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3 Pillars That Make Cloud The Tech Foundation Of Any Business

By Garrett Ilg—21 July 2021
Garrett Ilg

 

If anyone needed more evidence that the cloud is indeed the technology foundation for the foreseeable future, COVID-19 settled things once and for all. Companies and organizations across sectors were able to turn to their cloud-based infrastructure and application services during the pandemic to ensure business continuity, enable remote working and learning, and scale their capacity up and down as needed. Technology has been truly transformational.

Yet, too many companies and organizations still are reluctant to commit to the cloud all-in, for budgetary and other reasons. They’re still testing the waters, awarding one-off contracts and starting isolated projects. That’s hardly a strategy.

A recent podcast for McKinsey’s Future of Asia series, which I participated in with technology leaders from across the Asia Pacific region, helped reinforce for me why cloud computing is so foundational. The case for all-cloud breaks down into three pillars: speed to innovation, improving efficiencies, and protecting data/mitigating risk. One could write a book on each of these pillars, but I’ll touch on only the high points.

  • Speed to innovation: The cloud’s ability to help companies create new, sometimes world-changing products, services, methods, and business models increasingly rests on their ability to process and analyze increasingly large amounts of data quickly, sometimes in real time.

    Thanks to the cloud, even the smallest organizations now have affordable access to vast, elastic compute resources on demand, as well as applications with AI, predictive analytics, blockchain, and other advanced technologies built-in, in order to inform medical, agricultural, scientific, energy, pharmaceutical, and other breakthroughs. One example of many is Australia’s GMDx Genomics, which is using the flexible capacity of Oracle Autonomous Data Warehouse and Oracle Cloud Infrastructure to create genomic profiles of individuals to help doctors diagnose and treat them with far more precision.

    The cloud also is critical to opening up and extending innovation beyond a single organization to supplier, partner, and customer ecosystems by making it much easier to share data and connect systems and processes, noted my co-panelist in the podcast Paul Macpherson, CIO of consumer, private, and business banking at Standard Chartered .

    I couldn’t agree more. I’d go so far as to say that you need to vet your suppliers and partners based in part on their commitment to building every application, and delivering every service, “cloud first.” Any bifurcation is going to create friction, impede integration, and ultimately slow down joint innovation.

  • Improving efficiencies. The value of cloud isn’t so much about cutting hard costs. When McKinsey projected that a roughly trillion-dollar prize awaits Fortune 500 companies if they aggressively pursue cloud-based opportunities in the run-up to 2030, the consulting firm reasoned that less than 10% of that additional value will come from cost-cutting, noted Brant Carson, lead partner of McKinsey’s Asia Pacific technology practice, during our discussion.

    Cloud’s potential to improve efficiencies is far more about freeing people to focus on the stuff that really matters. It’s the ability to lower the opportunity costs associated with your IT people having to install, maintain, upgrade, and secure on-premises systems and with your line of business people having to slog through the manual processes dictated by those legacy systems. Every hour and dollar an organization spends on those tasks is an hour and dollar it’s not spending on higher-value, customer-wowing, revenue-generating work.

    The biggest single cloud-enabled efficiency Standard Chartered is realizing is with the efficiency of its application developers, Macpherson said. Rather than having to waste time spinning up new test and development environments for each new customer-facing application or application update, the bank’s developers can do that in minutes in the cloud—and take them down just as quickly.

    Where there are hard cost savings—especially with cloud infrastructure, as no individual enterprise can match a cloud provider’s hyperscale efficiencies—customers like Standard Chartered are using those savings to shift their IT investments toward more customer-facing technologies.

  • Protecting data/mitigating risk. No discussion of cloud’s long-term value would be complete without emphasizing its inherent data security advantages.

    As I’ve noted before, the average company has literally hundreds of different configurations of operating systems, databases, and applications to manage in its data centers. These highly complex configurations make it nearly impossible for IT teams to patch their systems in a timely manner every time a software vendor issues a fix, putting their valuable intellectual property, customer, supplier, employee, and other data at risk.

    Companies are far better off replacing those complex environments with more sophisticated, uniform cloud-native ones, managed offsite by vendors that have both the security expertise and financial resources to protect the underlying data from sophisticated profiteers and nation-states.

    Companies are starting to get the message. In our 2020 Oracle and KPMG Cloud Threat report (PDF), based on a survey of 750 cybersecurity and IT professionals worldwide, 75% of respondents said they think public clouds are either “much more secure” (40%) or “somewhat more secure” (35%) than on-premises environments, compared with 62% in 2018.

    Still, more than 85% of survey respondents estimated that their companies and organizations were running more than 75 “discrete” cybersecurity products,” so there’s still much work to do. Nothing less than your company’s reputation is on the line.

    The Oracle customers I have the privilege to engage with regularly are leading the way for their peers. If you’d like to contact me for more perspectives, I’ll be happy to offer any advice or services. The more companies reach for the cloud, the better for all of us.