The evolution of cloud computing in a global context shows the holistic impact on technology, business, and of course, people. If Cloud 1.0 transformed how we consume compute, storage, and networking services, Cloud 2.0 will teach us more about digital transformation itself.
Crystal Bedell, technology writer specializing in B2B technology calls Cloud 2.0 “a new era of the Public Cloud”. The use of Public Cloud is more and more present in the main IT hubs of the world and shows a tendency to continue with its two-digits growth.
Cloud 2.0 is about digital transformation
“We have entered the cloud 2.0 era, where organizations are adopting a cloud-first or a cloud-only strategy”, argues Sid Nag, research vice president from Gartner.
For those who were reluctant to adopt digital transformation, rushed migrations are the further challenge. Cloud providers have grown their business with at least 15% per year, according to the latest ISG index. Naturally, there is expected that they will be rapidly growing in Q1 and Q2 of 2020, despite the overall economic downfall.
Cloud computing offers the major benefit of scalability. A lot of companies choose now outsourcing providers to help them migrate and increase the feasibility and overall business continuity. Companies want to increase business availability to survive through and thrive after the crisis. Enhanced flexibility by streamlining processes and the need for future-readiness along with fixing compatibility issues by upgrading servers and resolving inconsistencies are top priorities for those who want to stay competitive.
Public Cloud Computing is taking over
The spending on public cloud services was forecasted by Gartner Inc. to a total of $3.4 billion in 2020, a 25% increase from 2019. Sid Nag: “Moving to the cloud and investing in public cloud services have become imperative to the success of digital business initiatives. It’s no longer a question of ‘why’, but a matter of ‘when’ organizations can shift to the cloud”.
Cloud application services (SaaS) remains the segment where organizations in IT Hubs like Romania will spend the most and represent 42% of public cloud services end-user spending in 2020, says Gartner. End-user spending on SaaS cloud application services in India will increase with a total of $1.4 billion in 2020, an augmentation of more than 21% per year.
Cloud-based services revenue proportions are anticipated to more than double in the next two years, according to the Microsoft Cloud Practice Development Study. The results of 1136 surveys from November 2015, that were conducted with Microsoft Partners. The sample size of n=1136 has a maximum sampling variability of ± 2.91% at the 95% confidence level.
Results show that currently, 20% of their overall revenue is driven by cloud-based products and services. Research participants anticipate that proportion will more than double in the next two years, to 47%. Value added services including Project Services, Managed Services & Packaged Software represent 74% of partner revenue in SMB and 82% in Enterprise.
Most of the respondents have a Cloud Infrastructure and Management practice (78%) or a Cloud Application Development practice (53%). A little less than half of the respondents offer Mobility and Security (46%), as well as Data Platform & Analytics (43%).
Just over half of these practices are less than two years old.
Strategy and flexibility as the main challenges of this new paradigm
The lack of a comprehensive cloud strategy can create unnecessary risk exposure as it leave most organizations with an amount of unsanctioned public cloud use. Digital Leaders must develop a clear enterprise strategy before cloud is implemented or risk the aftermath of an uncontrolled public cloud. Until 2025, 90% of the organizations that fail to control public cloud use will be in danger to unwillingly share sensitive data, says Gartner.
“A lot of times, one of the first things companies do in the cloud is migrate existing apps, workloads and the data they operate on to the cloud” says David Schatsky, Managing Director at Deloitte. Even though public cloud providers offer vectors to cloud progress like security functions and functional environments tailored to industry specificities, prudency is advised when migrating to the cloud.
“The security model in the cloud is rather different, and sometimes data and assets need to be secured in a more granular way, so data classification is part and parcel of a prudent migration to the cloud”, continues David Schatsky.
Organizations that focus on fast automation to facilitate faster time to value must prove they are flexible and agile enough to undergo rapid change. Migrating mission critical IT workloads to the cloud to address the business demands of faster compute performance and scalable resources requires “an organizational shift, and a cultural willingness to let go.”, says Nag.
Unlike traditional datacenter infrastructure that is limited in these capabilities, the public cloud model offers the flexibility to scale infrastructure resources on-demand which can be a challenge. Nag: “There are apps written in the old mode of app dev and to convert them to the world of cloud takes time, effort and a willingness to do so. Plus, it takes skill. It’s not a nontrivial task. Those are the things that are slowing the process of moving everything to the cloud.”
How Public Cloud enables Digital Transformation
Public cloud solutions are still the catalysators of business transformation and agility. Inconsistent growth rushed migrations and an uncertain economic future are disruption factors for business success. Companies must strategize faster and be more adaptive than ever. The Public Cloud represents an opportunity for organizations of all sizes and in all industries to stay competitive and become digital leaders without investing exhaustively to scale the technology infrastructure.
The true value of Public Cloud is seen as companies benefit from elastic, scalable and low-cost solutions that help them improve their processes and their time to market. Increased security and performance requirements are a further benefit of the Public Cloud, as distributed app workloads and DevOps-driven SDLC practices are more secure, reliable, and specific.
Furthermore, the public cloud is going to support modern technologies like AI and Machine Learning in the future. They have been playing a key role in all kinds of innovations but only few businesses have access to implement these solutions in their production environments. Looking at companies like Amazon, Microsoft or Google “all three providers built up an enormous amount of computing power in recent years and equally own a big stake of the 40 billion USD cloud computing industry. For all of them, expanding their portfolios with AI services is the next logical step in the cloud.”, forecasts Rene Buest, the Director of Technology Research at Arago.
Public Cloud solutions are the enablers for digital transformation, which is everything Cloud Computing 2.0 is about.
By facilitating agile digital transformation and making businesses profitable, growth trajectory of public cloud services market revenue will remain consistent as organizations continue to embrace SaaS solutions to power their businesses.