The use of the cloud is ubiquitous in business today. From the Internet becoming the corporate network to the IT supply chain being rewritten, Adrian Davey, IT strategy consultant at Agilisys outlines the five cloud computing trends every business needs to consider as we move beyond the cloud.
The use of the cloud is ubiquitous in business today, however, as we move beyond the cloud there are five trends worth considering:
1. The Internet is the corporate network
The corporate network has dominated much of IT in the past. However, in these enterprise cloud-enabled times it has no further purpose. The pandemic has accelerated this trend as many of us are now working from home and accessing corporate IT remotely via a VPN. This means running a complex network for a few legacy use cases can no longer be justified.
Network security has been another major catalyst to moving to the cloud. And for good reason. The security investments and quality of cloud security are already far outstripping anything that a typical enterprise can afford or replicate.
2. Software as a Service (SaaS) is the end game
The move to SaaS will continue to transform the market over time. Early demand for the cloud was based on storage and compute. The cloud provided variable capacity for the new media companies that required mass storage and needed to manage variable demand. SaaS changes this thinking as storage and compute is no longer relevant.
The future will see all software packages delivered as a SaaS. Those that don’t will have such a high marginal cost to provide separate storage and compute that they will be uneconomic.
Traditional enterprise software often comes with complex databases and pricing models that are poorly understood, which has become a barrier to change. In a SaaS model, the software is evergreen, the process is predefined within limits, and the software is configured, not customised, and fully maintained. While the initial change process has similar costs, the future downstream frictional costs are removed.
3. The cloud is becoming the end-to-end ecosystem
Cloud providers are moving towards providing a single solution for the enterprise. Microsoft is very much leading the way. With Azure, Dynamics and 365 products, it is now able to offer an end-to-end corporate solution including finance, people management, e-commerce, CRM.
Debates have often focused on best of breed vs single vendor. While the best of breed approach was often compelling, its costs and challenges were sometimes ignored. There is no doubt that the challenges and costs of integrating multiple different products together into a cohesive solution is often prohibitive.
As a consumer, I do not buy a car as a set of separate components – wheels, engines, body – from separate manufacturers and try and integrate them together. This challenge has not gone away with the cloud, even though new tools exist to make this easier.
For many customers, buying decisions will need to be based on choosing a platform, not just a product. This is being made easier as software vendors consolidate to provide the solution required.
4. The IT industry will de-skill
There is no doubt that the skills required to use and maintain IT are declining. The earliest computers were programmed by PHD students in binary code. As technology moved on, more accessible computer languages were developed so that instructions could be written in English.
This trend is ongoing with the cloud. Today there are very few applications that cannot be bought off the shelf ready to use. This has driven organisations to adapt their process to the application rather than the other way round as the cost of bespoke development is prohibitive.
This has resulted in the general deskilling of the corporate IT function meaning that it is becoming increasingly difficult to maintain all the skills in-house. In my view, the corporate IT function will transform over time to reflect this change further as the cloud reaches critical mass with the future skills-based on service managers and user experience.
5. The IT supply chain is being rewritten
As with all disruptive business models, the cloud will have an impact on the supply chain. At a simple level, the corporate market now rarely buys physical servers. This change is coming at every level on hardware, software, and outsourcing.
The big outsourcers all developed their own XaaS models with varying success. It’s fair to say that some have struggled to adapt culturally to the new paradigm of a traditional IT workforce not used to the demands of the cloud.
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A new breed of suppliers is growing. Those that were born in the cloud so are not constrained by a legacy business model. They understand the demands of the cloud, how to make it work effectively and how to service the customer. They do not have distributed centres of excellence that cannot function together, or a suite of bespoke tools, because they know better but are able to operate natively within the cloud with the tools provided and operate an integrated service.