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PegaWorld iNspire 2023: Panel - How the Pega 'as a Service' experience unlocks the power of Pega for leading enterprises

Hear direct from some of Pega's top clients about the value they’ve realized with the Pega as a Service experience, powered by Pega Cloud. Participating clients will share both their successes and challenges and how they overcame them. Watch this Spark Talk and hear about client experiences moving to Pega Cloud and how the Pega aaS experience helps improve and accelerate business outcomes with:

  • Rapid time to market
  • More stable and scalable solutions
  • The ability to keep current with the latest Pega architecture and capabilities

Transcript:

- So thanks all those that joined us today. We're gonna take a little bit of time today to just talk about how the Pega as a service experience is really unlocking the power of Pega for all of our enterprises. We've obviously had a lot of discussions. We're kind of coming to the end of Pega World right now, but you probably heard a lot about all the great new innovations and capabilities and technologies that are being released from Pega and how really a lot of those are being empowered by our Pega Cloud service. And so obviously seeing across the market, everyone's really making this big transformation of moving to the cloud and our Pega Cloud services is really helping enable that, the power behind Pega and bringing those capabilities really to the hands of everybody. I think also part of that also is just keeping our clients up to date and up on the latest capabilities is one of the biggest things that we can really talk about. And so I think today we're kind of joined here with first off, Steve Keating from Lloyd's Bank Group, and also Frank Guerrera from our Chief Technical Systems Officer at Pega. And so we're gonna have this kind of an open dialogue, discussion, then we'll also open it up for anybody here that has some questions about it. So I guess I'll kick this off, Steve, if you want to just introduce yourself and what you do. Yeah. I'm Steve Keating. I've been in IT for 30 years. Started off life back in NatWest Bank in 1994 as a PL1 assembler programmer was 20 years in Nat West. Did a couple of large integrations, RBS, NatWest integration and Ulster Bank integration. Moved to Lloyd's in 2014. Did a couple of roles at the start till 2015. And then I moved into core platforms where I own the capability for Pega in the bank. Also CRM found that on some data power message broker capability as well.

- Excellent. And Frank, you wanna introduce.

- Yeah sure, I'm Frank Guerrera, Chief Technical System Officer at Pega. I've been in technology for a really long time. Actually, my first job was working at Chase Van Bank in New York, and I actually manage a rack of 30 board modems. Really high speed back in the day. But I've been in Pega for six years. I'm responsible for all of cloud architecture, engineering, operations, security and compliance, as well as all of global client support.

- And just to introduce myself as well, I'm Thomas Mack. I lead our Pega Cloud business, so helping really support the business strategy and our commercialization activities and some of our as a service experience. So I guess just to get this kind of started, Steve, can you tell us a little bit about I guess the Pega relationship and how Lloyd's has been leveraging Pega and how long is?

- Yeah, so Lloyd's Banking Group is 325 years old. So it's well established. We've got 26 million customers, predominantly based out the UK. So we're concentrating on commercial and retail customers. The relationship with Pega goes back to 2004. We've got 32,000 users of Pega split across the five business areas. So we've got commercial banking, consumer, lending, consumer relationship, institutional banking and insurance as well. We process roughly 45 million cases per year. We've got 43 applications. So it's quite a big estate, you know, so they support all those five business areas. We currently, you know, in a modernization program where we are moving to Pega Cloud, we've got eight virtual private clouds that support those five business areas that's currently in flight.

- Ah, that's incredible, so incredibly large estate that you're managing right now across Pega. And I think we really came into helping really work with you, back in, what was it, 2020 now? I think when we started, you made kind of the decision to move to really leveraging Pega Cloud for your Pega experience. So can you tell us a little bit about what went into that decision? what made you choose to kind of move to the Pega Cloud Service? Yeah, so the original, so we signed the contract to move 25% of the estate to Pega Cloud. So it's a risk remediation driven. We had risk, we had the estate as it was then we had 12 stacks on, you know, DB2 and Oracle different estates so we had currency risks there. The estate, we had big monolithic stacks. One of the enterprise stacks had over 30 applications. So the cost of change and cost of upgrades was expensive. And, you know, it was kind of deemed slow. So we signed a contract, you know, listen, with Pega we worked with the account manager to see the attribute, you know, what good attributes the evergreen and cost avoidance, things like that. So we started that journey off moving to 25%. And pretty quickly the success of that and the first couple of applications that generated new work and that generated is increasing the contract to move a 100% and modernize the whole Pega estate. And we double the size of the virtual private clouds that we had from four to eight.

