What does Cloud really mean to enterprises or businesses?

While the cloud adoption in enterprises peaked in 2023, the question ‘What does Cloud really mean to businesses?” keeps surfacing in discussions, especially with senior stakeholders who still believe on-prem is sufficient to run their current services or workloads. Here in this article, I will take the opportunity to provide my point of view in simple ways.

Cloud saves costs when adopted right

“Does the Cloud really save costs?” is another question almost synonymous with the one in the title. There is no doubt that the Cloud saves IT costs in the majority of the cases. Many enterprises already experienced it when done right. Otherwise, Cloud would not become the de facto platform for developing and running workloads at many leading enterprises, public entities, and startups. We are at the moment with Cloud technology that enterprises cannot leave the Cloud just thinking it is not cost-efficient. Even to prove that right, you must do a detailed analysis of your case. Either way, you will be better off with the results.

Cost differentiation is no longer a standalone

In the current digital age, businesses cannot thrive for long focusing just on cost differentiation. It has to be in conjunction with value and experience delivered to the users. Value and experience are not static and they require continuous focus. It is not a great strategy to adopt Cloud just for cost efficiency. That mindset or line of thinking should change. Cloud brings many strategic and transformative propositions to your disposal, to note some

• Elasticity to manage scale in/out on the infra side
• Agility is required for businesses to thrive in the digital age
• Ability to innovate fast
• Keeping up with technology and industry practices (e.g. Security, Identity management, GDPR, etc.)
• Reach to partner ecosystem and their services and products

Enterprises need more time to focus on business

We are living in an era where speed and relevance are paramount to business success. With the evolving customer expectations and changing market dynamics, enterprises need more time to focus on business than before. One cannot focus or invest time in all dimensions, especially in IT (infrastructure, development, operations, etc.) where Cloud can offload most of such needs for enterprises.

The speed of change has changed

Traditional enterprise applications used to take a 6–18 month release cycle, with a lifespan of over 15 years. These cycles have become irrelevant to address the contemporary needs of the markets and changes in technology. Enterprises started addressing this by adopting agile development methodology. Cloud is one reliable technology that meets the needs of businesses for speed and agility with ease, and continues to evolve. Also from an innovation point, businesses need a ready technology platform to design and test their ideas quickly before going to the mainstream. Cloud is perfect for such needs and reduces the risks of failure.

Keeping up with technology and industry practices is not easy

With the wide adoption of the Cloud, lots of innovation happened keeping the Cloud at the center of the technology. The Cloud ecosystem has grown in a big way since the start of the Cloud. Enterprises cannot ignore these benefits and simply try developing these capabilities in-house. One good example is Generative AI. Just imagine the evolution of Generative AI without Cloud. I think it is next to impossible. Also, Generative AI through the cloud will have many tools and services that will ease and expedite its adoption. The adoption of IBM Watsonx is quicker with the Cloud while the on-prem model also exists. Similarly, the adoption of O365 will seamlessly enable the adoption of Copilot - the Generative AI offering from Microsoft, the adoption of the Google Gemini is quicker on cloud, and the list can go on. I believe it is safe to leave the field to experts to keep up with technology and use their services in the form of a cloud.

My view of the future state

• Enterprises will use both on-prem and cloud in tandem to run their workloads and keep migrating from one to another as the state of affairs demands it. This is similar to the hybrid working model that enterprises have adopted.
• Cloud adoption in enterprises will continue to exist as long as the differentiation keeps coming from it in the form of cost and value. In this regard, both multi and hybrid cloud models gain traction within enterprises.
• On-prem would continue to hold its presence for the data and services that require high levels of security, and the legacy workloads that cannot be migrated.
• Enterprises that prioritize cloud portability are the ones who thrive on the journey with ease.
• Balancing delivery speed and operational performance with user focus will be critical for enterprises. Automation, observability, and design thinking play vital roles in it.