What Tech Startups Need To Know About the Cloud

Scott Kitun

November 18, 2018 · 7 minutes read

 

Scott Walker, Chief Marketing Officer at cloud solutions company Unitas Global, is on the podcast to help us better understand our options when it comes to the cloud.

 

In conversation with Technori Host Scott Kitun at WGN Radio, the two discuss when is the right time to start thinking bigger about your company’s cloud provider, and where Unitas fits in compared with players like Amazon and Google. An edited Q&A of the conversation follows.  

 

Scott Kitun: It’s both good and bad that Amazon and Google are in all these different tech incubators. It’s great because they’re giving like $100,000 credits to these startup founders who don’t have anything.

 

But it’s awful because from that moment on, they don’t learn what the purpose is, how to better use the cloud, how to save money, how to keep it secure etc. They don’t learn anything because all that happens is they get their websites started, hand it off to somebody and then they literally from that moment on, they have no idea. Am I crazy?

 

Scott Walker: No. In fact, there’s a lot of confusion in the market. Everybody talks about cloud, cloud, cloud. In fact, I have this running joke with my kids. I said, “Don’t worry about that. It’s in the cloud. It’s safe.”

 

SK: Help us understand the cloud –– the different versions and use cases and what matters and what people should look for and where Unitas Global sits within the space.

 

SW: Sure. Absolutely. So when we think of cloud, there are three primary cloud categories. You have private, you have public, and you have hybrid, which is a combination of the two. In a private space, this is an infrastructure that’s designed and built special for certain workloads and that infrastructure is not shared. That’s a private cloud. Public cloud is the ones you mentioned earlier, AWS, Google and Microsoft of course, with their Azure platform. That’s the other big one.

 

So there’s Google and Microsoft and Amazon, we call them hyperscalers of public cloud platforms. And all the talk has been about, “I got to get to the cloud.” GE famously said a couple of years back: we’re going to move all our workloads from our private data centers into the public cloud because we want flexibility, we want agility, and we want to lower our cost of doing business. Well guess what? They’re not quite there yet because it’s a lot harder than people think.

 

Yup, so at Unitas, we talk a lot about the enterprise cloud journey. In other words, where are you at today and how can you get to the cloud and every step in between. And how can you leverage the benefits of the cloud?

 

It’s why we bought a company earlier this year called Solinea. They were a cloud consultant. Where they fit in –– what we call the enterprise cloud journey –– is kind of phase two. Phase one is where the Bains and the McKinseys sit with the executives of a company: What’s our digital transformation strategy? How can I make my business more agile? How could I capture new markets? Those sorts of things. We’re not doing that.

 

We’re doing phase two, which is: once that strategy is set, what do I have for applications? What does my infrastructure looked like? How can I develop a playbook to get to the cloud?

 

SK: I had a conversation just yesterday about this particular topic –– the overconsumption and the overspend on “BI.” I’m using air quotes here when I say BI because there’s eight gazillion versions of your version of BI and it’s sometimes maybe more appropriately BS depending on who you are.

 

We have paralysis by analysis, not just because we have too much information, but because your infrastructure isn’t there to provide accurate data.  I’ve got to have enough of an infrastructure that I can collect that, that there’s a mouse trap set up for it and then I can use it. And that’s the part I think everyone’s missing.

 

Unitas Global is finding a really nice spot, to be able to –– for lack of a better term, rake in the money –– I mean, it’s a great opportunity.

 

SW: Yeah. And as a marketer, Unitas likes to focus on the outcomes companies are going to get by investing in their digital transformation. I read a really great article the other day. It was about The Gap stores. They had this really nice graphic about the level of engagement they have with a customer and how much revenue that customer generates, and those are the customers we’re really looking for. The cost takeout I want to avoid because they’re just going to squeeze us as a company in our price and they don’t see the value of the investment. We do plenty of those, but we’d rather focus, from a targeting standpoint, on the ones that are looking to increase their revenue.

 

The Gap story was interesting in that they categorize their customer’s level of engagement and how much revenue they generate. Step one, it’s a one time transaction, no digital interaction, no anything. Step two was they look online, they get recommendations online. There’s some of that AI and BI making recommendations.

