This is a guest post by Jacky Wright, Vice President of IT Strategic Services, Microsoft IT
I recently joined Microsoft and Tony Scott’s team within Microsoft IT after several years at BP in London, as the VP/CIO Corporate Functions. I am excited to be part of Microsoft, a company that it represents everything I have a passion for: Technology solutions, Corporate Social Responsibility and Innovation. Our focus on Cloud Services is pivotal for us and I am looking forward to being a part of this journey.
Today, I want to talk to you about the importance of landing end-to-end cloud quality in order to maximize your cloud services investment. Last month, I sponsored and participated in an internal Microsoft conference that was all about landing end-to-end cloud quality. The conference featured internal and external experts, and hundreds of Microsoft employees attended. Since I am fairly new to the company, it put me in the unique position of being a customer critic and advocate of Microsoft at the same time.
The seeds of this particular conference were rooted in Six Sigma methodologies, which we are using at Microsoft to improve process quality so we can deliver the best value to our customers. There is a growing enthusiasm and community within Microsoft around these methodologies and these Six Sigma roots are now firmly planted and thriving. This robust community has completed more than 850 Six Sigma-driven projects in just four years. At Microsoft, we have developed three special service branches unique to our company’s environment: Last Mile Excellence, or LMX; Microsoft Accelerate workshops; and Net Satisfaction Improvement Method. These special services are delivering results in terms of revenue enablement, cost displacement, cost avoidance and Net Satisfaction improvement.
So how does all of this impact cloud computing? Big time!
As an IT leader, I see the Microsoft business making investments in on-premises software and cloud-based services across a full range of capabilities, such as productivity applications, collaboration tools, business applications, storage and hosting, communications and more. To do this requires deep investment, – $2 billion invested in cloud infrastructure, 30,000 engineers working on cloud services, and a real commitment to services excellence. But I know even that isn’t enough for many CIOs, based on my recent experience as a CIO and having regular communication with some of my peers.
While I was at BP evaluating cloud services, I was looking for end-to-end cloud quality. The requirement was to define a compelling value proposition that went well beyond product features. It was imperative that I, as the customer, be able to clearly understand the business value and the ROI of any cloud investment I was going to make. I was looking for a clear picture of how cloud offerings would fit into my business in terms of integration, deployment, and roll out. And I needed to have a comprehensive post implementation service offering in terms of maintenance, service and support, which includes disaster recovery and security. I view this “package” as end-to-end cloud quality.
CIOs and their staff need to understand all three phases to overcome concerns about disruptions to operations and migrations. The CIOs I know acknowledge the potential for cost reductions that come with cloud computing; however, they also fear that those cost savings could be wiped out by hours of downtime and other disruptions to operations.
Now that I’m at Microsoft and working in Microsoft IT, I’m fortunate to be both a vendor and consumer of cloud services. If you’re not aware of our internal use of Windows Azure and private cloud computing, check out Microsoft IT Showcase.
To be better able to deliver the level of quality our customers demand from our cloud services offerings, we are taking steps to reorganize the way we do business. Microsoft IT, for instance, is currently reorganizing IT employees and applications around business processes and shared services, moving to what we call a real time enterprise. All of these groups will collaborate together via a process centric view to create value and drive IT excellence.
I’m excited about this shift because it will also help us better serve your use of cloud applications and online services.
The transition to an online services model reminds me of another industry: The telecommunications industry traveled down a similar road when it was deregulated in the 1990s. It had to transition to a subscriber-based service model. In this type of a service model, churn rate indicates the health of a company’s customer base and is a proxy for company profitability. For example, in the cellular industry, a churn rate increase from 3% to 4% is approximately 22 months shorter customer service length, and $0.53 less profit per customer. Now that number may seem small, but with subscriber bases of more than 80 million that translates to millions of subscribers churning each year at an acquisition cost of $250 per customer. I’ve found that churn can impact operating margins by 3-5 points, while on the other hand, focusing on process quality and operational excellence can help us attain 5-10 points operating margin.
Some of the observations that stuck with me from my 2-day conference on cloud: You consider ROI and a clear value proposition for cloud services to be imperative; you demand top quality cloud services; and you need to be able to count on service and support for your investment. And most of all, cloud services cannot disrupt your business operations.
Now that I am at Microsoft, I am committed to help drive cloud quality by keeping you -- our customer -- always top of mind. I can see how we here at Microsoft are innovating with a commitment to continuous
improvement of cloud service quality – and the result is greater value for your cloud services investment. As we all make this exciting transition to the world of cloud services, I am passionate about helping you land end-to-end cloud at your company so you, too, can realize the possibilities and benefits of moving to the cloud.