Bringing effective digital transformation methods to the open source world

The mission of the Red Hat Open Innovation Labs, displayed at the reception area.

Technology has become such a competitive advantage that successful businesses are no longer financial institutions, manufacturers or retailers first, but tech companies that just happen to play in their respective industries, says John Allessio, VP of Global Services, Red Hat.

Technology can offer the agility to adopt new business models even before incumbent models decline, he said, noting that industry disruption can take over very quickly, "before you know it".
"You have to invest in these new business models before it's profitable," he said.

Allessio described how digital disruption is changing things everywhere, what it takes to digitally transform, and the advantages gained by early adopters of digital transformation.

Red Hat customers are turning themselves around accordingly. Deutsche Bank is moving from outsourcing to insourcing technology, Allessio shared. "They found that they could drive more innovation, more capability by having more control and looking at the entire infrastructure and architecture as an asset to drive the business forward (versus) looking at it as a cost centre," he said.

Many are still grappling with the new digital age, however. In a Red Hat survey, 59% of respondents said they are not ready to transform digitally, and listed their priorities in descending order as developing a cloud strategy (52%), building new apps quickly (42), followed by optimising and modernising existing IT (39%). Security was a close fourth, with 38% of respondents listing it as a priority.

Easy visualisations within the Singapore lab show the advantages of a residency-based lab programme.

Visualisations within the Singapore lab show how to effect change.

What Red Hat Open Innovation Labs, newly-launched in Asia, can do is make the journey easier by showing the way not just with open source technology, but by instilling an open source mindset towards implementing change. In terms of technology, Deutsche Bank replaced a platform-as-a-service (PaaS) solution with Red Hat OpenShift, consolidating 45 to four operating systems and resulting in 83% efficiency savings. OpenShift is a container application platform that brings docker and Kubernetes to the enterprise. It had taken nearly 10 years to get 20% adoption on the PaaS, but 40% OpenShift adoption in one year, Allessio said.

Open source technology has also helped India's BSE, formerly called the Bombay Stock Exchange, to scale. The stock exchange partnered with Red Hat to build a new trading system using open source technology. Today it is the fastest trading floor in the world, completing transactions at an average of 6 microseconds instead of 10 milliseconds*, and expanding from 10 million to 400 million orders per day. Hardware costs are down 66%, while total cost of ownership has fallen by 90%.

A four to 12-week lab programme basically makes best practices from Red Hat's consultancy experiences open source, and formalises the benefits of getting all stakeholders into the same room to work on a project. The labs ensure for example that software developers get more visibility into the intent behind software that has been requested, eliminating misunderstandings and delays.

Allessio said the labs can:

• Enable people with best practices and tools to foster an collaborative, transparent open culture
• Introduce continuous and interactive automated processes that promote agility
• Provide integrated, hybrid, open, and interoperable technology

David Worthington, Open Innovation Labs Leader, Red Hat Asia Pacific, said that the structured programmes cover three phases:

- A pre-work discovery session to identify key challenge and goals, introduce Red Hat's push button infrastructure, which lists software from Red Hat and third parties that can be adopted, menu-style;  and development of personalised learning plans for participants. Each participant receives a one-year Red Hat learning subscription with access to 50 courses to prepare for residency and beyond

- The actual residency, during which methods such as agile, scrum, and DevOps are introduced for a chosen project. The process culminates in a demo day, during which participants show their organisation the new way of working and the apps developed

- A retrospective session, during which Red Hat helps participants to create a backlog (app wishlist) and roadmap so that the organisation can take the new way of working back into the organisation and continue the new way forwards

Austin presents what participants said about their Innovation Lab experience.

Julian Austin, IT Development Manager, UK-based Motability Operations, had a positive experience with Red Hat Open Innovation Labs earlier this year. The company supports people with disabilities with mobility solutions, and has 630,000 customers as well as 5,000 dealers in its network.

With customer expectations evolving, Motability needed to increase business agility and decided to invest in a labs experience. At Red Hat Open Innovation Labs Motability created part of a new customer engagement platform on OpenShift. With the new way of working, the company received feedback on draft features and could improve them on the fly, instead of waiting for feedback after the platform is completed, as is typical. "This is so much cheaper than the traditional way of working," Austin said.

"We had a lot to learn in a very short space of time and having (Red Hat) guys on tap was brilliant. It was so important to get out of our offices, our ways of working, into a different space. Getting away from culture, the old ways of working, was a key reason why we were successful."

Since June 2017, Motability has migrated to OpenShift Dedicated** 3.4 from the lab environment, and then to version 3.5. The company has introduced the new methods for creating software, and expects a new project that is integrated with its existing services to go live by October.

"We're working at much faster pace and getting it right the first time," he said, explaining that the cost of rectifying mistakes early is much lower than having to do it much later in the production cycle. "People love working this way."

While Austin liked the opportunities to learn, fluid work environment and improved team spirit, he also noted that there are still challenges to the experience, particularly with scope definition and people who could not spend the full period at the labs. "We had people on holiday, we had people who had meetings to go to, who didn't finish the whole (experience)," he said. Context shifting from work to the lab experience also took time, he added.

*There are 1,000 milliseconds in a second. There are 1,000 microseconds in a millisecond.

**OpenShift Dedicated is a private, high availability OpenShift cluster, hosted on Amazon Web Services (AWS) or Google Cloud Platform (GCP) and operated as a cloud service by Red Hat.