Q&A: Martin Cullen, Microsoft Ireland

16 Mar 2011

Martin Cullen is a director of Microsoft Ireland.

Based on your conversations with Irish CIOs, what are their main priorities right now?

There’s a financial and a technical aspect to it: the financial aspect is how to save money. That’s pretty much indiscriminately across the board, irrespective of sector. What that actually translates to is how can they make their IT environment as productive or more productive with less cost. So the debate moves to cloud computing, what is it, what does it look like, what does it mean to them, how can they avail of it and what does the world look like as a consequence?

The net result is that you end up having a conversation of: “We don’t see everything going to the cloud”, which is realistic. It’s a hybrid model whereby lower-cost functions – that they can bring to the cloud easily and that aren’t going to compromise the integrity of their core business applications – can easily migrate.

What’s your view of the cloud as a trend: minus the hype, are Irish companies really going for it?

It’s happening from our business perspective in three key areas. We’re signing up Exchange Online customers every day and the numbers are accelerating. It’s coming from a small base, but it’s a rapidly expanding business for us. A lot of those customers are moving as a first phase to Exchange environment. As a consequence of that, they tend to buy Microsoft Business Productivity Online Suite which is multiple products. It’s very transparent, very easy to migrate to it and easy to make that decision.

The second phase of customers going to the cloud – and this is starting to happen for us now – is our CRM Online from our Dynamics business. What people are looking to do is where it’s fully integrated into Outlook so it has the same look and feel. That tends to bring them on the journey to the first business-critical app, outside of traditional email.

The third part is on the application development side on our Azure platform. The takeup in Ireland has been extremely aggressive, really around a lot of small start-up companies that don’t have the money to put in to capital investment.

But are there any examples of large companies that would traditionally have developed their own applications now moving them to the cloud?

We have engaged a number of enterprise customers around Azure and they’re looking at how they can get there. It’s a much more complex timeline because they’ll have a lot of infrastructure already in place and they would have a lot of historical applications, so it’s not going to be overnight for them. What we have seen is point applications being built to facilitate something they might be doing in their business. We’ve seen that through some planning applications that have been developed through the Local Government Management Agency.

Overall, where would you classify large Irish businesses in terms of cloud adoption?

All of our bigger customers are engaging with us and having a dialogue about the cloud. Have they decided definitively what they’re going to do and how they’re going to do it? No, they haven’t. Some have come to a conclusion that they’re going to move the easier applications as they see them to the cloud and then they will retain their business-critical applications in house.

Usually, the migration for them is triggered by a timing event in the business. It could be a fundamental upgrade from Exchange 2003, for example. Over the next 12 to 24 months, you’re going to see a move more rapidly, particularly in the corporate and enterprise accounts, towards the adoption of cloud computing.

A lot of the finance departments are using their influence around cost reduction to drive the IT agenda to be more cost-efficient. If you take virtualisation as a subset of cloud computing, they’re the top couple of priorities for IT directors, so it is manifesting itself on the ground.

Where are Irish organisations in their adoption plans compared to peers elsewhere?

I can categorically state that the adoption – particularly for the SMB space – is high in Ireland; in fact, disproportionately high compared to other countries in Europe. And that’s driven by money. I think it’s come down to the fact that we’ve been heavily impacted by the banking crisis. Availability of cash for capital to expand isn’t there. Using the cloud, they don’t have to think about that.

In the enterprise, it’s a bit more ‘steady as you go’. They want to build up a knowledge base. They want to have Ts crossed and Is dotted, and that everything’s clear on what the deliverables are going to be and they will work from there. Again, the cost side of things is going to drive the outcome. You can’t squeeze something to the point where it will break in terms of taking massive amounts of cost out of it if you keep doing it the traditional way. You need to adapt how you do it if you’re going to get efficiency and ultimately, that is driving the agenda.

A recent survey suggests cloud will change the role of IT managers, and that it will help push IT more into the role of business strategy. Do you agree?

I’d say as a principle there’s merit in that, definitely. The bottom line is, the IT function has been under pressure for a number of years to show its value. Without people from the business understanding the value of what technology can bring, they see it as a cost centre and as long as they do, they try and squeeze it for costs; that’s the logical outcome.

I think it’s a natural phase in the evolution of IT and it’s a really positive thing, as well, because it was historically associated as a cost centre, with projects not getting completed or driving any positive net result. This actually gives a platform for showing the value that technology can bring within a company. We had a cloud event recently where Aviva demonstrated SharePoint in the cloud where it was driving massive business value for the company. When they were able to show that visually back to the business, it became such a no-brainer for them to continue their investment and put more effort towards developing on SharePoint.

Tablet PCs are a hot trend right now: do you think they have a role in business or are they just consumer gadgets?

Suffice to say it’s predominantly a consumption-style device in its current slate form, as opposed to the tablets that we would have launched with Dell and HP over the years. By our definition, it is very much a second or third device within a portfolio. (The main device is) the classic fully fledged PC and your second device may be a slate-style device. From an IT and controls point of view there’s still a lot of concern around device security and the impact of managing that from an IT perspective, which is a little bit more complicated than one might think from the other brands that are out there in the market today.

How can IT improve its standing in the business and be seen as a key contributor rather than just a cost centre?

The best illustration of that would be utilisation of a strong CRM product into the business because it has a direct correlation with your engagement with your customers and the impact you’re going to have on them. The days of just managing the traditional Exchange environments and so on is not enough for the business. We need more from IT than what is now just an accepted norm. In a world where everyone is fighting for customers and fighting to get to know their customers better, looking at your CRM strategy and the impact that it can have is really significant.

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Gordon Smith was a contributor to Silicon Republic