- Incredible, so were there any challenges that you faced when you went through this move?

- Yeah, so I mean, the challenge is, so there's lots, you know, we work for a bank, so we've kind of zero trust on security. When we first started off the journey on I think court protection order and fraud, obviously there's a lot of covenants in the bank. We kind of undercooked under, you know, the estimates and the challenges that we'd had, that we would have obviously there's lots of governance committees to go to. And there was a lots of changes happening, you know, at the time, so we had to respond to that. We had to change some of the patterns that we were setting in security. So, you know, we did that and we got better at it. So the first couple of customers, it was a bit tricky, but we kind of got better and quicker and more slicker at that.

- So, I mean, is there kind of any lessons learned that you can maybe share with some of the other, I know all of our industries that we're working with, especially financial services. I mean, this is kind of, I know one of those challenges is always getting past, like the, how do you get through the IT governance and really the support from your own internal teams to really leverage the cloud. I mean is there anything else that?

- Yeah, so I think one of the things you, you know, the establishing the routes alive in the DevOps pipeline. So we've done that year to date. I think we've done 350 changes this year. Which is around 15 a week. So that's really mature. So that's allowing us to modernize the estate, modernize the bigger applications we're able to deploy safely. And then we're getting the, you know, through the DevOps pipelines, we're getting the changes in at the weekend. We're putting changes in over multiple virtual private clouds and multiple business areas. And then if there are any kind of smaller issues, we can get those fixed in the week. So get that established. Don't underestimate the security and the compliance aspects particularly, you know, in finance, you know, you need to really work and collaborate with those security teams and the CISO teams. You know, we had great collaboration across many different areas in Lloyd's who supported us. And, you know, working with Frank and team as well, they've kind of worked with Lloyd's and changed their operating model to accommodate us. Good example where we first started off on the journey in fraud and court protection order. We were using VPN as a connect, and then we've changed that to private link now. So that was kind of introduced by our bank and Frank and the team kind of, you know, changed their operating model to suit us. So we're constantly reviewing through our, kind of our covenants and Lloyd's change control frameworks. We continually review that, you know, where the Pega estate sits, we look at the security, any vulnerabilities and where it sits on the AWS SaaS, we've putting like six, seven changes a week in to just to keep keep their customers and the bank secure.

- Oh, that's great, I guess Frank, I mean I'll ask you, I know you have a, you obviously are leading both the cloud engineering and operations, but also the support organization. So in your view of how you really partner with our clients. I mean, so taking that, I mean, how is the, I guess, how are you thinking about partnering with our clients as they move in into our cloud and leverage our teams as an extension of the org?

- No, I think, you know, from the journey that Steve and I have been on together pretty much since the beginning is really that I think, you know, we are engaged. We've become part of the organization. We understand every aspect, whether it's security, compliance, how we operate, availability, definitely everything we've done around making sure we stay updates and creating zero downtime to be able to make sure that we do not impact the business that Steve's running is really critical. So really listening, I mean, we do take our, you know, clients we work with around the world, definitely work with Lloyd's, as Steve mentioned, the one, you know, one opportunity we had to get the private link, but constancy engaged with making sure we understand the changing dynamics within a regulated market and industry that definitely related security and compliance. So we take those in, we put them into our roadmaps, we continue to deploy them. We are somebody that does change for our clients 'cause we know we need to be able to continue to service them. And that's a big model that we believe in, to be able to do that. And then of course, the changes we have to be aware of, from a cloud company, from a service company to make sure that we're evolving our technology. Like our move from Cloud 2.0, the 3.0, which I know Steve is really excited about that move as we look at the getting that on the roadmap in the near future. We did that to again, provide that availability, scalability, reliability with our Kubernetes architecture and Cloud 3.0. And definitely the support organization, the support organization has transformed itself to really what I consider a client facing organization where they really own the client. We've had a lot of people that have been connected to Lloyd's and other clients where they're directly engaged from a support model. We know we run technology, technology fails, we need to make sure we've got the ability to understand the clients, the kind of challenges they're going through. And our goal absolutely is to get people stable. And if we have issues then we go to definitely remediate and make sure we're resolving them. So it's a partnership. It's definitely, like I said, my term I use, I'm an extension of our client's organization from an IT perspective. That's how I think about it because that's the way it allows us to really truly be connected and be part of the organization.

