The total IT spending on cloud services, according to Gartner, was $563.6 billion in 2023. This figure is estimated to hit $678.8 by the end of this year and exceed $1 trillion in just three years from now.
A worldwide survey conducted by Statista that featured over 750 enterprise respondents showed that 73% have implemented hybrid cloud solutions into their enterprises.
These figures paint a clear picture—the cloud is the future for businesses. With benefits ranging from infinite scalability to a significant reduction in infrastructure and operating costs, migrating to the cloud is no longer just an option but a necessity to stay on par with the market.
This blog will walk you through how you can leverage the cloud and all the innovations coming into this space to future-proof your business, the challenges of cloud adoption, and how to navigate them effectively.
What Doors Can Cloud Innovations Open For You?
Migrating to the cloud does have its obvious benefits like eliminating the need for physical infrastructure, the workforce required to maintain it, and the obvious overhead costs that come along with it. That said, the innovations in this niche can open up a world of possibilities for your business.
Expand Your Market Reach And Generate New Revenue Streams
Traditional market expansion, as you know, involves monumental upfront costs, personnel, and logistics. When your business is on the cloud, you can deploy your services into new markets in a fraction of the time and pay only for the resources that you use to scale up.
In addition, cloud-based solutions allow you to adopt innovative business models such as pay-per-use, subscriptions, and as-a-service offerings, which will enable you to tap into new revenue streams and cater to changing customer demands.
A case in point is Netflix, which started as a DVD rental company in 1997. After a failed attempt to set up and manage data centers themselves, they transitioned to the cloud using Amazon Web Services (AWS). After establishing its presence in the United States, it expanded into global markets in 2010. Fast forward to 2024 and Netflix is now a 300 Billion-dollar company with over 277.65 million paid subscribers in over 190 countries.
To further emphasize the importance of why you should consider the switch, think back to what happened with Blockbuster. It was the leader in the video rental space had over 9000 stores at its peak (compared to Netflix’s 11-odd stores), and went bankrupt in 2010 as it failed to adapt and capitalize on cloud technology (among other reasons) like Netflix did.
Enhance Your Customer Experience
It is common knowledge now that customers don’t just prefer personalized services but rather expect them. A study conducted by McKinsey found that over 70% of customers fall under this category.
Migrating to a cloud-based platform will enable you to integrate a host of AI-driven analytics tools capable of tracking interactions across all touchpoints, gauging their mood with sentiment analysis, and everything in between.
Another significant upside of cloud services is the automation capabilities they support which can reduce the time-to-market of new products and feature updates, and even allow you to deliver services instantly (which, according to Zendesk’s CX Trends Report of 2023, 72% of customers expect).
Starbucks, the famous coffee chain, now runs its operations via AWS, which has allowed it to scale its retail operations effortlessly and enhance its customer service and engagement. The result has been a 4-point increase in their GAAP operating margins (from 14.2% to 18.2%). In addition, their 90-day loyalty program has seen a 14% increase year-over-year with 32.6 million active members as of 2023.
Achieve Seamless Integration and Connectivity
Moving your business to a cloud-based infrastructure may seem daunting at first. One concern is whether you can recreate the integration you rely on with your current technology stack. However, cloud-based platforms offer three crucial advantages: cross-platform interoperability enhanced observability, and the ability to create a unified digital ecosystem. Let us take a closer look at them.
1. Cross-Platform Interoperability
The constant state of flux that market demands are in combined with the rapid advancement of technology requires businesses to be agile enough to adapt at a moment’s notice. Businesses taking advantage of the cloud-based infrastructure’s cross-platform interoperability are now operating on multi-cloud platforms to leverage the best features of each service provider.
The cloud uses technology like APIs (Application Programming Interfaces) for seamless communication between multiple systems within a cloud or even between multi-cloud environments. Cloud platforms like Amazon API Gateway and Apigee (Google Cloud) provide fully managed services for creating and managing these APIs.
Meanwhile, data integration tools like Talend, Microsoft Azure Logic Apps, and SnapLogic simplify the process of synchronizing data across hybrid environments. Finally, you have solutions like Zapier and Workato that make integration accessible to both IT and business teams by automating workflows without extensive coding.
2. Enhance Observability and Infrastructure Monitoring
Another significant advantage of the cloud is the advanced monitoring tools you can leverage to monitor the performance and security of your cloud-based infrastructure.
Platforms like Grafana, Prometheus, and Middleware.io not only track metrics and generate reports but also visualize data in a way that highlights potential bottlenecks or failures before they impact your services.
