Thought Leadership Article
The cloud, the cornerstone of business transformation
The cloud is not just about optimizing costs and improving operational efficiency. As a business accelerator, it opens the door to innovation and value creation. However, to benefit fully from the Cloud, businesses have to embrace all of its technical components but also the organizational, financial and strategic ones. Eric Perrier, VISEO's CEO shares his vision.
The Cloud’s accelerated rise is undeniable. Already engaged in a broad digital transformation of their business model, companies have, during the health crisis, massively used cloud technologies to organize remote work, engage with their customers and build resilience.
According to Gartner, global spending on public cloud services is expected to increase 18.4% this year to a total of $304.9 billion. The share of the IT budget dedicated to the cloud should increase from 9.1% in 2020 to 14.2% in 2024*.
Progressive rise in the cloud
This trend must not ignore the reality of the field. Far from being a marketing message, the picture is not limited to hybrid platforms, between public and private cloud. The companies we support are still largely operating in our on-premises environment.
Organizations will not break free from this pattern for a few years. During the transitional phase, companies must develop a holistic vision of their assets in applications and technologies, and manage their processes in what has become a complex environment. Furthermore, not all applications are meant to migrate to the cloud due to reasons related to criticality, security or costs. This transition phase should inspire people to make the best of both worlds. The public cloud provides scalability and evolutionary options for infrastructures. On the other hand, an on-premises environment or a private cloud allows a company to keep control of its applications and sensitive data.
Cloud computing emerged fifteen years ago under the pressure of the cyber-merchant Amazon who wanted to make its infrastructures profitable. Now, it is just entering into its teen years. To be relevant, the cloud model must be managed in both its technical and financial aspects, with a FinOps approach.
The market still faces a lack of platform maturity of and a scarcity of IT resources. While the IT job market is challenging as a whole, recruiting cloud experts is even more challenging.
From financial optimization to value creation
Like any learning curve, the market follows different stages of ownership. The move to the cloud was initially a response to financial optimization by switching CapEx expenses to OpEx. By outsourcing infrastructure or by subscribing to a plan, an organization could expect costs to decrease.
Next, companies capitalized on the performance gains brought by the cloud in terms of agility or scalability. Today, the considerations have shifted to business. The cloud reduces production lead times (time to market) by using distributed architectures and continuous deployment and integration (CI/CD) logic.
Companies are especially looking for value in the innovative services offered by hyperscalers in the field of the Internet of Things (IoT) or AI.
There’s no need to reinvent the wheel, just choose from the building blocks already available or follow the business scenarios offered by cloud providers. With the multi-cloud approach, companies cherry-pick providers and the most competitive and/or innovative services available at any given time.
The cloud is becoming a formidable business accelerator by making innovation accessible to large companies as well as SMEs. It goes beyond technical and economic considerations alone and the company must have a strategic vision of the phenomenon in order to grasp all its dimensions.
Paradigm shift for technology service providers
Our customers are not the only ones making their revolution, software companies are also adapting their models to transition from the old world to the new world. With the rise of the cloud, market demands are for services other than traditional managed services or third-party application maintenance.
A software company will be expected to be able to combine a large number of know-how to manage architectures of increasing complexity with hybrid models. A cloud project requires you to surround yourself with architects, cyber experts or DevOps and FinOps specialists.
A service provider must also develop an intimate knowledge of the major cloud platforms, supported by Amazon Web Services, Microsoft Azure or Google Cloud, in partnering with these digital giants and anticipating the developments outlined in their R&D roadmaps.
By and large, the spread of the "as a service" approach blurs the boundaries between the world of software and that of services. Again, software companies are building new relationships with major publishers through strong partnerships and certification programs.
2021 is still the infant stage of true cloud transformation. To measure the full potential of this revolution, companies and their partners will have to tackle all these projects head-on. Cloud technologies support the foundations of tomorrow’s business: agile, resilient and able to quickly rotate its model according to market opportunities or crisis situations.