In this episode, Max Clark and Rick Ruskin (Chief Sales Officer at Effectual) discuss how enormous enterprises are leveraging Effectual’s expertise to effectively migrate from traditional data centers into the AWS Cloud.
INTRO: [00:00] Welcome to the Tech in 20 Minutes podcast, where you’ll meet new tech vendors and learn how they can help your business. At ITBroker.com, we believe tech should make your life better, searching Google is a waste of time, and the right vendor is often one you haven’t heard of before.
Max: [00:17] Hi, I’m Max Clark and I’m talking with Rick Ruskin who is the Chief Sales Officer with Effectual. Rick, thanks for joining.
Rick: [00:23] Good to be here, thank you Max.
Max: [00:24] Rick, what does Effectual do?
Rick: [00:26] So, Effectual’s a professional and a managed services company, and we’re totally focused on the client’s journey to the public cloud. Now, going to the public cloud is not unique or niche, basically everybody’s doing it. It’s a massive market. So, we’ve taken the approach of being able to be almost a full service company, in terms of helping them determine where to go, how they migrate from their traditional data center, colo environment, even hybrid environment, and how they should operate once they get there. So, we help them make some determination, we help them get through the strategy to migrate, which is not trivial. And then once they’re there – because being in the cloud is different being in their own data center – we offer a managed service that basically can manage and operate the entire environment for them.
Max: [01:14] Where they go – I mean that’s an interesting question, because that’s not an easy answer, right? I mean, it’s not necessarily only one public cloud versus another. How do you help an enterprise go through that selection process, and what does that look like or entail?
Rick: [01:30] So, obviously there’s three giant ones, and all sorts of other ones as well. Frankly, we’re very focused on the AWS environment and we’ve done it for many reasons: they are the dominant player in that business, upwards of 75% of public cloud workloads are running in AWS. You know, occasionally they’ll ask us about certain aspects of their infrastructure – and there may be aspects that are better suited to be in Azure or Google – that is possible. By and large, when corporate enterprises are going to do a wholesale migration, which is what we’re involved in, AWS has typically been the environment that we recommend. The other part of that is, most enterprises have virtualized their environment. It would be very rare to find a large corporate entity anywhere that isn’t highly virtualized, using VMWare. So, there’s VMWare in the cloud – VMC – which makes migration from data center to the cloud very easy. So, frankly our sweet spot as a company is companies that want to migrate virtualized workloads. It’s not just all virtualized, we do native, but moving from the data center in a virtual environment to the cloud, that sort of sweet spot – and that’s actually the majority of the work we do.
Max: [02:46] Is this something where, you know, a board mandate of cloud migration or an executive team says, “we want to migrate, our CFO is looking at data center expense and saying they no longer want to work on premise here.” I mean, what drives that decision now, in terms of… Let’s go to a cloud, and this is the direction we want to take.
Rick: [03:03] Obviously there’s all different aspects to it and different reasons to go. At the end of the day, if you look long term, the economics can be extremely compelling. It’s not just ‘getting out of my data center’, but there’s a management aspect to it. I mean, you still need your people to manage the cloud environment. The cost of buying all that capex as opposed to now basically having it as an opex is huge – the balance sheet and financials of these companies. And frankly, most companies have said, “I’m a bank, I’m a teleco, I’m a manufacturing company, this is what I do, this is my speciality, I have a massive investment in my IT infrastructure, it’s not core to my business. What’s core is my main business, so let me have someone who does nothing but that.” Obviously, AWS and these other companies have done a great job of building that out… “Let me focus my resources on my core business and let me have someone who does nothing but this run my IT.” There’s a subjective component to it and there’s a very significant financial component.
Max: [04:06] AWS is a very complicated annal with lots of services inside of AWS. For a company that’s looking at a migration saying, “hey, we have an existing IT team, why wouldn’t we just use our existing IT team to manage our AWS environment for us?” What is Effectual providing for that enterprise in a layered service on top of their existing IT staff?
