KPMG Norway gains regulatory resiliency and operational flexibility with cloud strategy

Objective: Take advantage of cloud technology

KPMG Norway is part of the global KPMG network of professional services firms that provides audit, tax, and advisory services to business, governments, public-sector agencies, and nonprofits. KPMG operates in 154 countries and territories and has 200,000 people working in member firms, each of which is a legally distinct and separate entity. KPMG in Norway is comprised of 1,100 people working from the headquarters in Oslo and from offices in 24 cities all over the country.

With its clients’ businesses transforming to keep pace with a rapidly changing world, KPMG is transforming, too. To stay ahead of evolving client needs, and stay ahead of its competition, KPMG has embraced cloud computing because of the scalability, flexibility, and software innovation that it delivers.

KPMG’s global cloud-first strategy is based around an infrastructure the company calls Cloud Central—it combines the cloud hosting services of Microsoft Azure with KPMG’s enhanced security controls, best practices, and dedicated in-house technology professionals who support KPMG customers on their cloud journeys.

KPMG Norway has been at the front of cloud transformation within the global KPMG network. “Talent is costly in our part of the world, which makes it essential to use technology to automate some tasks,” says Dag Jørgensen, Chief Information Officer at KPMG Norway.

KPMG Norway embraced both public cloud computing—primarily using Microsoft Azure—and software as a service (SaaS) applications to reduce on-premises application support needs and speed the delivery of new services to employees and clients. KPMG Norway sees cloud computing as a great enabler in devising innovative client solutions and doing so faster.

However, after licensing SaaS applications from many vendors, KPMG Norway found it difficult and costly to manage the data security, privacy compliance, licensing, and contract management aspects of a complex multivendor cloud environment. “We realized that we needed a much simpler cloud strategy,” Jørgensen says.

Also, there were many applications that the company couldn’t put in public clouds because of European data sovereignty laws. “Our business model is changing,” Jørgensen says. “Clients are increasingly asking KPMG for digital transformation solutions, in addition to traditional tax, audit, and consulting services. When we build these solutions for clients, we assume ownership of their sensitive data and according to contract or regulations, must keep it on-premises or in the country of origin.”

Even with these constraints and challenges, KPMG Norway realized that the benefits of cloud computing were irresistible and in 2017 formulated a vision to find a way to deliver all IT services in a cloud environment by the year 2020.

A consistent cloud platform to extend Azure capabilities on-premises

The question was, how precisely to do that.

Jørgensen’s first idea was to simply refresh the company’s existing on-premises infrastructure, a converged infrastructure solution from Dell EMC. This system included servers; storage devices; networking equipment; and software for infrastructure management, automation, and orchestration, integrated in a “black box” that Dell EMC managed.

Jørgensen’s team liked the black-box deployment model and overall capabilities of the converged system, but it wasn’t keen on making another large five-year investment in a classical infrastructure that would remain static over the investment’s lifetime while its public cloud and SaaS footprint was continuously evolving. “We would lose the ROI of our converged infrastructure investment, and as regulations changed, it would be difficult to move those applications to the cloud,” Jørgensen says.

About this time, Microsoft introduced Azure Stack, an integrated system of Azure Stack software and validated hardware that lets organizations build, deploy, and operate hybrid cloud applications consistently across Azure and their own datacenters.

“Azure Stack came up as an intriguing solution,” Jørgensen says. “It gives us the same infrastructure components that are in Azure datacenters in local partner datacenters. There’s complete architectural consistency—the same portal, API, application model, and tooling. Other cloud providers had hybrid cloud offerings, too, but they were built from components from different vendors, and managing that diversity would be challenging. Azure Stack delivered the same black-box model that we already used, and we liked that.”

KPMG Norway elected to purchase Azure Stack from Candidator, a Norwegian IT company and member of the Microsoft Partner Network. Candidator runs the Azure Stack solution for KPMG in its own datacenter (in Norway) and provides complete managed services that include backup and disaster recovery. The Azure Stack solution from Candidator uses Dell EMC VxRack Hyper-Converged Infrastructure.

