How the cloud is shaping business
Amazon Web Service is at a pivotal milestone in the maturity and adoption of the cloud, celebrating its 10th anniversary this year. Since the launch of Amazon Web Service, there has been so much innovation happening in the cloud industry that it can be hard to constantly keep up with the evolving technology. Cloud has changed the game for many legacy IT giants such as Dell, Oracle and Citrix, and has created new opportunities for others such as Amazon Web Services (AWS), Microsoft and IBM. Many smaller software and service companies are springing up with new offerings to challenge the giants, bringing creativity and flexibility to the cloud industry.
Cloud has changed the landscape for all vendors old and new – but what has remained constant is the need for encryption, availability and uptime; as well as the ability to be efficient and increase productivity with the same resources.
Why are businesses turning to the cloud?
Businesses are turning to cloud because competitors are driving them to innovate and pivot away from traditional IT structures. What has helped businesses move quickly is the growing availability of secure and scalable infrastructure, coupled with Software as a Service (SaaS) from cloud players such as AWS, Azure, Rackspace, Softlayer and Google. The ability to have “just in time” infrastructure and networks without long acquisition cycles, is compelling to innovative companies seeking to rapidly address global market opportunities. Slack, Netflix and Uber are all global success stories - but they built their business entirely and exclusively using cloud technologies. It’s astonishing when you look at how some of these new cloud based businesses are being valued, for instance Uber has an estimated value of $60 billion dollars making it more than double the value of Dell.
The benefits of turning to the cloud can be looked at financially or technically. Old technologies may only be five to ten years in operation, but many organisations are now actively seeking to move data away from the in-house data centres, to secure and flexible cloud. It has taken a whole cycle of IT adoption for the benefits of newer cloud technologies to emerge over traditional in-house server rooms. Once networks became faster with 10GB speeds available and secure Infrastructure as a Service (IaaS) became affordable, it started a migration to the newer cloud operators.
With cloud becoming increasingly reliable and secure, the benefits to organisations moving to cloud become more compelling. Many cloud operators are now setting up significant data centre operations in Europe, with the UK firmly on the radar as the largest IT market in Western Europe. The decision by the European Court of Justice in Luxembourg to render the Safe Harbour agreement between USA and the EU invalid has accelerated the quest to build out local data centres in Europe. Many data centres are emerging with London, Frankfurt, Dublin and Amsterdam leading the charge.
How cloud is growing
The journey to cloud has only started. Many organisations have yet to take the first step as they evaluate options and seek the validation of others who have made the bold move. Businesses may migrate certain data to cloud and some will remain in the traditional data centre until the time is right to move more critical or sensitive data to cloud. As billions is being invested by Google, Microsoft, Oracle, Apple, Amazon and IBM to grow services, more and more adoption will occur. Organisations will benefit from price erosion as the cloud giants seek to hook companies into its version of cloud. As a result, data centres are larger and of higher density as more compute per sq. ft. or per Kilo Watt of energy is demanded by the cloud industry.
There have been big cloud innovations in the last 12 months for businesses. The adoption of data analytics has been compelling over the past year, with the ability to make strategic informed decisions based on hard data. The avoidance of costly strategic errors is also an innovation in the last year. The servers and SaaS needed are enabled by High Performance Computing (HPC) environments. HPC needs high density data centre environments to allow the intense computational workloads to function in a cool and stable environment.
The future of cloud
Businesses will seek to gain market share through the adoption of cloud technologies – specifically data mining its customer data for opportunities. Businesses who are proactive and approach customers with services and offerings based on hard data will have an increased advantage. Those businesses who are reactive will lose out to more data driven companies. This will be especially true for financial services, banking, broadband and subscription services where data is available to be analysed.
Cloud computing is also enabling enterprises to develop new products, services and lines of business. Businesses are discovering the efficiency and financial benefits of developing a product and software in the cloud. If there is adoption of the new software it is easier to scale rapidly to meet market demand.
To meet this market demand, cloud providers must ensure their collaborations with data centres are able to cope with the development and growth of the business. Cloud computing is built around efficiency, agility and high levels of scalability. This means the data centre tasked with hosting a cloud model must have the right components to support this type of dynamic environment.
No matter how big or small the company is the requirements which cloud providers expect from collaborations with data centres are the same. Reliability, security, easy accessibility and the highest of quality facilities to ensure the data being stored there is protected at all times is needed, to provide the secure platform for businesses to utilise cloud computing.
Cloud computing has allowed successful companies to scale and gain global adoption. Companies such as Airbnb, WhatsApp, Hailo, Stripe, Evernote and Dropbox are successful examples of this. Without cloud technologies these companies would have scaled at a slower pace limited by the ceiling of compute capacity available to them. SMEs to large organisations can learn from the leaders in adopting cloud technology, and utilise this within their own companies.
Jason O’Conaill is International Partner at Infinity SDC