Cloud: Its all about WHEN not IF
The key characteristics that define a dynamic and ever evolving B2B space across organizations and geographies are the imperatives driving the C-suite that can be outlined as:
• CEO imperatives: Revenue growth, Superior customer service and Business efficiency.
• CFO imperatives: Risk and Compliance, Cost reduction and Cash flows.
• CIO imperatives: Investment protection, Return On Technology Investment (ROTI) and Rapid deployment.
Statistics of Cloud and cloud based services
These business imperatives when read alongside some of the global statistics quoted by leading research analysts like IDC / Gartner / Verizon create a global business direction – the movement towards Cloud and cloud based services.
1. 38 percent growth in enterprise spend on cloud in 2014
2. 55 percent of the overall IT budget is spent on cloud and managed services and 45 percent on traditional IT
3. 20 percent of the customers will no longer run ICT solutions in-house by 2017
4. Cloud software market to be $75B by 2017, UC cloud market to by $62B by 2018 and CC cloud market to be $11B by 2019
5. Sales force - a cloud only model
6. Microsoft’s commercial cloud revenue grew 88 percent quarter-ended 2015
7. Oracle’s cloud revenue growth - software and cloud revenues up 5percent to $7.3 billion. Cloud software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) revenue was up 45 percent to $516 million.
8. Amazon Web Services pulling in about $6 billion per year.
Few must-haves for adoption of cloud
CIOs, especially in emerging markets like India, while contemplating the adoption of cloud will be forced to take the step sooner than later owing to the above business dynamics. While statistics indicate rampant adoption across the board, there are a few must-haves that are in short supply in the current scenario and are driving the decision.
• Time: Businesses need to be agile. The timelines from an idea to its GTM are shrinking. Above all, the first mover advantage is huge. Customer acquisition and retention is directly linked to the speed with which an organisation innovates and technology has a huge role to play in it.
• Cash: Ask any CFO and he will tell you how difficult it is to either mobilize cash or show ROCE (Return on cash employed) to the expectations of various stake holders.
• Skilled workforce: Domain experts, people with deep technology skills, vertical expertise among other aspects are far and few.
With this as the backdrop the benefits of cloud stand tall
1. No upfront capex investment (CFO, CEO)
2. Better ROCE (CFO)
3. Off balance sheet transaction, full tax deductibility of operational cost, improved liquidity, reduction in fixed costs etc. (CFO, CEO)
4. Improved application and platform availability by leveraging cloud providers’ domain expertise and technology skills (CIO)
5. Adopt cutting edge and new technologies without upfront investment. Lower risk of failure.(CIO, CEO )
6. Reduce GTM time (CEO)
7. Consume as a service. Great way to de-risk from peaks and troughs of business. (CFO , CEO )
8. Predictability of outflow (CIO, CFO)
9. Relieve IT department from routine tasks and align them closely with business priorities. Smaller IT team, yet more effective. (CIO, CEOs)
10. Improve green footprint and responsible e-waste disposal (CIO , CFO , CEO)
CIOs need to proactively work on their cloud strategy. There is no one size fits all approach. And yet, everything need not be on cloud! There are options of private cloud (infrastructure hosted internally), public cloud (application and data stored in provider’s data center) and hybrid cloud (combination of public and private cloud and sometime on-premise services). Incumbent partner and/or system integrators can play a significant part in this journey right from transition phase to transformation phase. The specialist solution integrators understand an organisation’s eco system, multiple integrations that may be needed including legacy systems and customizations, all of which can be leveraged to ensure that adoption of cloud is with least amount of disruption to business.