Industry
- Cloud
- Google Cloud
- Microsoft Cloud
Enabling Enterprise Agility & Resilience with a Robust Cloud Strategy
TCS-Google Cloud: Driving Innovation and Digital Transformation
TCS and the Microsoft Cloud: Bringing Transformation to Life
Highlights
- Globally, for companies that focus on innovation, cloud is a key investment with 59% reporting that it is crucial for their organization’s future.
- 75% of TCS survey respondents said they’ve invested in AI and machine learning capabilities over the past two years, while 78% said they plan to do so over the coming 12-24 months.
- Majority of the respondents agree that cloud is a catalyst for innovation. It’s the core pillar for data-intensive computing — generative AI, edge and quantum computing, among others, that will lead to the transition to Cloud 2.0.
Executive summary
Recent findings from TCS demonstrate ongoing cloud growth, despite economic challenges.
New drivers of cloud investment, such as Generative AI, are increasing demands on digital infrastructure, sparking a new era of digital transformation. Cloud strategies will continue to evolve. Over time, companies gain skills and expertise. They move from a single to multiple cloud providers. These new skills and knowledge move companies from being cost-oriented to creating new sources of value-add, such as the trend toward Generative AI.
With an ecosystem strategy, a cloud-based approach can be used to ‘up’ your rate of innovation, improve your partnering and relationships with suppliers and retailers, and speed up business processes. More skills with cloud can provide the lower costs of adjustable scalability. A good cloud strategy will improve your ability to deliver superior customer experiences and perhaps bring in new sources of information (e.g. IoT) that were previously unavailable.
Organizations are seeking to optimize their cloud investments. First, they must optimize their spend on cloud infrastructure to get expenditures under control (Horizon One). Secondly, they are laser focused on optimizing the ROI of their cloud investments to extract greater business value. This is what we call Horizon Two or Cloud 2.0
The survey
A new TCS survey of cloud usage (Connected future: How Cloud Drives Business Innovation, 2023) reveals interesting statistics: 68% of enterprises believe that the cloud is crucial to their future.
But cloud strategy is complicated. Over time, your ideal use of cloud will transform your business. The important change will involve moving from early cloud adoption to innovating business models and value-added services. The final stage will involve making your platform the first place that customers and suppliers go to. From this final stage, more innovation can occur. You can think of this transformation as moving from Cloud 1.0 to Cloud 2.0. In Cloud 2.0, your value added will be different from what it is today.
Stage |
Key tasks recommended |
Percentage of North American companies at this stage |
4. Transform your business and build a purpose-driven ecosystem that enables customers to achieve their goals (Cloud 2.0) |
|
9% |
3. Innovate business models |
|
29% |
2. Build digital core (Cloud 1.0) |
|
46% |
1. No plans to participate in cloud ecosystem |
|
17% |
What the study says
What these statistics reveal is that there is a learning curve to thinking about how to use cloud technology.
In the early years, the battle is about managing scaling, costs, and in some cases, limited innovation. Most companies in North America (68%) understand that the cloud is important. But how they understand its importance will vary. Part of the reason is the varying degrees of expertise in cloud technologies, according to the North America survey.
- Only 27% believe that they have achieved full cloud maturity
- 38% believe that they have achieved most cloud-based goals for critical applications
- 29% have achieved some cloud-based goals for critical applications
- 7% are struggling with moving core activities to the cloud
Given these challenges, it’s no surprise that success with the cloud means success with managing large amounts of data and achieving scalability. Globally, for companies that focus on innovation, cloud is a key investment with 59% reporting that it is crucial for their organization’s future. This is especially true for artificial intelligence (AI): 75% of respondents invested in AI and machine learning capabilities over the past two years, while 78% plan to do so over the coming 12-24 months.
Some North American companies will be focused on the cost advantages of cloud. If they get their cost estimate wrong, and 40% do, they worry that long term cloud use will be too expensive. In fact, 27% feel under pressure to justify their cloud decisions. But these companies are typically at Stage 2. They have yet to consider how cloud use can allow them to increase their revenues. They are TCO oriented (Total Cost of Operations) rather than TVO oriented (Total Value of Opportunity) oriented. With a TVO orientation, they are thinking about how the cloud can enable new businesses, new value added, new revenues and better branding. For them, improving customer experience, improving processes, and adding value to their offering are key decisions in justifying cloud usage.
Source: 2023 TCS Global Cloud Study
Companies are under regulatory and public pressure to report on their ESG issues. The cloud is widely used for making such data more easily collected and more visible. Challenges remain in reporting on employee diversity and community involvement, but the majority of topics are benefiting from the cloud.
Security and change
There’s a difference on how cloud security is perceived.
39% feel confident that they excel in cloud security and have no issues. But 20% are concerned that cloud security is a major barrier to innovation.
The larger global obstacles to cloud-enable innovation are three-fold:
- 40% of companies worldwide worry about disruptions and unplanned downtime
- 37% are reluctant to move from full optimized legacy IT or ERP systems
- 34% worry about the rigidity of their business processes and business operations
The reasons that these areas worry managers are based upon FinOps, DevOps and agile practices. Roughly 45-47% worry about tying strategy to cloud objectives, ROI metrics, FinOps and DevOps. Agile issues are a concern of 52% of those surveyed.
So, whether you are using a hybrid cloud (78% in North America) or just a public cloud, your concerns remain the same. You need to have confidence that you won’t have to deal with expensive downtime.
Conclusion
Much has changed in the past decade since 2011, when TCS conducted its first cloud survey.
There has been a gradual shift in mindset from cloud as an IT-centric solution to cloud as a critical business strategy. In that first TCS cloud study, discussions centered around optimizing computing resources and pay-per-use pricing models. At that time, cloud’s role in innovation was largely confined to its ability to generate cost savings that could then be redirected to other areas of investment.
Today, the cloud is a catalyst for innovation, as a majority of respondents in this study reported. It’s the core pillar for data-intensive computing — generative AI, edge computing, quantum, among others — and hyperconnected ecosystems that bring customers, partners and employees together.
Contact
Contact
