Why Cloud Adoption is becoming the new normal for Enterprise IT?

Cloud computing and the shift to cloud adoption are the way organizations are moving. This trend is  expected to continue to for the foreseeable future. Cloud adoption offers various, irresistible benefits to organizations. Various innovative solutions are available to implement cloud adoption. A number of niche third-party providers have established themselves in the recent times, enabling organizations to have more control and more flexibility with offerings on hybrid cloud. In the light of all the benefits, the shift to cloud adoption is closer to an inevitability than ever before.

In January 2020, Gartner released an article, which called cloud computing the new normal for the IT industry.

“Cloud computing is firmly established as the new normal for enterprise IT. Across industries, cloud continues to be one of the fastest-growing segments of IT spend.” – Gartner

We, at Powersolv, believe that cloud adoption has the potential to be a potent weapon in the arsenal of any organization. Given the facts outlined in subsequent sections, we believe that having a cloud strategy should be the top priority of CIOs today.

Let us address what does the term “Cloud Adoption” really mean and what are its implications?

What is Cloud Adoption?

To understand ‘Cloud Adoption’, let us get a quick overview of cloud computing. Cloud computing is the delivery of on-demand computing services and resources over the Internet, where the delivery could consist of software, storage solutions or processing power and where the organization does not own, operate or maintain the hardware resources required. Cloud solution providers usually follow the model of pay-as-you-go for pricing.

Emphasis is not on owning, operating or maintaining the hardware resources. The major and, by far the most important, difference (which offers the most benefits too) is that the customer does not have to set up their own on-premise infrastructure. The cloud service providers (IBM, Microsoft, Amazon etc.) maintain the hardware for the customer.

Cloud adoption is the strategy, which uses cloud computing as its foundation. It is a strategic, enterprise level decision to incorporate cloud computing in enterprise IT, with the aim of gaining more flexibility in scaling up IT capabilities, while achieving maximum cost optimization of cost and yet reducing risks. This offers a host of benefits to organizations. Here are some benefits of cloud adoption:

Agility and speed in the face of rapid expansion

The demand for data storage maintenance by external as well as internal stakeholders witness significant fluctuations as the organizations grow. Growing demands put more pressure on an enterprise’s IT infrastructure to maintain and improve response times for data computation and delivery. Cloud computing offers an easy and customizable solution for these need by ensuring that organizations are on their feet and can scale up very quickly.

Reduced cost

As organizations scale up, a growing concern is the acquisition of hardware resources to support the growth. However, with cloud computing, organizations can stay lean and still maintain and improve their service delivery and data management capabilities. It also reduces the risk of losses because of depreciating value of hardware resources and the maintenance costs and overheads associated with operating an IT infrastructure.

Effective usage of acquired data

Data has the potential of enabling organizations to achieve higher customer acquisition/retention rates (by effectively using data to provide highly targeted offerings and customized solutions and services). With traditional IT infrastructure, an organization is limited by how good it’s hardware is.  As a result, it is faced with high investments in IT infrastructure. However, cloud-based services offer much needed flexibility in data storage and data analysis.

Reduce downtime and improve productivity

With on-premises IT infrastructure, there is a need to maintain maximum uptime and avoid situations that could lead to the server being offline. Users of cloud services avoid such issues because providers are responsible for the upgrade and maintenance of the infrastructure. There are still on-premise servers which need monitoring, but by using cloud services, that load is shared between the organization and the provider.

Why organizations should pay attention?

In the recent times, the benefits of cloud computing and cloud adoption have increased manifold, and many organizations understand and acknowledge their importance.  According to Gartner, the global cloud service market is expected to reach $266 Billion in revenues in 2020, with a projected increase of over 17% since 2018. With the COVID Pandemic and the need for more efficient connectivity and information sharing, this number is set to increase even further. Thomas Kurian, CEO of Google Cloud, admitted as much in a blogpost, posted in March, saying that the daily usage has gone up 25 times since January.

As recent as July 2020, the projected CAGR for the Cloud Services market from 2020 through 2027 was at 16.4%. That is a tremendous growth for an industry and portrays the healthy position for the cloud services market. The reason for this projection is clear; all facts point to high levels of adoption for the cloud computing models in all the segments.

Current Trends

Increasing adoption seen during the pandemic

IT leaders worldwide are accelerating efforts to adopt cloud-based enterprise IT, during the COVID pandemic. This is displayed in the increase in IT spending on cloud infrastructure services offered by Amazon, Microsoft and Google. The reason for this is a rise in the demand for off-premises technologies in the light of shifting work patterns and need for remote information sharing mechanisms. However, many researchers believe that this shift is not temporary, and that the pandemic has effectively acted as a catalyst for those still on the fence about cloud adoption. Also, due to smaller budgets, a need for leaner operations has arisen, which means that more organization are planning to stay on the cloud band wagon.

Rise of the Hybrid Cloud

Hybrid cloud is the usage of an amalgamation of off-premises cloud-based services from various third-party providers with on-premise IT infrastructure. Niche offerings are already on the rise in the cloud computing market with players like Salesforce, Hubspot, VMWare, Ontraport, Marketo etc. offering very specific cloud-based solutions to organizations. As the market matures, this shift to niche offerings will increase as more providers try to differentiate themselves from the market. This is good for organizations because they will help increase flexibility for various needs. Instead of buying an all-in-one solution, organizations can now tweak and play around with their IT budget and spending by aligning their usage of the various services and their IT strategy as close as possible to the overall enterprise strategy.

Cost Optimization will be a key driver of the shift to cloud

As already explained, cloud adoption offers myriad of benefits. However, to tap into these benefits completely, the need to maximize savings without reducing effectiveness and efficiency will translate into the need for more optimization. According to Gartner, there will be a rise in the market for third party optimization tools.

Cloud skills will hamper the shift to cloud

As the objectives of organizations shift towards cloud adoption, there will be a shortage of certified cloud professionals to support the migration. System Integrators will be the go-to guys for organizations for the time-being, until they can have a dedicated team of professionals to manage this shift.

Conclusion

The prospects of the cloud-based market seem very promising. The benefits offered make cloud adoption a very attractive proposition. With the current times, demanding leaner operations and better cost efficiency, the appeal of cloud services has gone up. The varied and niche offerings now available and the push by providers to offer more customized services, has also boosted the flexibility offered by cloud adoption. In other words, cloud adoption is all set to become the norm in the 2020s and more organizations should start paying attention and consider cloud adoption as a viable option.