Rick: [04:26] Yeah, it would be very rare for the IT operations staff to not be involved in managing the environment once they go there. There’s two pieces to this. First of all, we have a team right now of about a hundred cloud consultants, between their time at Effectual and where they’ve been before, literally we’ve done hundreds of these migrations. A big corporation is going to do one big migration – they’re not going to do it all at once. They’re not going to switch the light off in the data center and the next day they’re in the cloud… They do it in phases, they do it by divisions, and it takes time. For the most part, this will be the first one they do and the only one they do. You know, we make a pretty compelling argument that we’ve done hundreds, we have a massive amount of experience, it’s not just moving workloads, there’s all the security wrapper that go with it, there’s a lot of compliance work that goes with it. We have expertise and certifications and all that. So, we can make a pretty compelling case to do the migration. Now, if you look at an SOW we write for these migrations, it’s very collaborative with the IT staff of these companies. We don’t have the background, the history – a lot of the time these applications are old, the people who wrote them are no longer there. It’s a very collaborative, work together effort to get the migration done. Once we’re in AWS there’s a lot of work for the IT staff to be doing. They’re going to be developing applications and things like that. They’re going to be tending to evolve their business, but there are a lot of tools that are in AWS that you use to manage an AWS environment that they wouldn’t have been familiar with before. Again, we have experience with hundreds of companies with these tools and with these processes. So, it’s never, “you don’t need the IT staff”, you wouldn’t take over it completely. The migration is totally collaborative, and the management of it – we need all the expertise and all the involvement and the application world, the infrastructure world, to properly manage their environment. Again, our expertise is with all these tools and operations that come with being in the public cloud.
Max: [06:29] A lot of this sounds like this is risk mitigation, where you’re talking about a company looking for cloud transformation or migration. That’s a big unknown project, so they can leverage Effectual to lower risk – or you know, speed the time to market, lower the amount of time… Increase the likelihood for a successful migration, where it doesn’t come back. These are the sorts of things I’m hearing when I read between the lines a little bit.
Rick: [06:54] It is. Max, there’s thousands of gauches in terms of the size and magnitude of the performance, right? You need to make sure the workloads are spread out properly. There’s so much that goes into it. A lot of times, we’ll meet with a client and they’ll say, “we’re going to migrate to a cloud,” and we’re like, “great, what’s your plan?” They say, “well, we’ve got some smart people here.” Not to be flippant at all, but ninety days later it’s, “hey, can you guys come back in here and help us out?” Sometimes we’ll do an assessment for them and we’ll help them outline what that project will be. We file away very typical, professional services methodology where we always do an assessment, then we do an architecture, then we build it out and then manage it for them. We can be called in at any step along the way. Obviously a very successful project is when you get us involved early, let us help you plan out where you’re going to go, let us architect it, and then you pick up where you think is best for your team. We’ve done any one of those components for the customer, sometimes we’re just involved when someone is already in the cloud, and they want us to manage it because they don’t want to learn all these new tools, and sometimes we do the entire project for them. These can be some significant projects.
Max: [08:12] Managing a cloud environment is very different from managing a physical on-premise or data center environment. Now you start talking about cost control, governance, security – different things, right? It’s very easy to make an oops and create a very significant bill for the organization.
Rick: [08:27] Exactly!
Max: [08:28] How do you help enterprises around making sure that all of a sudden they don’t have their database exposed to the internet, or their object storage exposed to the internet, or, “oops, we’ve just spent a lot of money and we weren’t planning for that.”
