Q&A: Accenture's CTO Talks Cloud, Security And The Future Of The Channel Heavyweight

Channel Heavyweight Looks Through Crystal Ball

After launching its multi-cloud platform earlier this year, Accenture -- No. 2 on the CRN 2015 Solution Provider 500 -- claimed it would be the largest enterprise cloud company without any data centers.

Recently, CRN talked with Accenture Chief Technology Officer Paul Daugherty, the man who made that claim, to find out where the channel behemoth stands on some of the channel's hottest topics and where it is taking itself next.

Daugherty touched upon a set of different subjects during the sit-down, including opportunities for solution providers in the cloud market, the future of security, recent acquisitions and Accenture's focus for the year ahead.

He even made some predictions into why he feels cognitive computing will be the "next big thing" for businesses, hitting the mainstream within the next two to four years.

Interested in what he had to say? Read on.

Where are Accenture's biggest cloud growth opportunities for the near future?

It is really many different areas, and it is very broad, because we see it impacting many different parts of the IT stack in different ways. The most obvious opportunity for us -- and I think this is a massive opportunity given the type of expertise that Accenture has -- is in the Software-as-a-Service and cloud application spaces. A lot of our business is deploying technology solutions for our clients and leveraging partners, using everything from SAP to Salesforce.com to Google, to Amazon to Microsoft. … That is a huge opportunity for us and for the marketplace generally given that the majority of client application workloads are still on-premise workloads.

I think as solutions become ready, clients will want to move to cloud-based solutions. That is a big area for us.

You mentioned there are multiple opportunities, is there another big one aside from SaaS and cloud applications?

Yes. Another big area is cloud infrastructure and cloud infrastructure management. It includes the entire Accenture cloud platform and what we are doing in that area, which is providing a platform for clients that allows them to get the cloud services they want, the way they want it and from the providers that they want it from. We provide our platform as a standard way for them to provision cloud services -- integrate them, manage them and orchestrate them -- so that they have some flexibility and portability to decide to use which cloud they wish to use for what, and keep flexibility to migrate between clouds.

We think that is a big opportunity for us, and that is why it is around our Accenture cloud platform that I made that statement [last month at the IDE Platform Strategy Summit] about seeing ourselves becoming the largest cross-cloud company without any servers or data centers. I believe that platform capability provides us with the ability to manage an awful lot of cloud problems for our clients by leveraging the strengths of the Amazon cloud and the Azure in the marketplace rather than having to provide that capability on our own.

What are some of the obstacles in building a cloud platform without data center infrastructure?

There are a number of things. One of the challenges is that all the products are different in terms of how you provision what their interfaces look like. Part of the challenge that our clients have is that if they are using different cloud providers across different parts of their business, they have to deal with that complexity and have teams trained in that technology. What we are doing with the Accenture cloud platform is providing a standardized, single-pane-of-glass interface, so that it is simple for the clients, but it moves the complexity to us. … One of the other challenges is helping our clients navigate the change and help them decide what they move to the cloud and when, and how do they move it to the cloud.

What kind of solutions and capabilities have you created in order to handle those complexities?

We have developed some tools, workload migration tools and cloud assessment tools and things, that help us look at workloads that our clients are running and look at their application estates, and it helps them decide on what to move and when. … We have also built a discovery capability, because one of the challenges that our clients have is cloud sprawl, where lots of departments are doing things that may not be monitored or controlled consistently. They might not be secured consistently; they might not be cost-effective because they might not be leveraging enterprise improvements that some of the clients have with some of the providers. So, we have a discovery capability that allows clients to look across the products to identify the use they do have from all the cloud providers, and bring that back into a centralized place, and make the best decision to see if it is cost-effective and secure.

What does the competitive landscape look like for Accenture as a cloud platform provider?

There are competitors in a few different angles, I would say. There are competitors in the single-cloud scenario where you have some tools that help you do some of these things in a single-cloud environment, but we think the multi-cloud capabilities are a really important value, particularly for the larger enterprises like the Global 2000s, which are the type of organizations that we serve.

What differentiation are you providing from other multi-cloud providers?

The differentiation that we are providing is putting the capability together end-to-end and then with the assessment and migration tools, it allows you to see the orchestration, the billings, the management across the different cloud providers, so we are going to go further up the stack than other providers. The other thing that makes what we are doing unique is we are trying to do this across hybrid environments as well, because not everything can go into the public cloud right now, although we are doing a lot about coming to the cloud. So, being able to provide these capabilities across the hybrid cloud environment, and tailor that to the hybrid cloud environment that our clients run, is really important, so they can get that single view across the private cloud and the public cloud through a single set of tools.

