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Julie Devoll, HBR
Welcome to the HBR Audio Quick Take. I’m Julie Devoll, editor of special projects in webinars at HBR. In this digital leader series sponsored by Equinix, we ask technology executives about the strategies their companies have adopted to create a digital advantage. In this episode, we’re joined by Hans Koolen, senior director, commercial IT and tech innovations for Royal Philips, to discuss everything from the challenges Philips needed to overcome with their technology investments, to the key principles that underpin their infrastructure. Hans, thank you so much for joining us today.
Hans Koolen, Philips
Sure.
Julie Devoll, HBR
Let’s start. How does the enterprise IT team help Philips accelerate its strategic plans?
Hans Koolen, Philips
It can be huge. This is where technology can have a true transformative impact. If you think about how the industry oftentimes talks about two speed IT, well it suggests, it kind of suggests a classic IT that is allowed to move at a slightly slower pace compared to business IT. When you think about it, you’ll find out that that isn’t logical. It shouldn’t be the case. Corporate IT or enterprise IT, as I represent here today, we are confronted with shorter routes from concept to cash. The idea to market journey is no longer a measured in months. Why should enterprise IT operate at a slower pace? In order to support the business, you’re going to have to provide an infrastructure and an application platform which leads the way instead of drags you down.
Julie Devoll, HBR
What were some of the IT challenges that Philips needed to overcome to become a digital leader?
Hans Koolen, Philips
Julie, you’ve got to remember that Philips is a 129-year old company and it’s transforming to become, be and remain one of the world’s foremost pioneers of digital healthcare. There’s a true sense of urgency at Philips to become hyper scale, hyper agile. The urgency comes from our desire to innovate faster and keep pace with perhaps some smaller companies or digitally native companies, so investment for us in a modern and flexible infrastructure was a central enabler for the Philips strategy to become the leader in digital healthcare that we want to be.
Julie Devoll, HBR
Tell us about the key features of the digital infrastructure you built to enable this kind of leadership.
Hans Koolen, Philips
The end goal of course is to make sure that all your applications, all your infrastructure, is 100% to the cloud. A hybrid model is sort of acceptable in the interim, but it’s not the end goal. Now the cloud-based connected infrastructure will reduce existing costs and enable a more efficient way of developing. In short, it enables a faster time to market. This isn’t a cost-based strategy. Certainly the cost is a benefit, but it’s never been a driver, yet the ambition for us to be more agile and operate faster is what’s driven us to go to cloud and go to cloud in the way that we have right now over 90% of our enterprise workloads run in the cloud.
Now on top of that, when you do that, when you move to such a skill to the cloud, of course your networks collapse into the cloud. You may need a broker of some sorts when you’re multi-cloud like we do for enterprise IT. That’s where Equinix for us acts like one of those brokers. However, you do need to have a critical look at the need to own your own networks of any kind, whether you do or not.
Julie Devoll, HBR
You mentioned Equinix. How does Equinix help you bring together and interconnect your digital infrastructure?
Hans Koolen, Philips
Equinix’s ability to serve Philips‘ global IT needs and provide access to the networks and clouds, they have been instrumental. What’s exciting and I think people in the industry might not really grasp that until you feel that sensation, is it literally sometimes is a phone call or email away to increase capacity or expand regional capability to Equinix and just build a soft logical configuration on their network and you’re hooked up and ready to go. Lead times, wait times, digging up the road, those are all terms of the past. To us, they sort of died with the 20th century.
Julie Devoll, HBR
As you look toward the future of digital infrastructure, what do you see this looking like in three to five years?
Hans Koolen, Philips
Well, I think talking to a lot of CIOs and this is not specific to us, but I think you’re seeing this across the industry is older companies are struggling with legacy technical debt and in three to five years the CIO community will be heavily focused on trimming back the technical debt to be replaced with a server or even operating system agnostic serverless infrastructure or microservices. I believe containerization helps us to get there, but it still is going to generate overhead and is an interim step for us to get there.
Julie Devoll, HBR
What steps is Philips taking now to get ready for this future? Are there platforms or technologies that you’ll adopt at greater scale?
Hans Koolen: I think what we’ve done up to this point is move to the cloud, cloudify, and we’ve had a critical look at the networks that we’ve deployed and now we need to get rid of more overhead, perhaps look at operating system based VMs and replace monolithic code with a serverless and modular, wherever that is possible.
Julie Devoll, HBR
How would you describe your partnership with Equinix?
Hans Koolen, Philips
We’ve been working with Equinix for six years now. They’ve become a core enabler to help us bring together and interconnect our global cloud and ethernet backbone for our enterprise IT infrastructure. In our drive to make enterprise IT work faster, respond faster, Equinix have made themselves an important part of the puzzle to get there.
Julie Devoll, HBR
Hans, thank you so much for joining us today.
Hans Koolen, Philips
You’re more than welcome. To be honest, it’s been a privilege and an honor to be here, to talk to you, Julie, and I hope the listeners of this recording will take some benefit from it. Once again, thank you very much for the opportunity.
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