Is Cloud Transformation a Good Idea in Our Current Economy?
December 8, 2022
December 8, 2022
As businesses move from on-premises infrastructure to the cloud at ever-increasing rates, the current pace of cloud transformation seems near unstoppable. And the stats bear this out. The global digital transformation market—valued at $594.5 billion in 2022—is expected to reach $1,548.9 billion by 2027. That’s a CAGR of 21.1%.
Cloud computing is enabling businesses of all sizes to achieve economies of scale. But for some, the transformation process still appears daunting. In truth, without adequate preparation, the outcome of the move may not supply the desired results. Further, with inflation rising, is it going to be worth the cost and the effort involved?
This article looks at why prioritizing the digital transformation journey is key to achieving strategic goals and improving a company’s bottom line.
Cloud transformation refers to moving all of an organization’s data, applications, software, and IT infrastructure from local servers to the cloud. It’s not to be confused with cloud migration, which involves transferring only a portion of these assets to the cloud. Cloud transformation goes much deeper, and it can end up being quite a lengthy process.
Primarily, cloud transformation leverages the advanced capabilities of the cloud to support long-term business growth. This is a valuable tactic, which saves money, accelerates time-to-market, and streamlines business processes—among other benefits.
A successful transformation strategy goes beyond modernizing a company’s existing systems. Rather, the cloud-first approach offers a whole new way of running a business. This means any new service or application gets automatically deployed to the cloud. In addition to eliminating any additional work required to migrate the system later, it has the advantage of letting companies start using and gaining value from their new system right away.
There are tremendous opportunities in the cloud—especially considering the vast capabilities it provides. Though levels of utilization and transformation will likely vary across industries, cloud transformation is vital to ensuring that companies remain relevant in a competitive economy.
When evaluating whether this approach is beneficial, there are a couple of factors companies need to consider:
Manual processes slow business operations and eat away at the bottom line. By contrast, cloud computing provides tools to automate these procedures so that staff can focus on other priorities.
The speed at which companies release products impacts their success. Cloud transformation gives developers tools to help automate and speed up product releases and new features.
Cloud transformation is more than the latest technology. It’s a strategy that allows companies to operate a more streamlined and efficient business workflow. One that sets them up for success. Using this approach gives organizations several advantages, explored in more depth here:
With companies in a race for the top spot, they need access to technology and enabling resources immediately. Running their operations via cloud computing helps businesses add and remove services on demand—securing resources in minutes rather than days. Cloud computing also lets firms take advantage of the rapid release of new features using DevOps processes, meaning they can automate the build and release cycle.
Legacy systems such as System Applications and Products in Data Processing (SAP) still play a role in many organizations. As such, companies must continue to support their capabilities. This scenario can be dealt with in several ways—two that are common to cloud migration planning.
First, using cloud technology can help companies rewrite the entire system. Unfortunately, many legacy systems were written using outdated coding languages. Thus, finding resources with these specific skills can be a challenge. Moreover, most businesses consider it too time-consuming and costly to rewrite the system.
The second option is to take advantage of system integration tools to connect legacy apps to other systems in the cloud. With this approach, companies keep the core functionality of the legacy while still being able to take advantage of some of the cloud’s newer features.
Using cloud technology for information storage lets companies put their data in a safe, offsite location. The immediate benefit here is cost-related, as storing data in the cloud is cheaper than buying equipment to back it up onsite. And, with on-demand provisioning, storage space can easily scale as needed.
Service interruptions lead to lost revenue. However, a proper disaster recovery option can help a business recover their data quickly. With an offsite backup strategy, there’s no delay in accessing the data to get operations back online—fast.
Clouds are designed in a way that distributes workloads across multiple servers and geographic locations. That way, businesses aren’t relying on one server. The result is near 100% reliability in running their systems.
Cloud computing enables companies to modernize business processes to make them more efficient. This means lower labor costs. Moreover, it helps to accelerate time-to-market and release products to customers quicker than their competitors. The result is a first-mover advantage—that is, the company captures revenue before competitors catch up.
As cloud resources such as computing power and storage are charged on a pay-per-use model, companies only pay when they use those resources. In addition, software licensing is more affordable in cloud computing. Instead of purchasing bulk licenses, companies are able to add or remove licenses as they grow. This new operating model also saves on infrastructure costs. There’s no need to purchase equipment as the cloud provider already owns and manages the infrastructure.
Lastly, cloud transformation gives businesses advanced tools to innovate. The process of innovation fuels new products and even new markets, translating to higher growth rates for the organization.
Cloud transformation is a valuable business strategy that helps companies to compete in today’s digital-first environment. With this approach, companies can use advanced technology to improve agility, modernize outdated systems and processes, and achieve first-mover advantage. These benefits positively impact the bottom line and help companies reach their long-term goals.
Approyo is a full SAP service technology company with extensive capabilities in cloud transformation strategies. Their team of experts has decades of experience helping companies achieve more through cloud computing. Reach out to Approyo to find out more.