Rick: [08:39] Well, there’s a couple of aspects to that. First of all, I talked about migrating to the cloud and managing the cloud. If you look at our skillset, we have a team of people who are virtualization specialists, and they’ve done a lot of migrations, maybe in the hundreds – some of these guys have done hundreds all by themselves. But, our security team is one of the biggest teams we have. We have an entire networking team, because the network infrastructure you need when you’re in your own data center versus when you’re in the cloud is totally different, and if not architected or designed properly, it’s going to be a miserable failure. So, we have those kinds of teams. We’ve invested very heavily in some of this compliance that you’ve mentioned. We have a big public sector team. We’ve done business with some of the biggest government, federal and SLED organizations. We have contracts to run the public cloud for some very large US states, partnered with AWS. So, FEDRAMP, which is the highest level of government certification you can have in a compliance aspect – you can’t even compete for that business, you can’t submit bids and proposals without it – we are FEDRAMP-compliant. Actually, it’s a timely question because on Friday afternoon we got a message from one of our security people that has a security practice, that we just got our PCI compliance. So, payment card industry – retail organizations, anyone who’s dealing with that kind of stuff, doing commerce over the web, in the public cloud. So again, it’s not just migrating the workloads and managing them, but part of the assessment and the architecture is… What exactly is your business? We have quite a few business consultants on our team, who are not going to be the ones who are pushing the button on the migration, but they’re going to understand all the requirements and exactly what the client needs, what’s required once they get into the cloud, and then make sure we apply the proper certifications and techniques to doing that.
Max: [10:37] Effectual… Let’s talk about your background a little bit. Effectual has a rockstar team in terms of its core nucleus of executives and founding… Can you tell me about the background of Effectual and how you started?
Rick: [10:46] It’s a very interesting company. So, Effectual was founded by the core team that originally founded Data Pipe, and if you’re familiar with Data Pipe, they grew to be one of the colo and then managed service companies in the world. Rob Allen is our CEO and after the company was sold to RackSpace – a pretty large transaction – he took some time off, thought about what the next step was. Data Pipe had built a pretty big managed service with AWS, actually the first external company to build a managed service in AWS! So, he knew that the days of the data center were coming to an end, and people were not invested in data centers and new kolos. In fact, it was just the opposite. So, he basically built a company focused on migrating companies from data center, from colo, from physical managed service, into the cloud, and applying the same practices they had with Data Pipe. The first thing he did was bring on his CTO, his CMO, his Chief People Officer. These are guys who have been there, they’ve done that, they’ve built out a company and they understand what it takes and they’ve started building the team from there. Very quickly, a lot of the core technical leads that had been with them in Data Pipe, they wanted to join the company. The core foundation of the business are guys who have been doing this for a while, been successful, and we’re doing it again now, except in the cloud and not the data center.
Max: [12:08] So, you mentioned FEDRAMP… FEDRAMP is a really serious government certification that gets you into the government entities. Who are your customers right now? Are you targeting specific verticals, are you looking at specific sizes, specific geographies? Who is a good fit for Effectual and vice-versa?
Rick: [12:26] I’m always asked that question: what’s our vertical focus? I can tell you where a lot of our customers are, you know? Financial services, actually in media and entertainment, we’ve got a bunch there – some big ones, some teleco-related companies, and the public sector, which actually is our biggest aspect. You know Max, going to the public cloud is not a vertically focused thing – everyone is going. No matter what you’re doing. So, we get calls on a daily basis from companies in all aspects of business, that they want to go. Obviously if you’re a government organization – and as I mentioned, we’re managing really large environments for a couple of big states, I’m not sure I can say which states they are – but they’re the big ones. We’re doing business for a number of federal organizations, from the Bureau of Prisons and US Geological Survey for a bunch of DOD. We’re doing the cloud for them, we’re helping them migrate to the cloud, make decisions, getting them involved in AWS and VMWare, and then managing the environment. It’s all over the place. I’d like to say we’re going to be more vertically focused, in fact we are bringing people on board with a lot of expertise like in financial services, because there’s some particular aspects of migrating those guys… You have to be able to speak their languages. For the foreseeable future, we could be doing big migrations and management with almost any kind of company.
Max: [13:54] So this is a big ‘it depends’ question, right? We’ll start with: as you’re evaluating a migration, what’s an average timeline for somebody? Let’s say they’re already in a good place, they’re virtualized and already in HyperV or VMWare, right? What does a migration project look like in terms of time. What would be an expectation in terms of cost around that? What’s the components of that? When you talk about ongoing management of those environments, how do you – what’s the determining factor that comes up with that?
