 Welcome to this CUBE PowerPanel, where we're going to talk about application modernization, also success templates, and take a look at some new survey data to see how CIOs are thinking about digital transformation as we get deeper into the post-isolation economy. And with me are three familiar VIP guests to CUBE audiences, Tony Baer is the principal at DB Insight Doug, Henshin VP and principal analyst at Constellation Research and Sanjeev Mohan, principal at Sanjeev Mohan. Guys, good to see you again. Welcome back. Thank you, I think I see here. Hi Doug, let's get started with you. You know, this recent survey, which was commissioned by couch base 650 CIOs and CTOs and IT practitioners. So obviously very IT heavy. They responded to the following question. In response to the pandemic, my organization accelerated our application modernization strategy and of course an overwhelming majority, 94% agreed or strongly agreed. So I'm sure Doug, you're not shocked by that. But in the same survey, modernizing existing technologies was second only behind cybersecurity as the top investment priority this year. Doug, bring us into your world and tell us the trends that you're seeing with the clients and customers you work with and their modernization initiatives. Well, the surveys of course is spot on, you know, any consolation research analyst, any systems integrator will tell you that we saw more transformation work in the last two years than in the prior six to eight years. A lot of it was forced, you know, a lot of movement to the cloud, a lot of process improvement, a lot of automation work, but transformational is aspirational and not every company can be a leader. You know, at consolation, we focus our research on those market leaders and that's only, you know, the top 5% of companies that are really innovating, that are really disrupting their markets. And we try to share that with companies that want to be fast followers, that these are the next 20 to 25% of companies that don't want to get left behind, but don't want to hit some of the same roadblocks and, you know, pioneering pitfalls that the real leaders are encountering when they're harnessing new technologies. So the rest of the companies, you know, the cautious adopters, the laggards, many of them fall by the wayside. That's certainly what we saw during the pandemic. Who are these leaders? You know, the old saw examples that people cite, the Amazons, the Teslas, the Airbnb's, the Ubers and the Lifts, but new examples are emerging every year. And as a consumer, you immediately recognize these transformed experiences. One of my favorite examples from the pandemic is Rocket Mortgage. I know disclaimer required, I don't own stock and they're not a client. But when I wanted to take advantage of those record low mortgage interest rates, I called my current bank and some, you know, stalwart, very established conventional banks. I'm talking to you, Bank of America, City Bank, and they were taking days and weeks to get back to me. Rocket Mortgage had the locked in commitment that day, a very proactive, consistent communications across web, mobile, email, all customer touch points. I closed in a matter of weeks, an entirely digital, seamless process. So, you know, this is back in the gloves and masked days and the loan officer came, parked in our driveway, hand it, wiped down an iPad, handed us that iPad. We signed all those documents digitally, completely electronic workflow. The only wet signatures required were those demanded by the state. So it's easy to spot these transformed experiences. You know, Rocket had most of that in place before the pandemic. And that's why they captured 8% of the national mortgage market by 2020 and they're on track to hit 10% here in 2022. Now, those are great examples. I mean, I'm not a shareholder either, but I am a customer. I went through the same thing in the pandemic. It was all done in digital, it was a piece of cake. And I happened to have to do another one with a different firm and stuck with that firm for a variety of reasons. And it was night and day. So to your point, it was a forced march to digital. If you were there beforehand, you had real advantage and could accelerate your lead during the pandemic. Okay, now Tony Bear, Mr. Bear, I understand you're skeptical about all this buzz around digital transformation. So in that same survey, the data shows that the majority of respondents said that their digital initiatives were largely reactive to outside forces, the pandemic, compliance changes, et cetera. But at the same time, they indicated that the results, while somewhat mixed, were generally positive. So why are you skeptical? The reason being, and by the way, I have nothing against application monetization. I think the problem I have is that it often gets conflated with digital transformation. And digital transformation itself has become such a buzzword and so overused that it's really hard, if not impossible to pin down what digital transformation actually means. And very often what you'll hear from let's say a C-level person is, well, we want to run like Google, regardless of whether or not that goal is realistic for that organization. The thing is that we've been using, businesses have been using digital data since the taste of the mainstream, since that data's been digital. What really has changed though is just the degree of how businesses interact with their customers, their partners with the whole rest of the ecosystem and how in many cases you can take a look at the auto industry, that the nature of the business is changing. So there is real change of foot. The question is, I think we need to get more specific in our goals. And when you look at it, if we can boil it down to a couple, maybe boil it down like really over