- Oh, absolutely, I mean so both of you have kind of hit on, I think we're obviously going through our own in the Pega cloud we've gone through a big massive transformation of our own architecture, right? Going from our cloud version three that we've just released. And actually for the last year we've been rolling out all of our new clients onto this latest version. But I think evergreen is always a big concept with us, and it's just keeping all of, I mean, even Lloyd's, I think one of the biggest benefits I've seen you is that you're able to keep these services up to date, right? And can you speak to how that experience, how seamless that has been or?

- It's been really good. So we've got the infrastructure updates that we received from Pega as a software, as a service. So last year in 22 I think we have 49 infrastructure updates. So they were seamless, they happened in the background that we didn't know. Previously, of we were on-prem, you know, they would've been involved our colleagues in GCIO, they would take up budget and, you know, reduce the ability for us, you know, to change as well. The actual platform updates. We did 21 last year, so the whole estate, all eight VPCs were either on a version of 8.7 or 8.8. So, you know, they've gone really well. We did have a couple of teething issues back in January, February. You know, we worked with Frank's team to kind of sort that out and make it more robust for the future for future upgrades. We've really invested in the automated testing as well. So, you know, the weekends that we do the upgrades, I think when we first started on the journey back on the virtual cloud one on fraud, it would take, you know, a couple of weeks testing before, it would take the business, you know, around 12 hours over the weekend. And we getting that down to two hours now. So that ability and the, you know, the cost avoidance and having the ability to use the latest functionality from Pega as well has been really good. And we've been able to leverage that across all the business units.

- No, that's incredible. Yeah, I mean, Frank, do you have anything to add?

- Yeah, no, I think we're, you know, I mean the model we've worked with Lloyd's is the model I want with every single client. I mean, it's been a great partnership on definitely working together, get through a journey where, you know, you know, honestly, years ago, of course, if somebody didn't update, it took potentially months. We know we had to get to zero downtime with everything we do. And definitely with the patches and updates to the infrastructure, definitely what we've done on the Pega platform with near zero downtime and just, you know, seeing, you know, Steve's environments get updated from, you know, 8.6 to 8.7 to 8.8 taking the patches just consistently gives me the confidence that they're secure. Number one and number two, they are taking the features that they're paying for, which allows them to definitely influence and it definitely benefit the business models they need to create with those new features. So, you know, staying current is you know, paramount to how I've, you know, come into Pega and making sure that we do everything we can to make it really easy for our clients to update. And that's been a really great journey we've worked on with Steve to be able to do that. He talks about definitely the value it brings for his from a lower TCO and cost of doing it. I mean my thing is I feel really confident that we've got a you know, a cloud that's really secure and definitely has the latest and greatest features for Pega.

- Excellent, I guess, and Steve, I mean where do you see us going from here? How do you see the relationship going and is there anything else you wanna add to?

- Yeah, I mean with the journey so far. We've moved roughly 25% of our on-prem applications to Pega Cloud. Currently, I think we've got 14 applications live across the VPCs. We've got 23 in flight, and that's gonna take us to around 45% of the whole estate into Pega Cloud by the end of this year. And the way we're using the frameworks, we're using customer service framework, which was the old retail account of estate. We had 18 applications there, we're bringing 10 of those into a customer service framework. And then we're collapsing a couple of applications. So we've got a smaller simpler estate that we'll be able to, you know, change more quickly. The teams, once we're on Pega Cloud as well, we're seeing, you know, 30% faster to market. We're seeing the team size, you know, reduce using the low code no code capability. So, we're leveraging that, so. And also the customers are happy because, you know, whilst we're transforming from Pega 6 and Pega 7 we're able to transform the applications, use the latest technology, get the operational efficiencies, get some of the FG savings. And as I say, once we complete that journey any future change using latest technologies that Pega release, the team size, smaller and more agile. So next year, because we've, you know, we are also using KYC as well, so we're getting a lot of, you know, new engagements. we've got because of the success of it as well. We've got new engagements in general insurance, Lex Auto lease, we had engagements in finance as well. And you know, this low code no code ability and the evergreen nature has driven demand up. So next year, you know, the kind of the reuse that we've put across the, you know, the single sign in, and all the reuse components that's gonna, really leverage that next year to move the 45% on cloud to up to 95 by July. So if we get a good flight to win. So it's really happening. You know, there's other products that we, you know, we're working with Pega to look at that we might bring in, but having the ability to scale up and put new applications on those existing virtual private clouds, having faith in the security and if we need to spin another one up, you know, we can do, we know how to do it. We've kind of got the T-shirt on that. So yeah I think it's exciting times ahead, you know, a lot of hard work in the next 12 months, but, you know, there's new opportunities and new demand coming in pretty much every, every day.

