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Danish transport and shipping giant Maersk has shared details of the cloud-first strategy it is pursuing as it seeks to retain its market-leading position, while surfacing new opportunities for revenue growth.
Speaking at the DevOps Enterprise Summit (DOES) in London on 25 June 2019, Rasmus Hald, who heads up Maersk’s cloud centre of excellence, said the firm was facing a number of wide-ranging competitive threats.
These include facing down threats from new, disruptive market entrants that are using apps and data to refine the logistics process for their customers, which has prompted the firm to rethink how it sets about fighting back.
In the past, for example, new market entrants could sometimes be dealt with by increasing the capacity of its physical shipping networks, with the addition of more vessels or container terminals, whereas now it requires a more technology-led approach.
“We are being disrupted by small startups… that are removing the complexity of our industry with smooth digital solutions about end-to-end logistics,” he said.
“At the same time, we see huge companies like Uber, which recently launched an app in the US that gives truck drivers routes on their smartphones, and they’re completely smoothing the way [there too].”
The firm is also looking for ways to dampen down the environmental impacts of its operations, given the shipping industry is reportedly responsible for “2-3%” of the world’s total carbon emissions.
“We are 20% of that as the market leader, so we are quite polluting as a company, but we see this as an opportunity because we can really impact the carbon dioxide emissions of global trade,” he added.
This kind of work is of increasing interest to Maersk’s clients too, and this is part of the reason why the firm recently partnered with high street fashion retailer H&M on a project that enabled it to ship its wares from the Far East to Europe on a carbon emissions-free basis by swapping out fossil fuels for biofuels when powering its fleet.
“We need to change, and [introduce] new products faster, and that puts up a new set of requirements for our technology,” said Hald.
As such, the company has adopted a cloud-first policy whereby anything new the company builds is hosted in the public cloud, unless there is a “really, really, really good reason not to”, he said.
In addition to this, the firm also follows a procurement strategy for new purchases that prioritises the use of software-as-a-service (SaaS) offerings where commodity IT products are concerned so its technology teams can focus their efforts on “business differentiating” offerings.
Rasmus Hald, Maersk
“Why in the world would I run an email system in the year 2019? You might have constraints, like legal requirements [that stop you], but if you don’t, why would you have the hassle of running an email service when you can buy great services off the internet that probably give you a better service than you would ever be able to provide yourself,” said Hald.
“[Our philosophy is to] buy other people’s software as a service and then focus our efforts on building great software for our users, [and] for our customers.”
Anything the company develops from scratch is done so using platform-as-a-service (PaaS) technologies, which means its engineering teams can get to work on interesting projects, which is important from a staff retention point of view too.
“We’re not the specialists at using Windows or Linux, so why not just consume the best of the cloud platform at scale as a service? We see tremendous value in not having to build from the [operating system] up,” said Hald.
“One of the biggest constraint in our industry is getting warm hands on the keyboard, and if we spend all our engineers’ time on patching operating systems or running email systems, I’m not sure we’re spending [time and money] where it differentiates us in the market.”
Given the amount of stock the company places in letting its cloud provider community do the heavy lifting for it, Hald said the firm also has a “co-innovation” tenet to its cloud strategy.
“We strongly believe cloud providers should not be vendors – they should be business partners. And this is a paradigm shift for many people in technology, particularly in procurement,” he said.
Shaping the cloud strategy
The company’s cloud strategy has been shaped over a series of years, said Hald, with the current version officially classed as its third iteration, as the firm has moved to refine its processes and prioritise self-service to speed up the time it takes to access the compute resources it needs.
“When we moved to the cloud the first time, we cut down the lead time for an environment from 100 days to 85 days. This is self-inflicted lead time… processes that are keeping you from moving faster,” he said.
“We also had 30 people involved in a classic delivery, and we figured the cost was around €40,000 to provision an environment, in work time, handovers and meetings and what not.”
The second iteration, two or so years ago, led to Maersk embracing elements of Gartner’s bimodal IT approach, whereby one part of the business is focused on sustaining the business, while the other carries out more experimental work that can help the firm keep on top of competitive threats.
Or, as Hald put it: “You have a startup mentality on one side and corporate IT on the other, [and] I know lots of enterprises that do something like this, but it comes at a price.
“There is no re-use of capabilities here. So all the capabilities that come from building functional IT does not apply to your fast product delivery.”
Everything Maersk has learned from going through this process is now informing its cloud strategy, which has been termed the “unified delivery model”, and combines it efforts to embrace agile ways of working too.
“We’re really leveraging cloud to change how we work. Cloud makes a lot of technology constraints go away, but if we don’t change how we work we won’t realise the true value of cloud,” he said.
“We are trying to use the rituals from agile to scale and become more inclusive as a company.”
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