Between a cloud and a hard place: companies change applications tack
The Covid-19 pandemic crisis has intensified and sped up the migration of business applications to the cloud
The Covid-19 pandemic has accelerated a trend. While cloud adoption was already on the rise, quick decision-making and a change in working patterns is forcing new thinking on application management.
“We were humbled by the accelerated adoption of the Zoom platform around the globe in Q1,” said Eric Yuan, founder and CEO of Zoom during the company’s first quarter financials announcement in early June 2020.
With 169% growth in revenue compared with the first quarter of 2019, the video-conferencing firm saw its profit climb to £27m.
But Zoom hasn’t been the only beneficiary of the Covid-19 pandemic lockdown. Microsoft’s CEO Satya Nadella recently revealed that the company’s Teams software now has 75 million daily active users, a jump of 70%.
While communication and collaboration apps have certainly seen a significant rise in popularity, cloud apps as a whole have taken a giant leap forward in terms of how organisations are now seeing the future.
Where there was perhaps some reticence towards a cloud-based computing strategy, the pandemic has built confidence and a realisation that organisations need to be more agile and more flexible.
The workforce has dramatically changed in how it can operate and, if anything, this has accelerated a trend that was already well on its way to becoming the norm. As Damian Penney, vice-president of Europe at video telematics and fleet management firm Lytx, says: “We have had a cloud strategy for some time now and the recent enforced changes to working have not really affected us as a business.”
While Lytx uses a host of cloud solutions including Workday, Salesforce, ServiceNow and training tool MindTickle, it also uses Okta for authentication, and this is where Penney suggests it may be a cultural challenge for teams relatively new to cloud-based apps.
“You need a robust security platform with multiple layers of authentication and this could initially be painful for employees who are more used to a “hard-wired solution”, he says, adding: “It will require teams to adapt to additional login steps, but the benefits to enable a mobile workforce completely outweigh any initial challenges.”
Many organisations will be in the same boat as Lytx, enjoying the fruits of an already established cloud apps strategy, but many won’t. For some organisations, this will be new territory, and the pandemic has been an awakening in many ways.
“The Covid-19 pandemic has demonstrated the core strengths and benefits of cloud computing, as organisations had to rapidly adopt home working and schools with online classes during the global lock-down,” says Selina Yuan, president of international business at Alibaba Cloud Intelligence.
“Those organisations that had already widely adopted cloud infrastructure and software-as-a-service [SaaS] applications were able to respond relatively easily, taking full advantage of the unique scalability of cloud technologies. For others, there has been an uncomfortable realisation that cloud provides not only competitive advantages, but also business security.”
So, what are businesses looking for? According to Yuan, it’s primarily tools to accelerate digital transformations towards increased flexible working and integration of services, replacing old processes and legacy technologies to save costs and improve performance and security.
“We’re seeing a growing demand for solutions that ensure efficient development, deployment and management of applications. For example, many customers are keen on leveraging cloud container services to develop applications faster and cheaper while accessing new, innovative technologies,” Yuan adds.
The need for speed
This idea of cloud for speed is an interesting one, certainly for many large organisations that have surprised themselves in the past few months with their ability to make quick decisions.
Crises tend to shine a light on organisational inefficiencies, and has history has shown that those that don’t adapt quickly will struggle and cease to exist in challenging economies.
So, for many of these large organisations that have reacted quickly to the challenges of lockdown, maintaining that notion of agility and ensuring business continuity will be more difficult without embracing wider, more in-depth change.
As Gartner’s report, When cloud meets Covid-19, opportunities and threats emerge, states: “Most corporate networks are not prepared for the onslaught of remote work being driven by Covid-19. While companies have spent money to build out their existing capacity to handle remote work, few have come close to provisioning capacity many times their established norms.
“Customers’ concerns about performance problems that are building due to the increased load of remote workers are not initially focused on the hyperscale cloud providers. Instead, customers are noting slowdowns in connections and bandwidth limitations in their normal workplace and collaboration applications.”
So, what are CIOs looking for? What is the plan post-Covid? For Dominic Maidment, technology architect at energy firm Total Gas and Power, workloads now have to have more serious continuity and availability, as CIOs are looking at continuity and workforce enablement, to remove the risk associated with traditional datacentre centric deployments.
“The pain of not being able to access resources, data assets or orchestrate applications is driving expectations that not only is anything available anywhere, but its natively protected and scaled,” says Maidment.