simplistically, it's really all about connectedness. No, I'm not saying connectivity because that's more of a physical thing, but connectedness being connected to your customer, being connected to your supplier, being connected to the whole landscape that you operate in. And of course, today we have many more channels with which we operate with customers. And in fact, also, if you take a look at what's happening in the automotive industry, for instance, so just reading an interview with Bill Ford, is that Ford is now rapidly ramping up their electric vehicle strategy. And what they realize is it's not just a change of technology, it's a change in their business. It's a change in terms of the relationship they have with their customer. Their customers have traditionally been automotive dealers and the automotive dealers have traditionally in many cases by state law, now have been the ones who own the relationship with the end customer. But when you go to an electric vehicle, the product becomes a lot more of a software product. And in turn, that means that Ford would have much more direct interaction with its end customers. So that's really what it's all about. It's about connectedness. It's also about the ability to act. And I'll say agility is about the ability, not just to react, but to anticipate and act. And of course, with all the proliferation, the explosion of data sources and connectivity out there and the cloud, which allows much more access to compute, it changes the whole nature of the bulking. The fact is that we have to avoid being overwhelmed by this and make our goals more, I guess, tangible, more strictly defined. Yeah, now so great points there and I want to just bring in some survey data again. Two thirds of the respondents said their digital strategies were set by IT and only 26% by the C-suite, 8% by the line of business. Now, this was largely a survey of CIOs and CTOs, but wow, doesn't seem like the right mix. It's a Doug's point about leaders and laggers. My guess is that Rocket Mortgage, their digital strategy was led by the chief digital officer potentially. But at the same time, you would think, Tony, that application modernization is a prerequisite for digital transformation. But I want to go to Sanjeev more in the survey and respondents said that on average, they want 58% of their IT spend to be in the public cloud three years down the road. Now, again, this is CIOs and CTOs, but this is IS, PASS and SAS, but that's a big number and there was no ambiguity because the question wasn't worded as cloud, it was worded as public cloud. So Sanjeev, what do you make of that? What's your feeling on cloud as flexible architecture? What does this all mean to you? If 58% of IT spend in the cloud is a huge change from today. Today, most estimates peg cloud IT spend to be somewhere around 5% to 15%. So what this number tells us is that the cloud journey is still in its early days. So we should buckle up, we ain't seen nothing yet. But let me add some color to this. CIOs and CTOs maybe ramping up their cloud deployments, but they still have a lot of problems to solve. I can tell you from my previous experience, for example, when I was in Gartner, I used to talk to a lot of customers who were in a rush to move into the cloud. So if we were to plot, let's say a maturity model, typically a maturity model in any discipline in IT would have something like crawl, walk, run. So what I was noticing was that these organizations were jumping straight to run, because in the pandemic, they were under the gun to quickly deploy into the cloud. So now they're kind of coming back down to crawl, walk, run. So basically they did what they had to do under the circumstances, but now they're starting to resolve some of the very, very important issues. For example, security, data privacy, governance, observability, these are all very big ticket items. Another huge problem that now we are noticing more than we've ever seen are the rising costs. Cloud makes it so easy to onboard new cases, new use cases, but it leads to all kinds of unexpected increasing spikes in your operating expenses. So what we are seeing is that organizations are now getting smarter about where the workloads should be deployed. And sometimes it may be in more than one cloud. Multi-cloud is no longer an aspirational thing. So that is a huge trend that we are seeing. And that's why you see there's so much increased planning to spend money in public cloud. We do have some issues that we still need to resolve. For example, multi-cloud sounds great, but we still need some sort of single pane of glass, control plane, so we can have some fungibility and move workloads around. And some of this may also not be in public cloud. Some workloads may actually be done in a more hybrid environment. Yeah, definitely. I call it super cloud. People win sometimes at that term, but it's above multi-cloud. It floats on top of it. But so you clearly identified some potholes. So I want to talk about the evolution of the application experience because there's some potholes there too. 81% of the respondents in that survey said, quote, our development teams are embracing the cloud and other technologies faster than the rest of the organization can adopt and manage them. And that was an interesting finding to me because you think that infrastructure is code and designing insecurity in containers and Kubernetes would be a great thing for organizations. And it is, I'm sure, in terms of developer productivity, but what do you make of this? Does the modernization path also have some potholes, Sanjeev? What are those? So first of all, Dave, you mentioned in your previous question, there's no ambiguity. It's at public cloud. This one, I feel it has quite a bit of ambiguity because it talks about cloud