One Benefit of Cloud Migrations May Surprise You

December 5, 2016, 12:01 PM UTC
AWS re:Invent 2016
Barb Darrow for Fortune

For anyone following technology trends, the notion that many businesses are supplementing or even replacing their own data centers with a cloud like Amazon Web Services is no longer a shock, or even news.

Public cloud companies, like Amazon (AMZN), Microsoft (MSFT), Google (GOOGL), and IBM (IBM) aggregate vast numbers of connected servers and storage arrays in data centers around the world, and rent that capacity out to multiple customers.

In particular, businesses with uneven or “spiky” workloads like the ability to pay for data center resources when they need them and shutting them down when they don’t. That’s an attractive alternative to stocking their own data centers for peak loads and then only using their full capacity a few times a year.

That flexible, pay-as-you-go pitch resonates with many companies. But at the annual AWS re:Invent conference in Las Vegas last week several big AWS customers said that by moving from legacy systems to the cloud, they’re better able to attract, hire, and keep the best programmers and software engineers.

James McGlennon, chief information officer of Fortune 100 insurance giant Liberty Mutual, said this is an important factor of a big technology upgrade announced last month.

The move to the modern, faster model of micro-services and cloud deployment is making it easier for Liberty Mutual to attract the best and brightest, he said.

“Our army of developers are voting with their keyboards,” for the agile software development model common to cloud deployment, McGlennon told Fortune in an interview last week at AWS re:Invent in Las Vegas.

Now companies in all industries, including insurance companies, car makers, and energy companies, have to offer customers, partners, and their own employees a modern web interface for their services. Many of those services themselves are delivered over the Internet. That means all these companies need software developers and architects to update and improve those services all the time. There’s truth in the new adage that every company is now a technology company. And technology is increasingly synonymous with the cloud.

Daily or weekly additions and updates were simply not possible in the old software development world, where applications could take months or years to build and then more weeks or months to deploy. And what about the daily or hourly updates or tweaks mandated in the Internet age? Forget about it. Modern programmers want to work with modern tools and run the software they build in the most modern environments.

Peter Weis, chief information officer of Matson (MATX), explained that one concern was whether a 133-year-old shipping company could attract the right people. He agreed that Matson’s decision to forego its own data centers in favor of AWS helps it compete for better talent.

“My question was: ‘Could we hire and retain great people and finding people in San Francisco Bay area?” The move to cloud has helped, Weis said. “We were surprised with the compensation required, but we adjusted.”

Speaking on a customer panel at the conference, Weis added that holding onto those people remains his largest focus.

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The moving to modern software and the cloud created what a virtuous cycle. “When you’re known as an innovator, you’re in the A League. Life is short. Who wants to be in the B League?”

Dominic Shine, global chief information officer of News Corp. (NWS), speaking on the same panel, agreed. “You won’t get the great players if you’re on traditional infrastructure.”

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A similar revolution started years ago when developers embraced open-source software over older, proprietary tools and operating systems from Microsoft, IBM, Oracle, and other established tech companies. Young programmers got more interested in learning about Linux than Windows and favored Java over older programming languages. It was only natural that they sought jobs that would let them use those tools and associated skills.

That’s one reason Linux and open source tools now power a big chunk of corporate infrastructure and most of the public clouds.

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