In this blog, Ameekar delineates the importance of multi-cloud strategy that will be instrumental in developing and maintaining a competitive advantage in a digital economy where agility is key
The concept of a multi-cloud environment is hardly new. It has existed, in theory, ever since the democratisation of the cloud computing market since the late 2000s. But even with the global cloud computing market expected to exceed USD 800 billion by 2025, multi-cloud environments have remained an underutilised aspect of cloud computing for a significant portion of businesses. But this is changing.
In the wake of a global pandemic, businesses are quickly realising the importance of agility, on-demand scalability, and cloud-native core applications. This has been complemented by the contemporary evolution of cloud services. Cloud computing infrastructure has progressed substantially since 2018, widening its focus beyond traditional services like computing and storage, to include everything from network and edge services, to private cloud.
These trends and advancements have, in turn, influenced the general direction of the cloud transformation journey. The availability and necessity of small, independent moving parts in a rapidly growing ecosystem has made a single cloud infrastructure approach unrealistic. And organisations, larger establishments in particular, are quickly realising the advantages of a multi-cloud environment.
The IDG Cloud Computing Study, 2020 found that 55% of organisations use more than two cloud computing service providers. Such trends show that the use of multi-cloud is no longer a question of “if”; it is a question of “how many”.
Multi-Cloud Services Environment: More to Gain From
Among the many benefits of adopting a multi-cloud strategy, flexibility is the most cited among CTOs. In the majority of cases, enterprises adopt cloud services to a limited degree and within a specific business vertical. This isn’t ideal as it limits the overall capabilities and creates functional disparities within the organization. This results in lower visibility, declining performance, vulnerability to threat actors, and compliance issues.
Multi-cloud services configurations offer a number of benefits such as protecting enterprises from the risks associated with vendor lock-in, like downtimes and pricing changes, improving an enterprise’s flexibility to drive tangible cost savings, identifying opportunities to optimise performance, and complying with data governance regulations. These advantages make it an imperative in today’s increasingly digital economy for enterprises seeking to achieve greater agility and flexibility.
Furthermore, this opens up further advancements that can help business excel. Consider - what if enterprises had the power to not only gain visibility on the business but discern key insights as to the “why” behind it all? Organizations need the ability to analyse, access and connect business-critical data, transactional numbers and intangible experience-based data in to actionable insights to maximize business value. This is where SAP’s Business Technology Platform (BTP) can play a critical role.
The SAP BTP is a connected and integrated data landscape that leverages multi-cloud environment to offer all the above benefits and translate data into meaningful, actionable, and tangible business value. Think unified data management, analytics, artificial intelligence (AI), Internet of Things (IoT), Blockchain, and application development technologies. SAP BTP essentially infuses an organization’s business landscape with the highest levels of innovation, integration, and intelligence, enabling them to acquire a competitive edge in today’s experience economy.
Case Study: A Global Consumer Electronics Retailer Goes the Multi-Cloud Route
For most enterprises, a multi-cloud system usually means that they have hosted approximately 80% of their workload on their primary provider, while smaller, more niche fractions of the workload are supported by a mix of other providers. This is a practical approach, since most organisations begin their cloud transformation journey by investing in one primary provider and diversifying in the intermediate stages.
This was the case with a global retailer of assorted consumer electronics. A few years ago, when the world was swept over by the digital transformation wave, the company made the decision to develop its portal on SAP Cloud Platform. This was an astute choice. Unfortunately, however, due to budget constraints, their cloud transformation suffered from stagnancy. So, when the COVID-19 pandemic hit and sent online purchase numbers soaring, the company realised that their underprepared cloud infrastructure prevented them from making the most of the situation. In fact, their revenue experienced a downward trajectory and their customer-base continued to shrink, quarter-on-quarter.
The company conducted a deep analysis to identify the most immediate action points required to overcome the challenge. The analysis revealed that the primary requirement for the retailer was to gain end-to-end visibility of their process. In their current heterogeneous environment, they only had access to pockets of disparate information. Moreover, they needed to improve the purchase experience and establish a more efficient framework to report sales forecasts for inventory management. The analysis also revealed something far more alarming: 7% of their revenue was being siphoned off by online frauds.
The observations from the analysis and the fact that 80% of their business processes were being executed on the SAP cloud platform, meant that the company needed to create a multi-cloud environment that could work seamlessly with the existing framework. This transformation had to be done with minimal development (low coding or no coding) and the resultant environment had to be scaled or downsized on demand.
Since the core processes ran on SAP cloud platform, SAP Business Technology Platform (SAP BTP) was considered ideal to play the role of the centrepiece that would seamlessly link all the other functionalities together. This also allowed the company to leverage the SAP BTP’s Process Visibility service to achieve an end-to-end view of the entire value chain. The service provided ready-to-use templates across core processes and smoothly integrated with SAP and non-SAP systems running on-cloud or even on-premises. This helped the company easily identify and fix bottlenecks to improve on their time-to-market.
When it came to improving customer experience, the company introduced a personalised product recommendation engine using Microsoft’s Personalizer service. This immediately resulted in higher conversions to sales and an improved top line. To reduce their bottom line, the company leveraged the services of Amazon Forecast to enhance the inventory control.
The last significant action was to prevent online frauds. This was achieved by leveraging the Amazon Fraud Detector solution. Generally, integrating multiple systems can be a complicated and tedious task. However, thanks to SAP infrastructure advancements within the Business Technology Platform, these services can be effortlessly and seamlessly integrated using SAP’s Open Service Broker and SAP Open Connectors options.
Understanding the Way Forward
A multi-cloud strategy will prove instrumental in developing and maintaining a competitive advantage in a digital economy where agility is key. By cherry-picking and adopting the best-of-breed solutions, enterprises can achieve tangible results like quick time-to-market, low CAPEX, and completely secured core processes. However, while architecting such multi-cloud systems, enterprises must carefully choose their data centres for SAP BTP as well as Hyperscalers, as having them in the same region can help reduce latency.
Adopting innovation is easier than ever, for organisations that take a process-centric view. They no longer need to restrict themselves to a one-track approach towards progress. Multi-cloud can help bring about this much needed change in perspective.