3. Build A Unified Digital Ecosystem
Cloud platforms also allow you to create a unified ecosystem to ensure that none of your business operations, no matter where they are located, are siloed. Tools like Microsoft Teams, Slack, and Google Workspace enable your teams to connect and collaborate from across the globe.
Platforms like IBM Cloud Pak for Integration and iPaaS solutions such as MuleSoft, Dell Boomi, and Informatica Intelligent Cloud Services also let you integrate your on-premise legacy systems seamlessly with your cloud-based systems.
Unilever, with one of the largest cloud migrations in the consumer products sector, moved 95% of its IT infrastructure to the cloud. Over and above the obvious benefits of what the cloud offers (a reduction in infrastructure spending, virtually zero downtime, and future-proofing the business), the seamless integration of systems saw them gain a performance improvement of between 20 and 30% in their critical business processes.
How To Modernize Legacy Systems For Future Readiness?
Modernizing legacy systems does come with its fair share of challenges like upfront costs, the complexity involved in the endeavor, and the potent risks of downtime if things don’t go as planned.
Being realistic, not every organization can afford to move to the cloud in one go, like how Unilever did. That said, there are strategic approaches you can consider to modernize your legacy systems bit by bit like a phased migration, where you can specific workloads to the cloud in phases without the fear of impacting your entire business operation.
Another possibility is a hybrid cloud model, where you can maintain certain critical applications on-premises while transitioning others to cloud-based solutions. Another effective approach is containerization, which packages applications with their dependencies into isolated environments named containers, which can then be run on a cloud platform as is.
How Can You Accelerate This Transformation?
There are several cloud-native approaches you can incorporate to speed up the transformation process of your legacy systems. Microservices is one approach that breaks down large applications into smaller, independent services. These can be developed faster and are easier to scale. Serverless computing is another way forward to divert time and resources that would have otherwise gone toward managing your servers into the migration process.
Adopting Continuous integration and continuous deployment (CI/CD) pipelines can further accelerate the modernization process. Simply put, implementing one or more of the above suggestions will not only accelerate your modernization process but will also put you in a better position to adopt technological advances as they come.
The Importance Of Strategic Alignment For A Successful Cloud Adoption
To be deemed a success, cloud adoption must be done in a manner that aligns with corporate objectives. For starters, your executive leadership must play a key role in designing a cloud strategy that reflects the specific objectives your company wants to achieve, whether it’s growth, innovation, or operational efficiency.
Strategic planning is critical in the phase to ensure that any cloud initiatives your organization undertakes actually drive tangible outcomes.
Navigating the Regulatory Landscape in Cloud Adoption
Another critical aspect of moving to the cloud you must beware of is the range of regulations that cloud services come under. The USA’s Federal Risk and Authorization Management Program (FedRAMP) and the ISO 27000 family of standards apply to most cloud-based operations.
Others are more industry or location-specific like the European Union’s General Data Protection Regulation (GDPR), which focuses on data security for any business entity operating in the EU, or the Health Insurance Portability and Accountability Act (HIPAA) that specifically regulates organizations that deal with Protected Health Information (PHI) in the USA.
Thanks to the capabilities of the cloud, you can seamlessly integrate “Compliance-as-a-service” solutions that automate compliance monitoring to help you meet these regulations.
How to Future-Proof Your Business Growth with Cloud Innovation?
Cloud innovations aren’t just about bringing down infrastructure and operation costs; it’s about laying the foundation upon which you can build a business that is future-ready. Here are a few considerations to help you do so:
- Design cloud architectures that can scale up alongside your business. Doing so will ensure that you don’t encounter technological or performance bottlenecks with increases in demand
- Follow the industry best practices when developing your cloud infrastructure. Implement infrastructure monitoring and redundancy systems to ensure that your systems are as resilient as they are scalable
- Stay abreast with market trends and technological advancements in the field to ensure you can leverage them to stay competitive
Finally, use the cloud for long-term business success. The cloud is a powerful enabler of sustained innovation and should not be looked upon as a stop-gap solution to stay relevant. Data is the new gold; leverage its capabilities like analytics and AI to drive your decisions in real time.
Wrapping It Up: The Path Forward For Executives
The capabilities that the cloud can offer to propel your business forward. The road map to migrate your business to the cloud is not complex: Work together with your key executives to develop a practical and comprehensive road map, invest in the right talent, and use a phased approach to do so to mitigate the possibility of any major hurdles.
Achieve this and you have placed yourself in a position where you can stay competitive and adopt the latest in technology as and when they become mainstream.
