More than a decade ago, when organizations started moving data centers and software to the cloud, saving money was the primary argument. As a result, many companies continued to deploy cloud solutions in silos while maintaining their traditional core systems.
Now, digital transformations have shifted the argument. The cloud is not only an enabler for making businesses more digital. It’s an essential business driver.
For companies that still rely on a traditional on-premise enterprise infrastructure, change is urgent. Legacy systems are hitting their limits:
They’re complex, fragile, inflexible, and costly to maintain. They can’t keep pace with business demands for new services needed to deliver an exceptional customer experience around the clock.
Distributed and mobile workforces are putting pressure on existing applications, leading to problems that are increasingly difficult to resolve in a timely way.
Major enterprise application vendors, including Microsoft, SAP and Oracle, are focusing their R& investments in favor of their cloud portfolio, gradually passing the responsibility of maintaining on premise obsolete applications directly to companies.
These factors make traditional IT systems unsuitable for large-scale digital transformation. On the other hand, a public cloud environment provides stability, flexibility, improved security and the agility to test and deploy new products and services built with innovative technologies. Faster access to innovation is a key success factor to stay ahead in the Business 4.0 journey. Furthermore, the competitive differentiation and revenue to be gained from real-time technologies that will transform the customer experience and even business models – including data analytics, AI/ML, and Internet of Things, AR/VR – require massive computing power available only from public cloud vendors.
Yet as recently as 2016, according to Forrester’s Predictions 2018: Cloud Computing Accelerates Enterprise Transformation Everywhere, only one-third of companies in North America and 39% in Europe had adopted public cloud infrastructure platforms, while 45% had yet to deploy cloud-based software solutions.
If executives consider the technology-enabled capabilities they need to transform their business models, the case for moving enterprise infrastructure and applications to the public cloud emerges easily.
Netflix was among the first companies to turn to the cloud after launching its online streaming service in 2007. The company invested $40 million in the mid-00s to build out its data centers and pay for the license fees to stream 1% of its movie catalog. Netflix executives quickly realized they would have neither enough money nor the data processing expertise to stream the remaining 99% of its movies to its growing customer base-long before the company began offering original content.
Today, Netflix no longer owns any data centers, and its cloud-operated streaming service generated more than 90% of its revenue in 2017.
Sky News covered the spring 2015 UK General Election with live streaming video of 150 constituency counts, setting a Guinness World Record for the most concurrent live streams for an event. Sky news used Google Cloud infrastructure to meet high video-streaming demand and deliver live streaming, processing about 2.25 TB streaming data in total.
Norway based Auka provides white label technology through its payments platform to benefit banks, merchants and private customers. Auka’s home market, Norway had well over 2 billion card transactions in 2016 alone. Using Cloud, Auka built a powerful, resilient financial services platform, that can accommodate ever-growing volume of mobile transactions, with extreme scaling capabilities.More recently, Cox Automotive integrated its media brands – Autotrader and Kelly Blue Book – with a cloud-based real-time advertising and bidding platform that expands the reach of both brands. The company plans to close more than 40 data centers, reducing operating costs while investing the savings in new applications and services, such as an Alexa vehicle valuation skill, designed to appeal to vehicle buyers and sellers around the world.
Business Context is Critical
As these examples illustrate, business context is critical. When companies merely shift current applications and infrastructure to the cloud, they overlook opportunities to advance or extend their business models and stakeholder experiences. But when executives emphasize business drivers in their decision-making, they will see more possibilities for using the cloud beyond cutting capital expenses, ending software maintenance contracts and reducing IT staff.
Once business leaders have identified the technologies that will create revenue and improve the customer experience, the cloud provides a platform for experimenting with new products and services and implementing the best solutions quickly. Join our cloud leaders and technical experts at Google Cloud Next ’18 to discover how your enterprise can benefit from the cloud advantage and take your organization to new heights.
About the author(s)
Suranjan Chatterjee is Global Head, Cloud Apps, Microservices & APIfication at Tata Consultancy Services (TCS). In this role, Suranjan helps the world’s leading enterprises leverage cloud services to fuel innovation, accelerate technology adoption and realize speed, agility and scale.
He leads strategic initiatives for cloud-based application modernization and integration service offerings and is focused on driving growth related to cloud-native application development, migrations, hybrid cloud integrations, microservices design, “API-fication” and containerization.
Suranjan has over 21 years of experience in IT solutions, lending his expertise on many enterprise transformation projects as both a consultant and business leader. Prior to his current role, he held multiple positions at TCS involving the Oracle business, where he oversaw areas such as emerging business opportunities in India and other growth markets, and the management of presales and numerous client engagements.
Suranjan currently resides in India with his wife. Outside of work, Suranjan is an avid reader of thought leadership articles from leading publishers and is a connoisseur of world cinema.