- I think that's one of the most exciting things to see, right? Is this journey of how you're, we're kind of taken away the hurdles that get, I think, thrown in front of us all the time when trying to run some of just the infrastructure or just the product itself. And we'd rather, you know, I think Lloyd's is definitely getting the best of like able to leverage those news capabilities. All the things we're seeing up on the center stage even right? Is just having those in your hands quickly is I think just really exciting to see advantage.

- That's exactly it. Yeah. So, you know, the things we saw yesterday and today, you know, we're now confident that if there's an appetite from the business that we you can spin these up. And as I say we work really well with the Pega business values team as well. So we are doing a lot of in-house applications that have got risks on them. So we're rewriting those in Pega and we're going to the business units and doing operational walkthroughs. So we'll go with the Pega team, we'll look at, you know, what they're doing, what sort of work they're doing, and we are modernizing their workplace. We're using things like, you know email ingestion, which is taking, you know, the kind of manual boring kind of work out the operation. So that's working well.

- That's great. Frank, do you have anything else you wanna add to?

- Yeah, no I think, I can't wait till we get to the 95, close to a 100%, it's gonna be amazing. 'cause I do remember my first Pega World when you guys were just debating and starting the journey. So it's amazing to see the transformation being completed from that perspective. And, you know, we continue to work with Lloyd's and of course all of our clients on listening to things they need in the future and continue to provide, you know, that real as a service that we've been really, you know, transforming our technology and our company to be. So, you know, and then we've got all this great gen AI stuff that we're gonna be working on together, I'm sure down the road, which will be fantastic. We'll get that all, you know, up and running and available to our clients. And, you know, it's been a great journey and, you know, we've learned a lot working together. I think that's one of the best things I mean me working with Steve and like we do with other clients, we're very much engaged. So, you know, for me it is around, you know, like I've said, let us manage all that Pega platform. Let's run it for you, make sure it's secure and compliant. And it really allows our clients to focus on the value to the business of the Pega platform that it gives them. And that's really what we want to continue to make sure we're doing is allowing that, you know, the business IT staff, the IT staff to focus on developing those applications that really drive the business transformation. So, you know, as I've said, Steve, you know, I'm an extension of your organization. I'm very proud to be working with you at Lloyd's to be able to make all this happen. So it's definitely been a great journey. I look forward to the future.

- Excellent. I know we wanted to leave sometime too. If anybody has any questions in the audience, you can ask your, I think there's actually a microphone too. I don't know if, yeah sorry.

- You can yell at us if you got a loud voice that's fine. We're used to that.

- Yeah, I can always repeat it.

- [Audience Member] So you talked about this is a partnership between Pega Cloud and Lloyd's Bank. Coming from the partner community, is there a swim lane or what opens up in terms of opportunities for partners to participate in some of the migration work, some of the upgrade work? In your example, Steve, if you could highlight some of the opportunities that you had for working with third parties to do some of the work.

- Yeah, so we're currently contracted with TCS. So we've got quite a big Pega presence, you know, within the bank there's about 400 there. So we use TCS and we use other partners as well when demand, you know, exhaust that supply. So we're also trying to grow our own capability. So there's a big push that we wanna grow LBT capability. So we're looking at, you know, apprentice schemes, graduate streams, working with other partners, bringing people into Lloyd's, training them up. We're getting really good support from Pega and the training, and some of that's free as well. So we're getting some good classroom exercises. It's getting easier 'cause the more people are joining, they've been able to buddy up the new starters. So there's nothing, you know, if you are isolated on your own and you're a Pega engineer, there's nothing better than being next to someone who can help, you know, coach you. And as I say, you know, TCS also help with that as well. So we've got good relationships with, you know, we work with EY as well as Producer and we, you know, and we pro so kind of work with all partners as and when appropriate.

