Telstra embraces cloud to cut costs and combat rogue IT

In 2011, Telstra announced it was investing AU$800 million for cloud offerings to customers. But the company hasn't just been focusing on selling its cloud services, it's also trying to promote the use of cloud computing within the organisation, according to Telstra director of enterprise services, Lalitha Biddulph.

Biddulph's team not only supports the entire IT infrastructure for Telstra's enterprise and government go-to-market business. The infrastructure, in turn, supports Telstra's 39,000 staff.

Since joining Telstra 18 months ago, Biddulph became aware of staff procuring IT services outside without notifying the IT department, something that is referred to as 'rogue IT'.

"There are always those people who hide the services under their desks that you never really find out about until much later," she said at the Gartner Application Architecture, Development, and Integration Summit 2013 on Monday.

This behaviour is fuelled by general mistrust of IT departments and perceived inefficiencies involved when procuring IT services through official in-house channels. With the consumerisation of IT, workers have become more confident in securing their own IT resources.

Telstra workers were taking on cloud services behind the company's back. It is only when those services fail that the company becomes aware of these services. Biddulph recalled one time when a staff member introduced a Salesforce.com software-as-a-service (SaaS) offering for an ordering system.

"It was a fantastic solution. They deployed it and we knew nothing about it," she said. "The first time I found out about it was when the interface failed and orders started getting back up."

Biddulph's team was unable to readily identify the fault because they had no way to monitor the service.

"We eventually figured it out," she said. "The staff had basically deployed a solution without engaging IT who they thought was too expensive, too slow, and too unimaginative.

"To this day, Salesforce.com has a bad rap in some parts of Telstra because of that incident but it had nothing to do with Salesforce.com — it was to do with the fact we deployed a solution we couldn't see from end-to-end, so we couldn't identify where the breakage was."

Telstra's IT services department needed to find a new approach to be able to add value to cloud services so that staff would not feel compelled to seek out offerings themselves.
"I came to the conclusion we had two choices: either I can evangelise cloud in Telstra or be the queen of the legacy world and only look after legacy boxes and leave [staff] to do what they wanted," Biddulph said.
She went with the first option.

This approach didn't just work for internal IT services, but to the services Telstra sold to external enterprise customers as well.

Biddulph highlighted one particular offering that needed to be tested internally within the organisation before being rolled out to customers. The product would be configured by Telstra and run on its internal infrastructure and generate reports customers could download through a portal.

The initial estimated cost of building a portal, deploying the product, and associated integrations amounted to roughly AU$15 million, a price Biddulph found hard to swallow.

By adopting a whitelabel portal and a public cloud service and integrating them into Telstra's backend, the company was able to trial the offering for just AU$3 million.

"We actually provided a cheaper solution and the biggest cost was integrating it into our backend," Biddulph said.

But taking advantage of cloud computing isn't just about cutting costs, something Biddulph has to stress to Telstra workers.

"The big difference now is we're engaged in the beginning of an [IT] program," she said. "We are the ones that define how the solution is going to work, we're the ones that define wether the data is fit for purpose to go into a public cloud, and that using whitelabel products isn't going to dilute Telstra's value proposition."