“Because we’re an IT solutions provider, Azure Stack offered us an opportunity to lead in the cloud service provider marketplace,” says Ketil Neteland, Advisor at Candidator. “Clients such as KPMG Norway want to focus on their core business, not on managing datacenters, and with Azure Stack we can offer them an on-premises infrastructure solution that is consistent with what they use in the Azure cloud. It’s a brilliant complement to the public cloud.

“To deliver a true cloud platform as a managed service, Candidator trusts Dell EMC as its preferred infrastructure partner that fully supports our managed service offerings,” Neteland continues. “With Azure Stack, Dell EMC and Candidator can offer a true cloud platform to our joint customers. It’s a real differentiator.”

The strategy: Azure, Azure, and more Azure

With Azure Stack, KPMG Norway can fulfill its all-cloud vision. “Our current strategy is Azure, Azure, Azure,” Jørgensen says.

Jørgensen’s “Azure, Azure, Azure” mantra refers to the fact that KPMG now has three Azure footprints from which business and technology teams can choose:

• KPMG Global instance of Azure, where companywide global services such as Microsoft Office 365 and other SaaS applications run.
• KPMG Norway instance of Azure, where KPMG Norway runs the majority of its own and client applications.
• KPMG Norway instance of Azure Stack, where KPMG Norway runs applications that must stay on-premises.

Jørgensen’s staff is sorting through the approximately 300 applications and services that currently run on-premises to see which it will move to Azure Stack and which to the Azure public cloud. Eventually, all data-sensitive workloads, including data analytics, audit applications, tax applications, and others, will run in Azure or Azure Stack.

Within Azure Stack, KPMG Norway is initially using Azure infrastructure services—Azure Virtual Machines, Azure Storage, and Azure Virtual Network. Ultimately, it wants to take advantage of Azure platform as a service (PaaS) offerings, such as Azure Functions and the Web Apps feature of Azure App Service.

Rapid time-to-market with new ideas

A cloud strategy gives KPMG Norway much faster time-to-market with application delivery and overall innovation. “As an example, the Data and Analytics team within the Audit team wanted to utilize machine learning, and instead of having to depend on internal capabilities, we have instant access to the latest software innovations that the business needs in Azure,” says Jørgensen.  

Now, Jørgensen’s team can greatly expand its service catalog so that when requests come in, it can immediately fulfill them. “With Azure, we are able to speed up time from idea to realization,” Jørgensen says. “We don’t have to scale up requested capabilities in-house—install software, test it, perform security assessments, and all that. We just grab and go.”

Greater regulatory and development flexibility

With Azure Stack, KPMG Norway has a repeatable, straightforward way to meet both client and regulatory requirements for data sovereignty, within a consistent and flexible cloud landscape. And, as government regulations and client requirements change to permit storing data in public clouds, KPMG Norway can move them unchanged from Azure Stack to Azure datacenters.

“I personally think that there will always be a need for on-premises infrastructure, but the whole geopolitical environment and customer requirements change all the time,” says Jørgensen. “With Azure Stack and Azure, we have the flexibility to adapt to change, no matter where change comes from.”

Similarly, having Azure Stack as its on-premises infrastructure simplifies development and deployment work for KPMG Norway. The on-premises and public-cloud environments are identical between Azure Stack and Azure, so the company’s software engineers can develop code one time and run it anywhere.

 “Because regulations prohibit us from putting sensitive data in the public cloud, our developers have limited options when they are developing and testing applications; they can’t test the full application in Azure,” Jørgensen says. “But with Azure Stack, they have much more freedom to do quality assurance testing because the systems are on-premises.”

These days, in addition to loading up his Azure Stack system with applications, Jørgensen is sharing his hybrid cloud success story with peers in KPMG member firms in other countries. “There’s a lot of interest in this cloud solution, because all of our offices face the same challenges,” Jørgensen says.

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