run their mission critical workloads on IBM Power Systems.
Jindal SAW, a leading industrial manufacturer has moved to IBM Systems servers. It enabled the company to consolidate its physical IT footprint, significantly reducing energy and cooling costs. The company was looking to double its revenues within a couple of years and the existing production planning and supply chain management processes could not easily scale up as the company grew. In 2021, a big spotlight will be on bringing more resiliency in mission-critical applications, renewed focus on driving cloud native workloads, resulting in the development of hybrid cloud capabilities for organizations. We will also see organizations revisiting their business continuity and disaster recovery practices, and will push for a higher degree of automation in IT processes.