Cloud

Capital One's 'all-in' cloud strategy is much more than a tech decision

For those companies hoping to succeed in the cloud age, a different mentality is needed, as Capital One's example shows.

Everyone's "going to the cloud" these days, but few are likely getting the full benefits from the move. "What you need to really take advantage of cloud computing is a complete rethink of your approach to IT," declared Capital One Vice President of Cloud Strategy Bernard Golden. Not, as many (most?) do, "treat[ing] cloud computing like a data center at the end of the wire."

Cloud requires a different mentality, a different culture. Cultural change is hard, which is probably the biggest reason we're seeing AWS step back from it's "if it's not public it's not cloud" stance to give enterprises a more gradual path to cloud nirvana. Even so, the companies that win biggest in cloud will be those that change fastest, as Golden and I discussed in an interview following AWS re:Invent.

SEE: Cloud computing policy (Tech Pro Research)

You can't go back

What are the stakes of getting cloud right? According to Golden, it's all about thriving in an environment that has never been more competitive. Speaking of the "complete rethink of IT," he said:

Yes, you get your infrastructure from a cloud provider. But you also implement agile development practices. You implement DevOps deployment methods. And you use SRE operations processes. The overall approach is often called cloud-native. We all know cloud-native companies, because we use them every day. Netflix. Spotify. Lyft. Airbnb. It's no accident that cloud-native and disruption go hand-in-hand. Using the power of cloud-native practices, these companies force transformation into industries. And leaves traditional companies with no hopes of catching up.

No hope? Seems bleak, but Golden isn't some pundit pontificating from the comfort of his advisory fees. He's living this at Capital One and joined expressly because he felt the company showed that it was willing to make the hard choices to change. For him, that choice is between "surfing the cloud-native wave or...being inundated by it."

And so Capital One, he told me, has gone "all in" on public cloud, generally, and AWS, specifically. Sure, I countered. "All in" except for those mission-critical apps that have to live on legacy infrastructure for eternity, right?

Nope.

SEE: AWS re:Invent 2018: A guide for tech and business pros (free PDF) (TechRepublic)

"All in means all in," he said. "Our plan is to shut down data centers in the somewhat near future—not five years from now; nearer term than that." Nor is Capital One simply hoping to dress up legacy applications in cloud infrastructure. "We're not just trying to run existing apps in the cloud," he told me, as "that doesn't give us the full benefits of cloud computing. [Instead] we're transforming our applications to try to take advantage of the cloud services available to us."

Which prompts the question: How do you keep up?

Keeping up with the Jassys

After all, the blistering pace of open source and cloud innovation have made it seem all but impossible for mainstream enterprises to keep up. If Golden is right and "our economy will see more disruption in the next decade than occurred in the entire twentieth century," it's going to require Herculean efforts to not get left behind.

To help Capital One keep current on cloud innovations, Golden stressed that they engage with AWS and have interactions with their service teams so they have visibility into product roadmaps. Over time, he went on, they hope to engage even more deeply so that Capital One gains even longer term visibility.

SEE: What a hybrid cloud is in the 'multi-cloud era,' and why you may already have one (ZDNet)

Even with this approach inevitably Capital One ends up building something that AWS ends up obviating through its own product innovations. Does this frustrate Golden? "No," he responded, "That's just part of what goes along with being a leading-edge cloud adopter. We could of course wait for two to three years for everything to fully bake, but we can't afford to sit back and wait." Sitting at re:Invent, even with foreknowledge of at least some of the product announcements, the stance of Capital One after an AWS announcement is "How can we use this?"

Not that the company charges recklessly into embracing whatever AWS cares to build. Instead, Golden underlined, "We don't start using a service just because it's announced and it's cool. We start using it when we are sure we can meet security and other commitments we have internally."

In this way, Capital One functions more like a cloud-native company like Netflix than a more traditional financial services company. As such, Golden and Capital One expect that they can compete on the non-level playing field that cloud creates, and can disproportionately benefit as a result. They made a decision seven years ago that to succeed they had to become a tech company, and not merely a financial services company. It's not an easy strategy, but if it's a choice between "hard" and "oblivion," Capital One is looking to go big on cloud and win.

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About Matt Asay

Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.

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