- So I'll add to that too. I mean so we have obviously a large part of our client base on Pega is moving towards the Pega cloud right now. And there's obviously a very kind of, we've programtized it to a degree, right? Of how do we move clients over? And so from a overall perspective of like how that process looks like is normally it's about doing an application assessment, right? We go in and we actually look at a client's estate, how their applications are built, guardrail compliance, looking at all of those. And then a lot of times what we're doing with our partners, you know, extensively is that the partners are helping us engage in and making sure we're kind of modernizing, getting the most in building kind of within the guardrails of the application so that we can get to a better place where we can update and also move over to our cloud service. So there's definitely some usual some work in the application that we'll wanna update and remediate some things to move them to the cloud. Things like just not having direct database access or things that we just, you know, you might have done on an on-prem system and when we're in the cloud we won't have that access. So those are things we'll want to kind of just build into the Pega solution. And then, so those are things that we very much engage and have our partners helping support us and our clients. And then we actually do the migration work. And Frank's org actually helps support doing the actual migration of rules and data and moving them into the cloud. And then it's kind of all set up in that we have a very nice clean program for moving our clients over in that map. Usually it can be anywhere between three to four months. So really due from end to end, depending upon how, you know, significant the workload is and the amount of, routes to live as we call them, right? How many production solutions they have. So

- Yeah, I'd add, I mean, you know, of course I, you know, work with a lot of our clients that the partner ecosystem is so critical for us. To be on this journey, you know, in all the meetings I've been in the last two days with a lot of clients that have had conversation with me about moving to Pega cloud, there's a lot of work and there's a lot of modernization work. There's a lot of things they wanna do. Like Steve's done. One of the things I do like about what Steve's done in the Lloyd's model is I think you heard him say, you know, moving some applications that made sense 'cause they needed to, and then, you know, basically, you know, limiting some application, 'cause they built some of the features into some of the applications they had, building new applications. You know, for me, I want to allow somebody like Lloyd's and his team, but more importantly our partners to really work in the ecosystem. With our clients to really build fantastic quick applications to bring that value. And, you know, being aware of the latest version of our software, like right now running 8.8 going into Finney and so on, it's just a tremendous value and our partners really allow our clients to be super successful. And it's something that, you know, I get engaged with a lot of our partners, a lot of clients in joint conversations and make sure we have a real good success model across all of our clients. So it's really a fantastic ecosystem. You know, it's gonna be more work to come for our partners definitely is we go through this journey of moving a lot more clients to Pega Cloud.

- I think what we did as well, we crew the communities, you know, the COE within TCS community with the LBT and the gills as well. So getting those communities established, working together, collaborating, bringing the Pega expertise that, you know, that's been invaluable, but you know, those best practices can then go across the different business units as well. So that's really imperative that's done.

- We have a couple of questions it looks like.

- Yeah.

- Thanks for coming in, it's always great to get the voice of the customer. I know when you go through technology decisions, it's really three phases that people think of, people, process and technology. We know that Pega's always had great technology. I'm interested in when you were making that decision to go to the cloud because Pega has a ton of loyal customers that are on premise today that are at this juncture where they're trying to figure out do we go the Pega cloud route or do we stay where we are? I'd be interested in how you were making that decision and what you're seeing as an effect on the people process part of it. I know you talked about infrastructure updates being easier. I'm curious what benefits you're seeing and why? Well first why did you make that decision? And then some of the benefits you're seeing around those areas.

- So luckily we've got a multi-cloud strategy. So the AWS SaaS offering was within, you know, what the technology strategy was, what it's been enabled us to, obviously other areas of the group can develop on their clouds and we can containerize ours. So we've been able to do that really quickly, you know, once we've got the first one or two applications. So we've been able to move up pace, you know, we're kind of more in control of our own virtual private clouds. We're more in control of the upgrades, we're taking those reliance on other teams out, you know, the infrastructure upgrades that come as part of the service, you know, are invaluable. Some of those would hold us up, you know, stop us not enabling us to change and do change for the customers. So, you know, that's why we chose it. I think the other big one as well was the cost avoidance and the evergreen nature. So, you know, lots of banks obviously, you know, have a, you know, a lot of big and old systems and lots and lots of applications. So a lot of money's going spent on risk remediation, on currency risks. So we're able to modernize that, keep current, keep on the latest version. So not only do we not have to spend a lot of money on upgrades, we're using the latest technologies as well. So as things are changing constantly, as we've heard over the last two days, we're on those latest versions and it's in our control. So we work with Pega and the teams in the business areas and collaborate together to get, you know, a roadmap out of when we'll do those upgrades. So it's very in a control manner. It's good and it's giving opportunities then and it's allowing growth as well. So it's generated a lot of new demand as well.