As a cloud provider, how do you manage customer cloud experience during an event like the recent Amazon Web Services outage?

We have some clients that we support during an outage like that. … A real advantage to the public cloud environment is that first of all, they are highly available and resilient in their own right, and often more so than the data centers that our clients run on their own.

But, when you do have problems, if your archetype is smart, you can use the resilience that is built into the cloud providers to your advantage. Not everybody does that, and that is usually where companies run into problems if they don’t build those types of capabilities into their own applications. That is something [that] more mature users come to the cloud [for] and will take advantage of.

Can you compare the strengths and weaknesses of AWS, Microsoft Azure and Google?

I won't get into direct comparison. We work across all of them, and I think they all have a lot of industrialized capabilities. I think AWS is ahead and is innovating very fast. Microsoft is investing very aggressively in Azure and has strong innovation path as well, and Google is doing all the stuff that they are doing too. I think it is all fit for the right application and fit for purpose.

Which company do you think will end up on top of the market?

We believe that there will be multiple winners and multiple companies that are successful with the public cloud capabilities, but it won't be a lot, it won't be dozens. It will be a couple or a few because it is a scale game, and those who are investing at scale will be the ones that are going to be successful. I think there is room for all three of those companies to be very successful with the different strengths they have and the different types of understanding that they have of enterprise computing requirements.

I won't get into the specifics of one vs. the other, but AWS was first out of the gate and got that early position in the market, Microsoft is moving very fast and very aggressively with a great set of services, and Google has been building its enterprise capability out with the recent moves they’ve made over the last year. They are the three that we think will be successful in the enterprise market.

Are those the three you see gaining the most market share in cloud?

In public cloud, in terms of capabilities around infrastructure and platform level services that they provide, if you move off to the applications and other areas like we were talking about earlier, there are other areas of cloud that will allow for successful companies.

I think we will be looking at what they do around providing infrastructure in the cloud, they are the ones we are seeing with the scale and staying power in the market right now.

There are others we are watching. The Alibaba space has made an announcement recently about their cloud environment and that they want to leverage it. So, we are watching what others do and they are coming from a different perspective both geographically and in how they are approaching the cloud, so, they are one to watch and it is very early days for them.

How will Accenture customers benefit from the FusionX acquisition?

FusionX provides an important set of capabilities for us, specifically in the cybersecurity space. Specifically around the ability to model and anticipate threats.

They kind of fall under the category of companies that help you before you have a problem, they make sure that your environment is resilient and everything. They have a very innovative set of services for doing that. It is an important product that fits the category of services that we have to meet those needs for clients.

With FusionX, what does this mean for your relationship with other security vendors that you now have this capability in house?

I don’t think that it will have that much of a dramatic effect on our relationship with vendors. We often work with multiple vendors and vendors who compete in the marketplace, and we work with many different clients and a lot of them have different needs that demand different solutions, so I don’t think that it will have a tremendous impact. I think the kind of solution and service that they provide are fairly unique in terms of the way that they deliver to the clients.

Is this [FusionX] acquisition part of a trend Accenture is moving toward in the market, or an exception to the trend of acquisitions you have been making?

This acquisition is part of a broader set of work that we have been doing over the last few years that follow the moves that Accenture has made.

You know, we have made over 40 acquisitions in the last few years, we're focused on augmenting capability in areas where we can bring in some innovation or bring in advanced capability and technology that helps accelerate our business in different ways.

FusionX fits that strategy for us, and it wasn’t an exception, but it fits that strategy -- filling in and bringing that additional capability. In this case -- that is, in security -- we will continue to look at other moves that continue to bolster our capabilities in security.

The market in security is so ripe right now. The risks are only escalating and the threats are only more complex. So, [we are] extending the capabilities that we have with broader capabilities like the ones like FusionX provides. So it is really important for us.

Are all of the major security breaches driving sales of security technology?

I think the problem is real and it is complex. I think what the breaches are doing is making people aware of the risks. I don’t think the breaches are creating an artificial buying pattern. I think that it is causing executives in companies to come forward to really look carefully at what they are doing and really shore up their businesses. It's beyond technology; it is governance and policies you have in place, it’s the people, the way you train, it’s the underlying technology and making sure you are secure.

So, I think you are right, I think it is motivated by the breaches that people see in their own organizations, or a competitors, or just well-publicized incidents, but the threats are real, so we feel that the investments companies are making are warranted to make sure that they are in the right division.

Do you think strong security will end up playing a larger role in business in the future?

