CTP: Welcome to the show Jeff. Why don’t you tell us a little about what you do
at Vanguard.
Jeff Dowds: I play the CTO role at Vanguard. I’ve spent about 40 years in IT;
20 in the telecom industry and the last 20 in the mutual fund industry with
Vanguard in Malvern, PA. In the CTO role, we try to drive the more strategic
technology change initiatives that are taking place at Vanguard. The types of
technology change initiatives we’re working on are probably familiar to most
senior IT people. We have three or four initiatives that are fairly significant.
One is our migration to cloud computing. Another strategic initiative is what
we call next gen apps, a new way of building software. And then a third initia-
tive is lean enterprise. We’ve branded lean enterprise, next gen apps and cloud
under a super change initiative we call DVASS (Deliver Value At Startup Speed).
CTP : Tell us a little about your vision of the future state. Why are you going
that route and what are the business benefits if you can make that vision come
true?
Dowds: I’ll start with cloud. Today we’re very traditional in our approach to
providing compute. We have our own data centers, so we accrue all the bene-
fits of managing your own data centers, and we accrue all the disadvantages of
managing your own data centers. We looked at that situation as an opportu-
nity, with the emergence of cloud computing. We think the source of value,
especially associated with public cloud computing, is just too attractive to pass
up. We had originally started with a cloud strategy that was hybrid cloud, like
most firms. We wanted to build a private cloud, and then emerge into the pub-
lic cloud. We had what I’ll call a delusion of moving workloads back and forth.
At least that’s the way we used to think about it in the early days of thinking
about cloud.
As we went down the path of building private cloud, it became apparent to us
after 10 to 12 months, that the effort to build a private cloud on-prem, and the
associated benefits we would eventually get, just didn’t compete with what you
could get in the public cloud. For us, what it meant to build private cloud capa-
bilities and provide similar automation, self-service capabilities to our custom-
ers at Vanguard [IT shops] such as the cost to architect, design and build all the
automated services that are typically available out of the box in public cloud—
was just enormous, and it would take all of our time.
Even if we were willing to make that investment and take that much time to
build those services, we are still in what I refer to as a provision model — provi-
sioning compute capacity for our peak workloads. These peak workloads at
Vanguard are generated by website activity. We provision our capacity signifi-
cantly above our previous peak volumes. From a cost perspective, we lay out an
awful lot of capital that basically sits on the sidelines the majority of the time.
Our analysis suggested that public cloud offered three primary sources of
value. First, we would end up in a consumption model, so we’re obviously pay-
ing only for what we use. There was a clear cost advantage that we feel is in the
30%-40% range over running workloads in our own on-prem facilities. Beyond
that, there is the speed and agility you get from being in the cloud. Our ability
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