and other technologies. That sort of opens up the kimono. It's like, that's everything. Also, it says that the rest of the organization is not able to adopt and manage. Adoption is a business function. Management isn't IT function. So I feel this question is a bit loaded. We know that app modernization is here to stay. Developing in the cloud removes a lot of traditional barriers of procuring, instantiating infrastructure. In addition, developers today have so many more advanced tools. So they're able to develop the application faster because they have like low code, no code options. They have notebooks to write the machine learning code. They have the entire DevOps CI CD tool chain that makes it easy to version control and push changes. But there are potholes. For example, our developers are really interested in fixing data quality problems. All data privacy, data access, data governance. How about monitoring? I doubt developers want to get encumbered with all of these operationalization management pieces. Developers are very keen to deliver new functionality. So what we are now seeing is that it is left to the data team to figure out all of these operationalization, productionalization, the things that the developers are not truly interested in that. So which actually takes me to this topic that Dave, you've been quite actively covering and we've been talking about, which is the whole data mesh. Yeah, I was going to say, it's going to solve all those data quality problems, Sanjeev. You know I'm a sucker for data mesh, but yeah. I know, but see what's going to happen with data mesh is that developers are now going to have more domain resident power to develop these applications. What happens to all of the data curation, governance quality that a central team used to do? So there's a lot of open-ended questions that still need to be answered. Yeah, that gets automated, Tony, right? With computational governance. Of course. Not trivial, it's not trivial, but I'm still an optimist by the end of the decade we'll start to get there. Doug, I want to go to you again and talk about the business case. We all remember the business case for modernization that is remember the Y2K, there was a big IT spending binge and this was before the classification of the enterprise, right, CIOs, they'd be asked to develop new applications and the business baby helps pay for it or offset the cost for the initial work and deployment and IT got stuck managing the sprawling portfolio for years. And a lot of the apps had limited adoption or only served a few users. So there were big pushes toward rationalizing the portfolio at that time. So do I modernize? They had to make a decision, consolidate? Do I sunset? That was all based on value. So what's happening today and how are businesses making the case to modernize? Are they going through a similar rationalization exercise, Doug? Well, the Y2K era experience that you talked about was back in the days of, you know, throw the requirements over the wall and then we had waterfall development that lasted months, in some cases years. We see today's most successful companies building cross-functional teams, you know, the C-suite, the line of business, the operations, the data and analytics teams, the IT. Everybody has a seat at the table to lead innovation and modernization initiatives and they don't start, the most successful companies don't start by talking about technology. They start by envisioning a business outcome, by envisioning a transformed customer experience. You hear the example of Amazon writing the press release for the product or service it wants to deliver and then it works backwards to create it. You got to work backwards to determine the tech that will get you there. What's very clear though is that you can't transform or modernize by lifting and shifting the legacy mess into the cloud that doesn't give you the seamless processes that doesn't give you data-driven personalization. It doesn't give you a connected and consistent customer experience, whether it's online or mobile, you know, bots, chat, phone, everything that we have today that requires a modern scalable cloud negative approach and agile, deliberate, iterative experience where you're collaborating with this cross-functional team and of course, correct, again, making sure you're on track to what's needed. Yeah, now, Tony, both Doug and Sanjeev have been talking about what I'm going to call this IT and business schism. We've all done surveys. One of the things I'd love to see couch-based do in future surveys is not only survey the IT heavy but also survey the business heavy and see what they say about who's leading the digital transformation and who's in charge of the customer experience. Do you have any thoughts on that, Tony? Well, this is no question. I mean, it's kind of like, you know, the more things change. I mean, we've been talking about that IT and the business has to get together. We talked about this back during and Doug, you probably remember this back during the Y2K ERP days is that you need these cross-functional teams. We've been seeing this, I think what's happening today though is that, you know, back in the Y2K era, you were basically going into like our bedrock systems and having to probably re-engineer them. And today, what we're looking at is that, okay, those bedrock systems, the ones that basically are keeping the lights on, okay, those are there, we're not going to mess with that, but on top of that, that's what we're going to innovate. And that gives us a chance to be more, you know, more directed, you know, and therefore we can bring these related domains together. I mean, that's why I just kind of, you know, talking where Sanjeev brought up the term of data mesh. I've been a bit of a cynic about data