We believe that going forward that we are going to see a distinction in companies that we are calling a "trust-based differentiation." Some companies are far more secure, and they demonstrate that they are more secure and are able to take better stewardship over your information as a customer.

They are going to have an advantage in the marketplace. So, it won't just be the financial impact and the risk of the intrusion, but we believe that it will create a better brand around their ability to secure and protect. Their customers, their employees and their information will have a real advantage in the marketplace.

With all the recent data breaches, are we in danger at all of "breach fatigue" among customers?

Yeah, I hadn't thought about that, I hope not, I don’t think so at this stage, because I think the risk is real and enough companies of any size have enough real experience with various forms of incidents. I think they know it is real.

Is there a point where you can invest too much in security?

I think the challenge for an organization is knowing when you have done enough. And knowing what the appropriate amount of investment is.

One of the lines that I believe in and I have heard used is, "There is no finish line in security."

You are never done because the technology changes. You are implementing new software and new technology all the time and introducing capabilities. You need to make sure it is secure because the sophistication of the attacks is increasing. So, there is no finish line, but that doesn't mean that you can invest unlimited sums of money to fix the problem. The challenge that so many of our customers have is distinguishing what is enough.

And that is why, in addition to FusionX in the cybertechnology front, we are making investment in our security strategies practice as well, because helping clients understand those issue is what clients are asking for: "How do I know that I am doing enough? And how do I know I am making the right investments, the prudent investments?" -- in an environment where you don’t have an infinite amount of money to spend to protect yourself.

What areas within security is Accenture looking to invest in?

The areas that we are targeting for further investment and further growth are the security strategy and advisory space that I talked about earlier -- we see a lot of need from our clients ... in those areas -- and that is an area [where] we are looking to do more.

Another area for us is in the managed services area and helping clients manage the security environments and security areas of business more effectively. Given the somewhat unique end-to-end of Accenture's business -- where we do everything from strategy to technology work through outsourcing work -- we are able to piece all of that together, providing a single service to our clients in a managed fashion. That's a value that is in high demand in the marketplace, and it is another area we are looking at.

What areas of the security space do you see are growing the fastest?

I would say that there are two areas that I think are most active right now and changing very fast.

One is securing the broad set of assets that are outside of the data center, or what you typically think of beyond the typical end-user devices -- things like the PCs and the phones -- and looking at securing the manufacturing plant.

Securing the utility substation, securing automobiles and transport, that area is an area [where] there are a lot of new challenges as we connect more and more things together. Looking at bringing in the right new and innovative technologies to secure those areas is something that we are looking at carefully.

And then cybersecurity as well, we are looking at new technologies, like what FusionX brings to bear -- new techniques, everything from machine learning to other types of technologies that are being applied to more effectively combat the risks that are already out there. So, those are areas of interest to us as well.

Outside of cloud and security, what's the most exciting new technology you're seeing?

One of the areas that we are looking at a lot right now is cognitive computing. Artificial Intelligence and cognitive computing solutions will be coming into the mainstream from a business perspective, and change the way we solve business problems.

There is a lot of talk around that right now, but it has not hit in a big way yet. But we believe that cognitive technology will hit and will move more into the mainstream.

We are doing work now with some companies applying some of the early technology solving these business problems. But to date, cognitive technology has been sort of on the fringe of things. However, we believe it will move into the mainstream of the architectures that companies build. Looking forward, I think we will see that evolve and that becoming something that gets more attention in the marketplace.

What can cognitive computing do for the tech industry?

What cognitive technology will do, is it will allow us to create software that learns from itself and adapts to change all on its own. That not only allows us to have breakthroughs, not only in [the Internet of Things], but in other areas as well. So that is what we are doing a lot of research around, and we expect to be more game changing as you look at cognitive technology hitting the market.

It is important for Accenture, because we have a lot of people that understand industry business processes and technology, and combining cognitive technologies along with it, you can really accelerate the people who deliver business solutions for our clients.

What do you expect to be the fastest growing technology areas for Accenture in the next 12 months?

Generally speaking, the thing that is driving our business is our shift, broadly, across industry, to digital technology, which embraces a lot, including mobility and IoT, but that is the biggest single hand that is at scale business for us. That is where the action is right now. Industry by industry, helping our clients apply these new technologies to turn themselves into digital businesses going forward.

I expect that to really just accelerate and keep growing, and cloud is in there because cloud is powering those types of digital solutions. It is the early IoT solutions that are part of that in terms of new ways to digitally connect products with customers.

That is the biggest growth going forward and we think we are ahead. With our Accenture digital business, we really created the market-leading additional capability in the market that we are in and we expect to continue to build that.