“This means that application workloads not only have to be in environments where they can scale, but also connect automatically to APIs [application programming interfaces] on the edge, where their analytics or data lives.”
The problem, he adds, is that the inequalities of legacy applications are revealing themselves over virtual private network (VPN) links from user homes, much to the chagrin of business users. However, it is consumerisation of technology that will continue to drive change in the corporate environment, even more so now that people are working from home more.
The case for ERP
Key to this change is enterprise resource planning (ERP). Many legacy ERP systems can be prohibitive, adding complexity to digital transformation projects and, therefore, in many cases slowing progress.
According to recent research by Boomi of 825 Europe, Middle Easter and Africa-based (EMEA-based) enterprises, 41% believe that the IT landscape is getting too complex to manage and that “migration exhaustion” is stopping 42% of businesses from modernising.
While 75% are already migrating infrastructure, 68% are migrating applications to the cloud. Over half of these companies (52%) cite customer service improvements as a key driving factor, while 47% cited application integration, and 40% to prioritise IT agility.
Sheila FitzGibbon, Global Marine Group
Cloud migration of ERP has cost benefits too, realised through reduced maintenance and bodies needed to keep the lights on, as well as the increased speed and efficiency of operations. Post-Covid, businesses may also throw reduced estates into the mix, especially if the so-called “new normal” will see continued remote working on a large scale.
Sheila FitzGibbon, senior project manager at offshore engineering firm Global Marine Group, says modernising its ERP has been central to its digital transformation. An IFS customer, Global Marine Group has adopted IFS’s ERP modular software, including managed cloud, to integrate business processes into a single system running on a central database.
“Through this approach, in the next 12-18 months we can retire legacy solutions and integrate the whole group, providing a single version of the truth, with automated processes, on an evergreen platform,” says FitzGibbon.
“One area where efficiencies will be realised will be in the procure to pay [P2P] process. With the use of mobile technology, the bottleneck of receipting will be addressed, the management of stock in remote locations facilitated, and ease of requisitioning while on site will be made viable. This automation of accounts payable will save money and time, and minimise human error.”
While the cloud is not the panacea for all computing constraints, it’s having its moment in the sun. The pandemic has forced organisations to make a decision and deploy apps that enable remote collaboration and communication. Cloud storage is increasing. Departments such as human resources (HR) and finance are having to adapt and adopt new methodologies and tools.
But the rush to deploy remote services could also have created a problem of complexity. Too many tools, escalating cloud expenditure and cultural confusion, could undermine the very reason for committing to the cloud in the first place.
According to research by Thales, security is another concern. The report painted an interesting picture of cloud reliability and vulnerability. With 46% of all European company data stored in the cloud and only half (54%) of cloud-based sensitive data secured by encryption, there is concern that rapid deployment of cloud tools could leave organisations exposed to threats.
This is exacerbated by complexity. The research suggests that four out of five companies have two or more infrastructure-as-a-service (IaaS) or platform-as-a-service (PaaS) providers, while the vast majority (86%) have more than 11 SaaS providers, and a third have more than 50.
As we enter into a period of economic uncertainty, how organisations manage this complexity to reduce costs and reduce risk will be key to their agility and competitiveness in the next few years.
As Dom Poloniecki, Nutanix’s general manager for Western Europe and Sub-Saharan Africa says, the art will be in the co-existence and balance of managing both public and private cloud strategies – but, he adds, public cloud is having a resurgence.
“The pandemic has seen an acceleration to cloud migrations and I was interested to see IDC’s prediction that although IT infrastructure sales will retract by 16.4% year on year, public cloud will grow by 13.2% and private cloud by 6.9%,” he says.
“That’s a pretty clear indicator of the direction of travel and it says that when you need optimal flexibility, low capex [capital expenditure] and remote access to IT services, public cloud is your likely vehicle.”
Far from throwing a spanner into the works, the Covid-19 pandemic has forced the hand of organisations towards the cloud, and there’s probably no going back now. As businesses emerge from lockdowns and try to work out their future structures, what is almost certain is that the cloud and cloud apps are now penned onto the teamsheet.
Read more about cloud applications
- What is a cloud application?
- Microservices: How to prepare next-generation cloud applications.
- Senior Oracle executives express confidence in putative cloud-based competitive advantage against SAP and other rivals before and during 2020 London Open World conference.