The drivers for cloud adoption have shifted over time. At the outset of the cloud era, cloud was used by the enterprise to reduce operating costs - by moving ‘data centers to the sky’. The cost reduction use case was pervasive across IT and business.
According to Siki Giunta, EVP & Head of HCL’s CloudSMART Offerings Strategy and Industry Cloud Consulting at HCL Technologies, “over time the cost reduction business case for cloud doesn’t hold up if you don’t use cloud for innovation.”
Increasingly, organizations are looking at cloud as an innovation platform enabling continuous modernization. The argument for cost reduction is offset by revenue increase resulting from innovation made possible by cloud.
Keeping up with the pace of business requirements
Cloud enables businesses to respond to customers and industry trends in real-time and provides the platform to quickly support new ways of working, while serving customers.
IT organizations adopt the cloud to keep pace with the evolving demands of the business. In addition, IT leverages cloud to keep pace with the competitive challenges of the business and unique requirements of industry.
“The omnipresence of cloud technology is driven by the speed that businesses need to achieve its goals,” said Giunta.
At an industry level, speed is critical when creating and delivering new services or products. Online banking, virtual retail, manufacturing aided by machine learning in the cloud are reinventing how work is done.
Are all businesses ready to compete and thrive? Can they keep pace with industry changes and innovate at scale?
Innovating in the cloud
The cloud’s enormous computing power and flexibility allows organizations to adopt and integrate new technologies at speed, while reducing costs.
Cloud is essential to producing new, digital products and services, such as mobile banking apps offering differentiating new features, like the breakdowns of personal income versus expenses, aimed at digital savvy users.
Shifting computing infrastructure to a cloud provider allows organizations to scale their offerings rapidly, reduce dependence on carbon emitting data centers and frees up resources to focus on developing innovative products and services.
Cloud also enables the analysis of data created by the internet of things (IoT) which is prevalent in industries like manufacturing. This allows organizations to discover new, previously unseen insights that can determine new revenue streams, as an example.
Another way of innovating in the cloud is through collaboration. The cloud provides users with the ability to work quickly, in an agile manner, across multiple geographies with partners and external developers. This is called API-fication, where organizations deploy teams of external developers to continually improve existing products and services, while developing new ones.
The list could go on.
But, innovating in the cloud is easier said than done for traditional organizations. There are hurdles that need to be overcome.
Are all businesses ready to compete and thrive? Can they keep pace with industry changes and innovate at scale?
Operating model mismatch for the traditional enterprise
According to Giunta, the biggest challenge hindering the enterprise to effectively utilize cloud is the “mismatch between operating models – the requirement for the business to deliver new capabilities and functionality in an agile and continuous way – and the preparedness of traditional IT to deliver a cloud operating model.”
Organizations not born in the cloud have several hurdles they need to overcome to deliver a cloud operating model:
- Cloud delivery and operations skills are scarce in the enterprise
- Large IT organizations are required to manage both their legacy technology model and must also operate in the cloud space. These are two vastly different propositions. “One requires a waterfall [linear project management] approach and the other, an agile way of working that uses continuous modernization,” added Giunta.
- Risk and compliance policies used in traditional enterprise do not always translate to the cloud. New policies and a risk management framework to understand the operational risks of outsourcing are needed to operate safely in this virtual environment.
These factors highlight the cloud conundrum. The cloud offers enterprises the ability to speed up innovation, meet evolving business goals, and end user needs. But, optimizing cloud can be restricted by the inability to effectively manage or operate a cloud model.
“The biggest slowdown in cloud adoption today is the inability of traditional IT organizations to adopt a cloud operating model,” confirmed Giunta.
A clear strategy and refocused resources
Adopting a cloud operating model requires a clear strategy and strong guardrails to facilitate the interaction between traditional IT and the cloud operating team.
IT leaders should focus on people, process, policy, and platforms. Giunta explains that organizations need to choose the right providers, then jointly create a capable Cloud Center of Excellence (CCOE). The CCOE will provide operating models with structured processes along with a redesign of the compliance frameworks. To be successful, this must be a team sport – involving multiple functions beyond IT to set out a clear strategy, along with an understanding of how it’s going to be executed.
The new era of modernization and innovation in the cloud requires a total realignment of the enterprise when it comes to skilling and resources.
"Human capital can be very easily trained to adopt a new operating model in the cloud using cognitive services,” commented Giunta.
She continued: “Training resources to move to a cloud operating model is the most important factor when it comes to traditional IT organizations leveraging the benefits of the cloud to drive innovation. This results in faster delivery of capability and reduction in technical debt, because successful organizations will methodically look at their traditional state and continually modernize using a cloud operating model.”
The future of innovation in the cloud
Innovation will be almost impossible without cloud technology. It allows organizations to speed up development of new products and services and leverage emerging technologies that will provide the foundation of how businesses will operate in the future to benefit a smart, safe society.
Looking forward, Giunta believes the arrival of 5G and edge are interesting evolutions that will significantly impact the cloud industry.
"5G will allow for the intercommunication of cloud networks and their edges, which will provide the latency and connectivity needed to process data at the edge in real-time. This will mean all data can be processed in country, providing the data residency required by governments and certain industries.”
She continued: “Edge Computing will be the evolution that frees the cloud from the complication of geo-dependency. This way of working will tremendously improve robotics in a manufacturing environment, and as well provide a plethora of analytics to improve customer service and connect users across the world.”
“We are in that moment in time where agile, 5G networks and the edge position cloud at the epicenter of innovation.”
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