How Cloud Computing enables Digital Transformation

Miriam Subiksha

31 Oct 2018

cloud computing and digital transformation

The influx of technologies like Artificial Intelligence, Big Data, IoT and ML has rendered traditional businesses redundant. Rapidly changing customer needs force firms to evolve and adapt. Digital transformation is the new paradigm, that helps them stay ahead of competition. Firms leverage the support of the cloud to set up robust digital transformation frameworks.  

Cloud fuels innovation by giving a compatible set of APIs for developers. Firms can reuse enterprise data. Cloud offers analytics, functional programming and low code platforms. It is essential for informed decision making. This ensures faster launch of enterprise ready products.

Rise of Cloud Computing and Digital Transformation

According to a survey by Logic Monitor, public cloud engagement and adoption is being driven by enterprises pursuing digital transformation.  By 2020, a whopping 83% of workloads will be hosted on the cloud. (Source –Forbes) 74% of Tech CFOs believe that cloud computing will have the greatest impact on their business. (Source – Forbes)

89% of enterprises plan to adopt or have already adopted a digital transformation business strategy with Services (95%), Financial Services (93%) and Healthcare (92%) at the top.

In another study, executives considered digital transformation important for survival in the competitive space. (Source –Forbes) Companies are pushing for digital transformation because it enables an enhanced customer experience, faster time to market and greater innovation.

A study by IDG reveals that 92% of executives consider digital business plans as part of their firm’s strategy. 63% of executives are very close to realizing their digital transformation goals.

Why Businesses Adopt Cloud to Fuel Digital Transformation

Businesses that implement cloud computing and digital transformation report enormous growth and improved efficiency. It enables them to stay relevant and thrive in a dynamic ecosystem. Digital transformation involves finding newer business models. Firms must continuously innovate to stay in the game, and cloud is the catalyst that fuels innovation. As businesses begin to adapt their processes to a digital space, they require cost and work efficiency, elasticity agility and scalability. The cloud provides all of these features.

Here is how the cloud enables digital transformation

1.Agility

A firm has to constantly reinvent its business models. Cloud provides the required infrastructure, platforms and computing abilities that helps firms stay agile and ready for change.

2. Cost and Labor Effectiveness

Firms don’t have to go to the trouble of investing in and managing the required infrastructure. Cloud computing allows firms to scale up or down, so firms only pay for resources that they use.

3.Security

Moving a database to the cloud offers several advantages of increased protection from threats such as data breaches, disasters and system shutdown. You can create multiple backups. There is reduced risk of system failure, especially where large amounts of data is involved.

4. Faster Prototyping

Companies follow the cycle of innovate, test, implement and repeat. Cloud helps in efficient execution of this process without the need for complicated resources and infrastructure. Hence a company can test and deploy different applications on different platforms during experimentation.

Digital transformation involves replacing legacy systems and traditional work practices with processes that support agility.  Files can be made available at any place and at any time. Authority and authentication can be determined for each user, this ensures efficient delegation. There is greater productivity due to collaborative work practices.

The Hybrid Cloud

In spite of its impressive benefits, businesses are moving away from an only public cloud model. A mix of both public and private cloud enables organizations to bring about regulatory compliance, ensure data supremacy, cost optimization, and security. A study by RightScale shows that 85% of firms are using a hybrid cloud strategy.

Hybrid cloud makes faster delivery of apps and services a reality. Firms can combine on-premise systems with an external cloud services provider in a way that provides maximum efficiency. Microsoft has recently introduced the Microsoft Azure Stack, where firms can manage both private and public cloud on a single azure platform

Google also focused solely on the public cloud. Later the hybrid cloud was adopted, with the former VMware CEO Diane Greene steering Google’s cloud strategy. Google’s partnership with Nutanix serves to strengthen the hybrid cloud model. Customers can run applications both on-premise and in the public cloud.

Digital Transformation in Action

Schneider Electric, a leader in the energy management and automation space, uses EcoStruxure Platform as the IoT backbone. It offers:

  1. embedded connectivity and intelligence.
  2. a foundation for smart operations that is interoperable.
  3. A reliable infrastructure for digital services connected to the cloud.

This platform enables faster at scale delivery of IoT-enabled solutions for smart buildings and data centers .It uses Microsoft’s Azure as the cloud framework to offer its digital services and analytics. EcoStruxure closes the gap between IT and OT.

Users are able to utilize the platform to connect equipment and software to the cloud, using IoT technology.  Schneider Electric’s EcoStruxure simplifies the process of connecting IoT devices, collection, and analysis of data, and using real-time information to improve operations.

Challenges in Implementing Cloud for Digital Transformation

Data Security and Service Quality

Information, when migrated to the cloud, requires additional security measures. The cloud service provider holds the user’s security and privacy controls, exposing critical information to attack. Poor quality of cloud services also poses a challenge. A possible solution is to retain control of data and enable real-time analysis via dashboards. Performance, scalability, and availability of cloud services are also important factors to consider.

Performance and Costs

Data-intensive applications often result in higher costs. Bandwidth requirements increase when exhaustive and intricate data is sent over the network. Organizations should move to a metered and dynamic pricing model to keep costs down. Cloud service providers must also provide the option to fix costs for each service.

Migrating and integrating Existing Systems

Migrating legacy systems is a cumbersome task. However, with a sufficient budget and organization-wide support, this can be accomplished. The challenge is to integrate the existing infrastructure with the cloud to ensure maximum efficiency and productivity.

Governance

Governance ensures that information and data are used in accordance with agreed upon policies and procedures. IT governance must also align with overarching business goals and objectives. Cloud-based systems offer only partial control over how infrastructure is provided and operated. Hence the need for stringent governance measures.

Cloud is Essential for Advancing Digital Transformation

As the world evolves and tech moves at breakneck speed, digital transformation becomes a means of survival. Cloud becomes the catalyst for this transformation and hybrid cloud will have a key role to play. In an era where success is measured by customer experience, a cloud-enabled and cloud-delivered business model helps organization discover newer channels to offer a superior customer experience.

 


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