Rick: [14:20] I think the best way to answer that is by giving you an example of something we’ve just completed. In your neck of the woods, a company very close to where you live in Southern California, they had to evacuate a data center that they’d been using. You know, the data centers don’t typically go from month to month, they make you sign long-term commitments, these are big companies. They had an expiration coming up, they had signed a two-year contract to be there – a tremendous amount of money to be in this location. You know, a world class data center and everything that goes with it, and they don’t want to do it, they’re already making plans and doing a little bit of migration. They came to us – in fact, I can say that our partners, AWS and VMWare, came to us because this was a VMC on AWS migration, which is one of the quicker ways of doing it. They said, “look – ninety days. These guys have to get out a couple of thousand workloads. If we miss the deadline, if we’re one day over, they’re going to get that bill and the contract is going to kick in.” So, the first month or so, we did the assessment of the environment, looked through all the infrastructure, the applications – a lot of stuff goes into the assessment. We put a very high level team onto it. The next thirty days, rough and tough – we’ve architected it, which workloads are going to go from the physical to the cloud, everything that goes with that. We make sure the network goes right, make sure the security procedures are all in place. The last thirty days, we hit ‘go’, basically, and all the workloads went over. It was rough and tough with a couple of days to go, we were able to send a note to their landlord that said, “thank you very much, we appreciated doing business with you, but we’re gone.” We got the project done – and that’s typical. Now, that was a good project, they did put a good amount of money behind it because they needed a lot of horsepower. Again, I’m almost simplifying the assessment and architecture phase. People from all those different disciplines in our company were involved to make that happen.
Max: [16:21] And when you get into ongoing management, how we’ve migrated our environment – you know, we’re on VMWare, we’re on traditional compute or we’ve serverless because our architecture and infrastructure supported it. At that point, and when we have Effectual engaged to provide ongoing management, what does that actually mean? What are you doing for companies, and what is that cycle that you’re helping to alleviate with them, and how do you structure your contract and your fees with them?
Rick: [16:47] What we do is pretty much manage all of the infrastructure, so that means that we’re monitoring it, we’re taking the first call when things go wrong. We’re escalating if escalations need to be. We’re making sure that they’re in compliance, there’s a lot that goes with that. We’re even doing things like backing up the environment for them. This is part of the overall – so think about an operations team going into a traditional data center, what are all the things that have to be done from day to day? Make sure it’s operating properly, escalate problems when they occur, make sure it’s backed up – do the DR when appropriate, things like that. Where we usually draw the line is getting deep into the applications, which is again why this becomes a collaborative effort. We’re not going to be the expert at homegrown applications or deep what’s inside their Oracle database. Now, we have a database practice, and these guys really are rockstars in the database world. You know, when we do a migration like the company I just mentioned to you, there’s some easy stuff that goes… It’s always green, yellow, red. Green is no big deal, let it go. Red is you know… We need to think if we’re going to do this, long term. Then yellow is, we’re going to apply our smart guys to work on this. Very often, the database is where a lot of these problems occur. They’re not just Oracle or SQL databases, they may be SI Base and old stuff like that, and they’ve got to get them gone – these are core applications running their business. They weren’t designed to run in the cloud. So, we put our smart guys and database pros on it and we figure out a strategy to get them into the new environment. In terms of – you asked twice about the fees and the economics of it. Typically – and you know, everyone is going to be a little different – typically we have a formula we use to figure out what our service would cost, and roughly it runs about a third of the cost of their cost to be in AWS or to be in the cloud. That’s a guideline. If it’s a bigger environment, we get some scale out of it, the percentage might be lower. If it’s smaller, it might be slightly higher. As a rule of thumb, that’s a good estimate.
Max: [18:55] Right, and then you’re enabling the IT teams to focus on enabling the internal business and you’re enabling the IT team to do what they’re supposed to be doing on a day-to-day basis?
Rick: [19:03] Exactly, exactly.
Max: [19:05] Awesome, Rick – this is great, thank you so much for your time, I really appreciate it.
Rick: [19:10] I appreciate it Max, great talking to you today. OUTRO: [19:12] Thanks for joining the Tech in 20 Minutes podcast. At ITBroker.com we believe tech should make your life better, searching Google is a waste of time, and the right vendor is often one you haven’t heard of before. We can help you buy the right tech for your business. Visit us at ITBroker.com to schedule an intro call.