mesh, but I do think that where it can work is where we bring a bunch of these connected teams together, teams that have some sort of shared context. Now, it's everybody that's, every team that's working, let's say, around the customer, for instance, which could be, you know, in marketing, it could be in sales, order processing, in some cases, you know, in logistics and in delivery. And so I think that's where I think we, you know, there's some hope in the fact is that with all the advanced, you know, basically low code, no code tools, there are ways to bring some of these other players, you know, into the process to bring them previously, had to, you know, were sort of, you know, more at the end of like a, you know, kind of a, I sort of like to throw it over the wall type process. So I do believe that despite all my cynicism, I do believe there's some hope. Thank you. Okay. Last question. And maybe all of you could answer this. Maybe Sanjeev, you could start it off and then Doug and Tony can chime in. In the survey, about a half, nearly half of the 650 respondents said they could tangibly show their organizations, improve customer experiences that were realized from digital projects in the last 12 months. Now, again, not surprising, but we've been talking about digital experiences, but there's a long way to go judging from our pandemic customer experiences. And we, again, you know, some were great, some were terrible. And so, you know, some actually got worse, right? Will that improve, when and how will it improve? Where's 5G and things like that fit in in terms of improving customer outcomes? Maybe Sanjeev, you could start us off here. And by the way, plug any research that you're working on in this sort of area, please do. Thank you, Dave. As a resident optimist on this call, I'll get us started and I'm sure Doug and Tony will have interesting counterpoints. So I'm a technology fanboy. I have to admit, I am in awe of all these new companies and how they have been able to rise up and handle extreme scale. In this time that we are speaking on this show, these food delivery companies will have probably handled tens of thousands of orders in minutes, you know. So these concurrent orders, delivery, customer support, geospatial location, intelligence, all of this has really become commonplace now. It used to be that, you know, large companies like Apple would be able to handle all of these supply chain issues, disruptions that we've been facing. But now, in my opinion, I think we are seeing this in Doug mentioned, Rocket, Mortgage. So we've seen it in Fintech and shopping apps. So we've seen the same scale and it's more than 5G. It includes things like even in the public cloud, we have much more efficient, better hardware which can do like deep learning networks much more efficiently. So machine learning, natural language programming, being able to handle unstructured data. So in my opinion, it's quite phenomenal to see how technology has actually come to rescue and as you know, billions of us have gone online over the last two years. Yeah, so Doug, to Sanjeev's point, he's saying basically, you ain't seen nothing yet. What are your thoughts here in the final part? Well, yeah, I mean, there's some incredible technologies coming, including 5G, but you know, it's only going to pave the cow path if the underlying app, if the underlying process is clunky, you have to modernize, take advantage of serverless scalability, autonomous optimization, advanced data science. There's lots of cutting edge capabilities out there today but lifting and shifting, you got to get your hands dirty and actually modernize. On that data front, I mentioned my research this year, I'm doing a lot of in-depth looks at some of the analytical data platforms, these lake houses, we've had some conversations about that and helping companies to harness their data to have a more personalized and predictive and proactive experience. So we're talking about the snowflakes and Databricks and Googles and Teradata's and Vertica's and Yellowbricks and that's a research I'm focusing on this year. Yeah, you know, your point about paving the cow path is right on, especially with the pandemic, a lot of the processes were unknown. But you saw this with RPA paving the cow path that only got you so far and so great points there. Tony, you get the last word, bring us home. Well, put this way, I think there's a lot of hope in terms of that the new generation of developers that are coming in are a lot more savvy about things like data and I think also the new generation of people in the business are realizing that we need to have data as a core competence. So I do have optimism there that the fact is I think there is, I think there's a much greater consciousness within both the business side and the technicals and the technology side of the organization of the importance of data and how to approach that. And so I'd like to just end on that note. Yeah, excellent. And I think you're right, putting data at the core is critical data mesh. I think very well describes the problem and to Jim Ox credit lays out a solution just the technology's not there yet nor the standards. Anyway, I wanna thank the panelists here, amazing. You guys are always so much fun to work with and love to have you back in the future. And thank you for joining today's broadcast brought to you by CouchBase. By the way, check out CouchBase on the road this summer at their application modernization summits. They're making up for two years of shut in and coming to you. You got to go to couchbase.com slash road show to find a city near you where you can meet face to face. In a moment, Ravi Myron the chief technology officer of CouchBase will join me. You're watching theCUBE, the leader in high tech enterprise coverage.