- [Audience Member 1] Thank you.

- [Audience Member 2] Hi there Steve. Congratulations on your success. It sounds like second Pega World that I've seen some phenomenal results coming outta Lloyd, so well done. Just to elaborate a little bit further on that question, a lot of the clients are trying to figure out their own cloud, maybe in-house cloud. Should I go in-house, build it myself, especially in the banking world. 'cause you know, they're so concerned about security and everything else that's going on. And as we see from the AI discussions taking place here, these are gonna start speeding up even faster. So you're, you know, congratulations, you're way ahead of the curve here. For those that are thinking about this and building in-house, putting Pega on your own cloud. Versus Pega as a service, what have been the big surprises for you when you compare Pega as a service to what it would potentially look like if you were to do it yourself? I know you said that you'd have a whole bunch of infrastructure changes that you'd have to schedule, you'd have to get budgets, you know, would you be able to give us a sort of indication of what kind of savings that might look like from a client perspective? And what kind of surprises have like good surprises you've got from things like global operations center and being, you know, the Pega Cloud being managed by its own case management system. Have you seen benefits of that in your world at this point?

- Oh, well, so I don't, you know, people go into their own clouds, you know, obviously every bank will have their own strategy. So we chose the SaaS service 'cause it, you know, it's built by Pega. So we just felt to go to that, we'd have more control. And as I say, it was more to do with the cost avoidance and the evergreen strategy and obviously priorities as well. So there's a big rush for everyone to move their applications onto different cloud providers. By going with a SaaS service it allowed us to have more control on that. So we were able to go there quicker and, you know, take the reliance out of the other teams that were doing other work that was prioritized by the business. So, you know, that, as I say, it' having that control, having the ability for us to move at pace, to move on all five different areas as well. So we're able to modernize, use the frameworks, you know, kind of collapse the estate to make it simpler. Things like where we're using customer service framework, an application like change of address we do it in five different places. We just do that in the one place now that's gonna go live in July. That'll be done, you know, like in one place as it should be. And as I say, things like customer sanctions unit on a CLM that was done in four places in the bank and now, you know, that's just done under one place. So it's opened up a lot of doors, a lot of opportunities. And as I say, some of the on-prem applications that I owned as well, we've been able to rewrite quickly and put in the virtual private clouds that we own, get that route to live 'cause we've established it, we've established those DevOps pipelines, those routes to live, route. And you know, we're more in control. So it's taking out those dependencies, those external dependencies giving us that control and ability to deliver at pace.

- Yeah, and I'll just add to that, Steve, I think one of the things that, you know, we've talked about, you know, over time, and I talk to a lot of clients about this, so the question is a really good question. Deploying any software we all know is easy. I mean, everybody could deploy software, as I always tell clients that I talked to that are making this decision. It's around how you operate it. We do use Pega platform and case management. That's really how the global operation set of the GOC. That basically does all our automation orchestration for everything we do to manage Pega Cloud. To build out, it took us four years. We're really good at building on top of the Pega basic technology. It's something that when I talk to clients about, if you could do this on your own, the thing I'll tell you is start with automation first. Start figuring that out. Make sure you got the right tool to build your orchestration. Then make sure you figure out how to go to zero downtime. You have to build that into your capabilities. Steve, I think you would agree if you had to go off and try and do that in the beginning on your own, it'd probably taken you a while. If it took me four years, I'm not sure exactly how long would've taken you.

- I wouldn't like to guess. I'm happy where we are, shall we say.

- Yeah so I just think, you know, and any client that's met me. I tell them, look if you want to go on your own, I'm more than glad sit in a session and go through what it takes to operate Pega to give you the knowledge. I did say I own support. So I always say this, you know, I don't want cases raised because you've built inside of a cloud that may be struggling to be able to keep up with the pace that we do. So I'm always interested in making sure we help. So that's something that comes when people say, well is it, you know, cost neutral? Is it cheaper for, you know, running on paid cloud? I could tell you how many resources you'd have to have to build a GOC. It costs you a lot of money to build all that. Now you're probably build it for some other things you're doing for a bank or for your company. But the reality is there's a lot more that goes into that to be able to make sure that you really are building a full automated stack to be able to do the amount of updates we do on a monthly basis, managing 30,000 environments. I mean the volumes we deal with is what we need to leverage all of our capabilities, all tools, and we use the Pega platform to do that. For a client to have to build that same type of capability, it'd be quite expensive.