 

My wife works for Stitch Fix, so I know all about this, right? They have this engine that recommends clothes –– and a lot of the retailers are doing it –– you get a 5x revenue uplift from the base if they’re engaged at that level. The highest level is doing all of that. Plus there’s brand loyalty across all the brands and that’s a 10x revenue. So by investing in technology, GAP hopes to bring what is a $1 spent to a $10 spend by investing in cloud infrastructure.

 

SK: Stitch Fix is one of the companies that we talk about all the time on this. The other one I’m blanking on right now –– it’s a shoe company. It’s not cheap and they do pop up stores only. It’s all online and they only have a certain amount of inventory.

 

I went in to one of their pop ups the other day and ended up chatting with the manager. Bottom line is because they do popups, they tell you that if you follow us on Facebook or Instagram, you get an extra discount or free shoe laces or whatever. They’ve got sort of a geofence so they know how they’ve signed you on. Then, they actually do as a figure out amount of money that you’re generating through shares of friends. So they’ve placed a dollar value on the amount of people that you are sharing with them. This is how granular their marketing strategy is –– the infrastructure, if they don’t have cloud and the right cloud, that entire business model doesn’t even work.

 

SW: Yeah. And back to your earlier question about where Unitas fits in, and I talked about our Solinea acquisition earlier in the year that helped set the playbook of how to get to the cloud. Unitas, historically, has played in the, “let’s design, build and operate the cloud infrastructure for you.” So, Solinea will come in, they will sit down with our client or prospect and say: what do you want to do? What’s your data? Where does it sit? How secure is it?

 

Like for example, Coca Cola is never going to put their formula on the public in a public cloud, right? That’s IP they don’t ever want to get out there. We will sit down, develop that playbook and then design, build and operate –– whether that’s a private infrastructure or a public infrastructure.

What gets often overlooked is the network that connects –– and this was in a recent announcement –– we announced a connectivity offer to go along with cloud. If you look at the average enterprise, they’re using something like a hundred different cloud services. Most of those are software-as-a-service and a lot of them tend to share the same data set. So you’re using Workday over here, you’ve got an on premise system, you got another ERP –– they all need to be connected to one another. And what’s often overlooked is the connectivity between all these different applications in cloud services.

 

So by offering private network connections between those, we offer a faster onramp to those cloud services so you get the kind of performance that you expect. The CIO’s biggest fear is: I’ve got this application in my data center, I’m going to move it out to the cloud. My end users aren’t going to be able to get to it that quickly because they’re accessing via the Internet.

 

How does a company know when they’ve gotten to a size when they need to start thinking bigger? Like for a two person, three person startup with very little activity going on. They don’t need to spend all that money. They can take free credits from Google or wherever. There’s a certain time where I feel you really need to have strategy. What does that roadmap look like?

 

Yeah. And what you’re referring to there is companies that get to a certain size and it really is not depending on number of employees, it’s how much you use the tech. For example, one of our largest customers is an ad tech company. The number of employees is low versus a General Electric or tried-and-true enterprise, but their spend on IT as a percentage of the overall is very high. We help those kinds of companies as well. So when you get to a spend, I would say in the public cloud really as little as $10,000 a month, it’s time time to start reevaluating.

 

What would you say is a good takeaway on the percentage of revenue spent on tech? What’s a good percentage of revenue or percentage of sales that you should be allotting towards IT infrastructure? It doesn’t have to be just cloud.

 

If you’re a SaaS company who relies on an infrastructure for your business, that’s going to be more like 10 percent, but if you’re a tried-and-true enterprise, it’s probably going to be more like two or three percent.

 

Final note, if you could tell any person anything about cloud and Unitas Global, what would be the number one thing you’d say about why Unitas is a good company for them and why you think they need to know more about cloud? What’s the big takeaway?

 

I would say we make what’s very complex, very simple. I talked about that journey and one of the things we like to say is we meet you where you are today. So wherever you’re at in that journey we can help you, and make it simple.

 

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