Deciding when the time is right to transform your business
Jul 30, 2013
Len Padilla, Vice President of Product Strategy at leading global ICT service provider NTT Europe, discusses when the time is right for businesses to move to the cloud
Originally published in Data Center Solutions (dcseurope.info)
It is clear that a growing number of CIOs are turning to the cloud to help gain a competitive edge for their business as well as looking for new and innovative ways to cut costs. A recent study by KPMG reveals that the use of cloud is genuinely dominating boardroom planning for 2013, with 42 per cent of UK organisations revealing that at least one-fifth of their total IT spend in the next 12 months will focus on cloud services. However while the business benefits of moving to the cloud may be clear, deciding when and how to implement a cloud strategy still remains a complex challenge for some.
Big questions of when and how
Deciding whether the time is right to move to the cloud raises a whole series of concerns for every business considering it. For firms of any size, questions around security, scalability and control are fundamental when choosing a cloud solution. As each business is unique, so too will it have its own set of questions. Smaller companies want to know how the cloud will give them a competitive edge, and what it will mean for their future growth. Larger firms, on the other hand, will be more concerned with how the cloud can support and improve what the business is already doing, the extent to which the cloud can interface with existing ICT infrastructure and the scale of change this move will result in. Reassurance on these issues will determine how quickly companies adopt cloud computing as the model for their ICT.
How small businesses can 'punch above their weight'
Managing ICT in-house is a major drain on resources for many small businesses, and as a result cloud email is now almost a given as far as start-ups are concerned. However, the cloud also gives businesses access to platforms which were previously the exclusive preserve of much larger companies, such as Customer Relationship Management (CRM), HR management, and collaboration tools. These cloud-based services give smaller companies access to solutions which can provide a vital competitive edge. Signing up for and configuring these cloud applications can be done almost immediately, and at a fraction of the cost of acquiring the actual hardware and software itself. The as-a-service model which cloud solutions are based on means customers only pay for what they use, leaving the outright hardware and maintenance costs to the cloud provider themselves. And since the actual platform being delivered lives on the web, it can be accessed from any location or any device with a browser. As a result, it is far easier to build a 'distributed' business structure in the cloud, than it is to do the same with 'in house' ICT systems.
One final point: the in-built scalability of the cloud means it can flex to accommodate the growth of the business: a boon for start-ups with ambitions to grow rapidly.
Medium and large enterprises are more likely to have well-developed in-house ICT resources, but that doesn't mean cloud computing shouldn't have a role in their strategies. A large number of businesses that have matured in Europe or North America are using the cloud to harness growth opportunities in emerging markets, using e-commerce as a key enabling technology. Retailers and fashion brands from these regions are using the cloud to access 'new wealth' in these markets, and NTT Europe is helping a large number of businesses in the West expand into Asia, and vice versa, based on our extensive cloud infrastructure and global network footprint. The idea of the cloud implies ubiquity and ease of access globally - but it is local datacenters and local network points of presence, coupled with local knowledge, that make it a reality.
Expanding into these markets requires robust on-the-ground capabilities, in-depth market knowledge, and the ability to 'virtually' cut and paste head office systems and processes into new regional branches with minimal set-up time. Identifying suppliers which can truly deliver on this promise, however, needs careful consideration and research. Companies looking to place business-critical applications in to the cloud should look for, as a minimum, a data center infrastructure with presence in their key markets, all joined together by a global network from a single provider. Understanding who owns the network is vital to large enterprises. This goes beyond knowing who to call when things go wrong. This knowledge can help CIOs make informed planning decisions based on the service provider's investment priorities.
50 shades of cloud
The one distinction that is important to make is between 'public' cloud services, accessible to everyone via the web; and 'private' clouds, where services are delivered over private networks, on a bespoke basis. Google Drive and Amazon Web Services are examples of public cloud services, sharing computing resources with others signed up to the service.
Selecting a suitable cloud depends on the sensitivity of the data you need to store, how it's used and how available it needs to be. Mission critical services that are central to business success or systems containing customer data will require a private cloud with high levels of uptime and security. Less crucial applications and data, for example your company intranet, can live in a less regimented, lower-cost environment.
Cloud as a catalyst for business acceleration
The emergence of the cloud has forced ICT organisations to revisit one of the fundamental questions of business technology: is it about reducing costs, driving growth or both? The 'new model' businesses which have placed the cloud at the heart of their strategy have been able to concentrate their internal ICT resources on innovation and development, rather than keeping the lights on with their existing infrastructure. Consequently they have become far more innovative, and faster to unlock new revenue generating opportunities. Instagram is a great example of this new breed of businesses: it depends 100% on the cloud to deliver its service, but the delivery depends on its service providers. This means it can focus on delivering what its customers want. Just five years ago, such a business model would have been impossible. The practical challenges of delivering the solution would have gotten in the way of the original business idea.
Don't turn back at the junction
There's no simple answer to the question of when you should move to the cloud, but businesses need to consider it now or risk getting left behind. Choosing the right cloud provider means choosing what suits your business. This provider should take a consultative approach, helping you identify the objectives for your move to the cloud, whether cutting costs, improving scalability or increasing ICT flexibility and agility. They should be able to demonstrate the benefits of their cloud solution, and work with you to ensure that it can meet your business objectives. By making the right choices from the start, the sky is the limit for what the cloud can deliver.