- I'll say, what also was interesting is Steve, as you were mentioning control, right? It actually gives you more control being on the cloud. I think a lot of times our clients feel like they lose their control when they come to the cloud. But what I think it helps to do is you actually can build in a tighter governance and control around the actual application. Your rate of innovation of using those apps, I think is greatly improved. But then what I've noticed from Lloyd's is you guys actually built more into the actual business side of like being able to leverage more of Pega and you've started leveraging more of like the out of the box capabilities as opposed to when you're managing and deploying Pega yourself. Sometimes you create a model where you're doing everything under the covers or doing stuff at database levels and trying to build business logic in other areas where when it's on the cloud, it actually allows you to enforce that control. And then I think it overall allows you to innovate faster, right? 'Cause then you're able to update and keep current and then also be able to leverage new capabilities. And, but I think that's kind of an interesting concept of like, it actually adds to helping support control, yeah.

- And having those communities as well, you know, like the gills and the COEs talking to each other and sharing experiences. So if, you know, insurance will do something and then the commercial guys will think, well we want some of that and we want to do it. And then just on the security element, so the way we've devised the Pega Estate we put it on an AWS hub. So if there is any security changes or vulnerabilities, we can change once and it changes all the VPCs. So as I say, we continually look at that, you know, as we should. And if there, you know, we can change and we can change quickly and we can change in our own time, as I say and having the features in DevOps pipelines is as I say, we've done 350 changes this year to date, so.

- That's incredible. Yeah.

- And that's excluding the AWS ones.

- Yeah. Sorry, I know we have another question.

- [Audience Member] Sure, Steve, so earlier you mentioned that there were some changes in the way you guys looked at your governance or for technology, security. What do you think were two of the more instrumental things to help contribute to those changes? Your point of view?

- Sorry the changes to the covenants or the?

- [Audience Member] Yeah, so you said that there was changes that had to be made, you said collaboration was helpful. So what brought around that type of change? What were the two top things in your opinion that brought around those changes?

- But I think it was, you know, cloud was new to banks, so there was new requirements coming out. There was changing requirements. So we just had to assess those and build them in. I think what I was trying to allude to, probably badly, but I was trying to allude to, we probably underestimated that kind of governance and taking people through the steps of what we're trying to achieve. So we kind of we're thinking in the old methods of how you deliver and what length of time that that would take. And because it's new and it's on cloud, it's, you know, we've probably needed to double that estimate. So it was kind of a bit disappointed for our first clients, but once we got better at that and you know, people kind of understood what we were doing and they understood that the controls and security we put in place that becomes slicker and better and we, you know, we learned from that.

- [Audience Member] So you would say your experience and time were the two biggest contributors to making it better?

- Experience and time and collaboration. You know, with working with our colleagues in Lloyd's as well, the security teams there, we work side by side, you know, it's really imperative that you strike up a relationship there, work together, you know you're gonna hit problems, it's gonna get hard, but you just, you need to put the hard yards in and work together. Putting the shift really to, you know, to get that done. But it does get easier, you know, once you've gone through there, you've got your first application live, you know, it becomes second nature. You get those collaborations and working relationships so things become easier.

- [Audience Member] Okay. Thank you.

- Excellent.

- Yeah, yeah.

- Keep it quick. You mentioned a lower overall TCO and you dropped certainly a lot of clues along the way, but if you had to zero in on the top one or even two levers for that, would you be able to share?

- Sure. Total cost of ownership. You mean TCO?

- Yes sir.

- Look I think, as I say, there's quite a few actually, but you know, as I say, a lot of our applications were written in Pega 6, Pega 7. We've had to heavily invest in people and you know, business people to transform those applications. But the big point, I think the big, is a 30% reduction once you get to cloud, using that low code no code, new applications that we've put on there. We had a legal requirement in UK to help our customers out during COVID. So we put a breathing space application live, we put it in a virtual private cloud where fraud was, and we were able to leverage the integrations that were already built there. So we did the whole application in 59 days and then we started testing that. So usually, you know, getting the reuse of the integrations, the low code, no code, as I say, the team sizes and time to market is roughly around 30% better. And then, you know, the big one, I can't give the figures, but you know, the big one is the cost avoidance of the upgrades. You know, so we're doing those in days we're keeping current. So we're, you know, we're not asking for money to do big, large, long upgrades that take between 6, 12, 15 months. You know, we're able to spend that money on change. So, you know, they're the two big ones. They're moving that pace once you get there and the kind of cost avoidance as well.

