Avoiding the cloud? Your business might get left behind for good
Just a few short years ago, we in the technology industry were touting cloud computing as the latest and greatest competitive advantage for progressive companies. Fast-forward to today, and it now seems like cloud migration is more of a hygiene factor than a competitive differentiator.
Simply put, if you’re not already moving your IT estate into private, hybrid or public clouds, you’re going to fall behind in the coming years.
Markets are digitising, they’re globalising, and they’re coalescing into each other, or splintering apart in interesting new ways. And these market shifts are changing the rules of the game for everybody.
Netflix started life as a DVD rental company, then became a video streaming service, and is now spending $5 billion a year on creating original movies and TV series. Nintendo’s modern-era began with console games, before launching a new realm of motion-sensor technology with the inventive Nintendo Wii. In its most recent ‘pivot’, the immersive augmented reality game Pokemon Go, it hauled in $200 million in just its first month.
There’s a litany of reasons for these firms’ successes – from culture, to leadership, to strategy. But from a technology perspective, boundary-pushing companies like Netflix and Nintendo all share one common principle – flexible, scalable cloud architectures that enable the rapid expansion of services, to millions of users.
These two firms have truly leveraged the power of cloud computing. But, in fact, in every industry you’ll find examples of digital cavaliers, quickly gobbling market share from slower-paced incumbents who’ve been entrenched for decades.
Failing fast, failing forward
Cloud-based digital tools and assets allow organisations to create new routes to market, insert themselves into new value chains, and address entirely new customer segments and geographies. They help the organisation to better understand changing market dynamics, influences and trends – and to respond with speed and decisiveness.
The cloud also enables faster, lower-risk experimentation with new strategies, products or services. If a prototype proves successful, then it can be scaled up to achieve commercial value. And, if it’s unsuccessful, then it can be quickly shut down and the team can move on to explore other ideas – it’s a principle we refer to as ‘failing fast, and failing forward’.
With the real-time data streams that cloud computing makes possible, businesses can fine-tune every aspect of their operations – making minor tweaks where the data points to improvement opportunities. Perhaps the data leads you to make changes to the production schedule, to change supplier relationships, or to change the tone of the marketing campaign, for instance.
We talk about a cloud-centred business being a blend of both art and science. This is the true beauty of the cloud: it unleashes the creativity of the creative types, to dream and to design. At the same time it provides a platform for the more left-brained team members to form methodologies, gain control, and ultimately make ideas commercially-viable.
In fact, the science of big data might reveal opportunities for creatives to find an innovative solution to capture that market opportunity.
Now, imagine an analogue business trying to compete, without all of these cloud benefits?
Taking the plunge
Despite all of the cloud’s compelling advantages, migrating part or one’s entire IT estate to the cloud often entails incredible complexity, uncertainty and cost. These concerns tend to cause inertia in decision-making, particularly in larger, more entrenched businesses, or those in protected and slower-moving industries.
Some traditional businesses are so consumed with the day-to-day grind of simply ‘keeping the lights on’ that they hardly have time to think about future-proofing their enterprise technology. And others still are remaining relatively successful – for the time being – without having made any serious attempt at digital transformation.
But the question is, for how much longer will this last?
For large organisations, cloud migrations are certainly complex and scary. But there are ways to manage the risks and costs, and become more certain of success. It generally starts with a comprehensive evaluation of your IT environment, and a very sharp understanding of your own business, your market, your customers, and your competitors.
Find a trusted technology partner, one that’s helped other firms through the process of cloud migration, and is willing to shoulder much of the risk and provide guarantees in terms of both costs and business returns. Once you’ve selected the right strategy and the right partner, commit to the transition and pour all your energy into making your cloud migration a resounding success.
As we see with the likes of Netflix and Nintendo, cloud-based organisations have one crucial advantage over their more traditional peers – the ability to continually reinvent themselves, serve new customer demands, and respond to ever-shifting market landscapes.
The time is now. Take any longer and you may never catch up.
AJ Hartenberg is T-Systems' Portfolio Manager for Data Centre Services. T-Systems is a telecommunications company founded in South Africa. It now employs over 1000 people and serves major business accounts.