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July 2, 2021
By Chris Whaley
We’re at the start of a seismic shift away from viewing the value of cloud purely in terms of cost. Companies are beginning to view their cloud investment from the perspective of innovation, and this change is bringing a renewed sense of urgency to cloud adoption and strategy. Leaders in every industry are now pursuing aggressive transformations of their own. Cloud is no longer merely a matter of cost, it’s fundamental to your ability to compete and succeed.
The first wave of widespread cloud adoption ultimately was attributed to one driving force: cost savings. Organizations of almost all sizes, regardless of industry, began moving workloads to the cloud with the goal of reducing their spending on infrastructure and other technology needs.
This made sense: The potential for lower costs in the cloud is a bottom-line story that appeals to the CEO and CFO just as much as the CIO or CTO. Today, any company can access hyperscale compute, storage and other IT resources without a hyperscale budget. You only pay for what you use, when you use it, creating fewer idle resources and wasted capital expenditures.
This cost benefit remains a relevant cloud use case; more and more companies are getting out of the business of building and managing their own data centers. But cost reduction isn’t necessarily the main driver. Instead, organizations are turning to the cloud to be a catalyst for innovation and new revenue streams. To put it another way, cloud is now as much about the top line as it is the bottom line. Cloud is about far more than balancing the budget. It’s about creating tangible business value.
According to McKinsey, the cloud’s “trillion-dollar prize” is up for grabs, and 60% of future cloud spend will fall into an “innovate” category, including growth from new and enhanced use cases, accelerated product development and leveraging public cloud hyperscalability. In addition, many enterprises are looking to the cloud as a form of pioneering, adopting emerging technology by gaining experience in experimentation at low cost.
We see this shift occurring across industries, from health care to media and entertainment to retail and more. Take retail, for example: these businesses recognize the critical importance of being able to write great software as quickly as possible to engage their customers; they’re looking to leverage DevOps, continuous integration/continuous delivery (CI/CD) pipelines, automation and other tools and processes that have become synonymous with the cloud. They’re in a hypercompetitive sector where developer efficiency and the ability to deliver excellent customer experiences – both digital and physical – are table stakes. Modern data platforms and analytics are critical to their supply chains and ensuring their agility and efficiency. The cloud is the foundation for all of that.
Consider health care as another example: We’ve seen firsthand the benefit of leveraging cloud-based, application programming interface (API)-based tools (instead of legacy technologies) in transitioning from the Health Level Seven International (HL7) electronic health information interoperability systems to the Fast Healthcare Interoperability Resources (FHIR) standard and modernizing applications and analytics for payers and providers in the industry.
In media and entertainment, the cloud is having a transformative impact on content distribution, and content creators, broadcasters and streaming networks are modernizing their revenue streams and operations as a result.
And the list goes on: financial services, food and beverage, insurance and so forth. As businesses in these and other industries shift their cloud strategies from cost reduction to revenue generation, we see a corresponding transformation in how partners meet their customers’ cloud needs.
Speed is the common denominator underpinning these use cases, yet the cloud learning curve …
… remains steep for many organizations. That curve slows companies down and hampers their competitiveness in the short- and long-term.
We see a growing need for a cloud partner that can offer industry-specific use cases that rapidly deliver predictable, high-value business impact. That requires experience in industries like those I mentioned above; what works well for one health care provider will very likely work well for another. So there’s an opportunity to deliver prebuilt, repeatable cloud solutions that do exactly that: help customers generate significant business value much faster than if they took a DIY approach.
Let’s unpack this overarching value to companies in different industries in more specific terms. Taking this approach offers four major benefits:
Getting to market faster. By leveraging repeatable, industry-specific reference architectures for cloud, customers get to market faster with their transformation projects. You can put a dollar figure on the value of that speed and agility, especially when you shave months (if not years) off your time to market.
Relying on the skills and experience of a true partner. A good cloud partner can say: “We’ve done this work before, and we can do it for you.” They’re a co-creator, a true business partner that helps drive their client’s goals by assessing their needs and applying their cloud experience in that particular industry. Repeatable cloud patterns are a tangible manifestation of that experience.
Protect existing revenue streams while building new ones. One of the biggest challenges for companies during a modernization or transformation initiative is to ensure that business as usual isn’t disrupted while it works aggressively to attain its new business goals. This is another area where a reliable, experienced cloud partner can make a difference. By tapping into prebuilt reference architectures, organizations streamline a lot of the heavy lifting required to pursue new business opportunities while protecting their existing operations.
Ensuring compliance, governance, and security. Mission-critical requirements around compliance, governance and security sometimes act as obstacles to cloud-driven innovation, but this shouldn’t be the case. A modern cloud partner helps companies innovate in the cloud in a compliant, secure manner; repeatable use cases and expertise also are important on this front, given that so many regulatory requirements are industry specific.
This shift to find cloud partners with deep, industry-specific experience also carries a sense of urgency. The ability to innovate, continuously deliver and embed compliance, governance and security in products and solutions is now a requirement for enterprises to effectively compete in their respective industry and grow revenue and market share in the digital future. Those firms that aggressively adopt a culture of experimentation and innovation using cloud features and services will ultimately be the market leaders in their respective industries. Finding a trusted cloud partner with relevant industry expertise that shares that same commitment is just as important.
Chris Whaley is executive vice president of cloud solutions sales at 2nd Watch. He has 20-plus years of experience in business development, consulting, integration solutions and operations. You may follow him on LinkedIn or @2ndwatch on Twitter.
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