- [Audience Member] Thank you so much.

- Yeah, I would add, you know, one of the things, we made a decision a couple years ago to try and make sure we kept clients current is one of the, not only get into a zero downtime, but the process we went through, well we sat in a room, we were going on a whiteboard about how do we make sure, you know, clients that we even working on the cloud, we have to give him something. And so we decided to come up with the model where we give a free clone per 30 days. So this way we basically give him the latest version of software with Steve. He knows when he wants to do it, it's on his schedule, the environment's available. I give it to him, the day he tells me he wants it, he's got it, it's available, he's free. Something we decide to do for our clients because we knew in the model, when they're on-prem, they have to go figure out how to get the hardware. Can they get in the timeframe they want to schedule it? You know, can they really control what they're trying to do for their business? That's the model where I believe we've really benefited our clients that use that model by making that clone available when they want it, putting a load of latest technology on it. I think some of the great stuff that Steve's done with some of the testing they've done to be able to test things quickly, you can take an update. We have clients that take updates they get the done in five days. Our target is always 14. We average somewhere around 30. If you compare that timeline, just that alone and how fast you can get current and then take the features, right? So that's tolerance upgrade, then take the features where you can value to the business, that used to take nine months, 12 months, tons of resources, on-prem, right? Because they had contact switching. I can't get you the environment, I don't have the time to do the update right now. We'll have to wait till the update. We have to build the test cases for it. I mean I think Steve, would you agree? I think that's a big part of where, you know, if you wanna talk about how we really help from a TCO perspective, that to me is one of the biggest ones.

- [Urgif] Hi, this is Urgif from Sun Life Canada. We are as a company also in the same crossroads you guys were probably a year back. I was talking to my lead at Sun Life and he mentioned speaking to Lloyd's Bank specifically about this. So as a company we spend a lot of time sizing and scaling our on-prem applications and we do have our AWS private cloud installations within Sun Life. We are kind of in the crossroads of deciding whether we should go there, we should go to Pega Cloud. Could you tell us something a little bit more about, I know Pega Cloud does auto-scaling, but does that mean the performance test, the stress testing requirements go out? Or do you still do that and still make sure that the auto-scaling is actually keeping up with what you need as throughput or capacity or, you know, what do you need from the system?

- Yeah, so all those kind of things we still do within Pega Cloud. I think some of the stress testing and some of those, I think Pega 3.0, which we'll move to, that will answer a lot of that. But yes, you know, the historic testing that we used to do, you know, we still do, but that's getting quicker. We're in more control because we own the virtual private clouds yeah, So all that testings within our teams, you know, and that kind of non-functional testing we can control and do and get better and automate as well.

- Yeah, I'd add, I think with cloud 3.0 which is really the, you know, the architecture which is built on Kubernetes, which gives us the audit scaling capability. You know, we don't build the apps that you're building, so you do have to do your performance testing in a sense, if you built an app and making sure it's operating under the performance model you expect as you build it. We worry about, of course, making sure that we scale as you add users, as you add the typical things. And even on in building the application. So we do with, especially with Cloud 3.0, I'd like to think there's gonna be still a requirement to always do performance testing and testing. I just think it's gonna be a lot easier and a lot less. And the one thing you don't have to worry about, 'cause I think this is a big thing that I know, you know, clients worry about when they're doing this on their own is, you know, what I call what's your capacity playing model, which can be your forecast for peak loads, when the peak loads occur. And how do you really build performance around that? You still have to do some of that work, but because of Cloud 3.0, we're allowing us to scale even above the limits to give you some headroom just in case you have not planned that appropriate testing. That's a comfort we give because we build that capabilities into our technology. So I like to think that we're giving you something as a service that really allows you to handle your peak loads as you go forward. But I will tell you, I always say to clients like Steve and everybody else, yes, you have the need to set up your own testing framework for performance and features. That's something you'll still need to do, whether you're running it on our cloud or our cloud

- And we have services also available for doing full load production scale testing as well. So for clients that need that, we have that ability. But yeah,

- I think that's it.

- And I think that's it. I think we're outta time. So thank you everyone. Thank you Steve, Frank, for joining us.

- You're welcome.

- Thank you.


Tags

Product Area: Cloud Solution Area: Operational Excellence Topic: Cloud Topic: PegaWorld Topic: Platform-as-a-Service

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