How cloud technology is disrupting traditional business models: Digital Transformation

Digital transformation is changing the world in unimaginable ways. Digital disruptors such as Uber, Ola, and Airbnb are transforming business models. Enterprises going for digital transformation are confused which technology to use. To compete with digital natives, also called born-in-the-cloud enterprises, businesses have to be flexible and agile.

From legacy systems to cloud-based ones

Big corporate houses are shifting to the cloud. Cloud Applications offer better functionalities and connectivity than legacy systems. Additionally, enterprises get the opportunity to access reliable and affordable technology as they compete to be cheaper, better and faster than others. The world is moving from private cloud to public cloud and now the trend is towards hybrid cloud — which is expanding exponentially.

According to a Bain & Company report “The Changing Faces of the Cloud,” cloud IT market revenue is expected to increase to $390 billion in 2020 from $180 billion, a compound annual growth rate (CAGR) of 17%. The report says cloud accounted for about 70% IT market growth in 2015. Also, 48 of 50 Fortune Global companies are going for cloud adoption for IT applications. The market is gaining momentum as businesses shift from legacy systems to cloud-based and pursue digital business strategy.

“There is not a single industry left untouched by cloud. This is the magnitude of digital disruption. An uncertain atmosphere hovers over traditional businesses. According to a study, 78% of US conventional enterprises feel threatened by digital transformation and 52% see declining business. About 48% are clueless. The digital innovators can change and adapt rapidly. This makes things difficult for enterprises,” said David Webster, President, Dell EMC, Asia Pacific and Japan, recently.

Delineating the Cloud dilemma for businesses

Hybrid cloud uses private as well as public for functions in an organization. Separate cloud infrastructure cab operate independently and communicate via encryption-based connections. Enterprises can also use technology for portability and applications. It helps an organization store sensitive data on private cloud whereas retaining advantages of public cloud for applications.

“Hybrid Cloud gives businesses best of both worlds. It delivers flexibility of private server and also confers advantages of public Cloud. It provides agility to small businesses as well as gives them a competitive edge,” said Shashank Dixit, CEO, Deskera.

What are the benefits of a hybrid cloud infrastructure?

Hybrid cloud ensures minimum data exposure as sensitive data doesn’t get exposed as it is not stored on a public cloud infrastructure. Besides an efficient cloud experience, the technology is affordable. It is scalable also, particularly optimum for small businesses like startups and SMEs.

Big corporations have capital intensive legacy systems, which are not profitable. With capital stuck in hardware systems that have to be replaced. There are maintenance costs involved making legacy operations even more unviable. This gives an edge to small business which don’t have any such baggage. Big companies can’t even abandon such investments.