The cloud journey can no longer be a one-cloud-fits-all
The journey to the cloud has been a rather complex one for most organizations over the last few years. While many had already been slowly moving small parts of their business processes to the cloud, the COVID-19 pandemic accelerated the cloud journey for almost all organizations.
For most businesses, using the cloud was no longer an option but a necessity. Data point from Gartner® estimated that total end-user spending on public cloud services worldwide will grow 20.4% in 2022 to US$494.7 billion, up from US$410.9 billion in 2021. In 2023, that total is expected to hit nearly US$600 billion.
However, with rapid cloud adoption, another problem was soon brewing. Businesses were trying to figure out how could they now make the most out of their cloud investments. While organizations mostly started with a single cloud provider, they now find themselves having multiple clouds to deal with, bringing complexity to their workloads.
According to Fitri Abdullah, Managing Director for Oracle Malaysia, organizations of all types now realize that there is no single “default” cloud provider going forward. Instead, customers want a choice of the best cloud for each of their different key workloads.
“Most customers not only want to pick and select their public clouds, but they also want differing deployment choices allowing them to run some workloads on their own cloud infrastructure. The change now is that customers are demanding—and wants—choice. They, not the cloud providers, will be in the driver’s seat when it comes to where and how they deploy cloud,” stated Abdullah.
As such, Abdullah shares six key points that will shape the cloud journey for organizations in 2023.
Firstly, multi-cloud will be the new reality as companies will adopt the best public clouds for each of their key workloads, and its adoption will grow throughout the next decade. In Malaysia, virtually all large financial institutions now use more than one cloud when it comes to applications and infrastructure. That need for multiple clouds will only grow.
Abdullah also pointed out that some cloud providers are facilitating this trend by locating their respective cloud facilities close together to minimize latency. That ensures that customers using services from both providers get fast response times.
One example is ManagePay Systems Berhad (MPay), The Malaysian fintech and payment solution enterprise is utilizing Oracle Cloud Infrastructure (OCI) to build a reliable and scalable platform that enables Malaysia’s small businesses to trade online. iStore iSend, a Malaysian holistic end-to-end e-fulfilment company also selected OCI as its preferred cloud infrastructure provider to ride the soaring e-commerce wave in the region and help reduce operational costs.
Secondly, businesses will clamor for deployment choices in 2023. Abdullah stated that the use of what once was called “hybrid,” is now “distributed” cloud and is taking off. In the distributed cloud model, companies run some workloads outside public clouds and others in company-controlled data centers. This is typically done for compliance, regulatory, performance, or other reasons.
“This mix-and-matching is great for companies that must keep some corporate and/or customer data segregated but also be able to “burst” analytics or other resource-intensive workloads up into a public cloud as needed. This is tricky since organizations must carefully balance technology deployed across on-premises, private, and public cloud infrastructure,” explained Abdullah.
AIA Malaysia, for example, is continuing to rely on Oracle Exadata Cloud@Customer to run its businesses and help adapt to unpredictable business environments. It selected Exadata, the world’s fastest database platform, to run business-critical workloads, including core banking systems and IT infrastructure.
“No one should confuse a cohesive multi-cloud and hybrid strategy now required with the sort of free-for-all that kicked off the early days of cloud computing. Back then departments–even individuals–inside companies launched cloud services willy-nilly, often without the permission, or even knowledge, of IT. Today’s distributed cloud scenarios must be carefully designed to ensure interoperability and good governance from their inception. The takeaway is that cloud providers must meet business and government customers where they are instead of pushing for all data and applications to be forklifted into a specific provider’s cloud,” added Abdullah.
A sovereign cloud journey with HCM capabilities.
Next is the sovereign cloud. With the old model of putting one cloud data center in a region to serve multiple nations becoming a relic, businesses must realize that failure to comply with data sovereignty rules can lead to significant fines — potentially hundreds of millions of dollars — not to mention incalculable brand damage.
“Countries and localities that must keep data in specified geographies should make sure their cloud of choice can accommodate that key requirement. Indeed some Gen 1 cloud providers have yet to do more than issue announcements about their intentions to offer sovereign cloud,” said Abdullah.
The next point is that organizations will adopt cloud-based HCM to mitigate the effects of volatility. For Abdullah, cloud-based HCM, equipped with AI, is a huge help for organizations. By automating common, time-consuming workloads, these systems make onboarding new hires faster and easier.
“AI-enabled digital assistants collect data from employees and then interpret and answer questions using natural language processing (NLP). These chatbots expedite common tasks, minimizing calls and email to HR pros. Even better, the assistants remain useful throughout employee tenure by guiding people through equipment requisitions, expense reporting, and other tasks,” said Abdullah.
In fact, embedding AI into applications makes people more efficient: an employee who spends three hours less per week keying in data, for example, has three hours to ask questions about the data, potentially finding ways to save money or boost revenue. Overall, Abdullah believes smart use of technology for HCM helps businesses boost productivity; lower administrative costs; better manage staff levels; and improve talent retention–all table stakes for trying times.
PETRONAS is one such company that is benefitting from this having embarked on a global HR transformation program in 2019. The company decided to move to a more modern, scalable cloud system to meet its growing business needs, and hence it chose to partner with Oracle and deploy Oracle Cloud HCM which went live successfully in November 2021.
Democratizing data and ESG can influence cloud investments.
The fifth point is about democratizing access and analytics of data. AI technologies like machine learning (ML) are already being embedded into corporate systems to lay the groundwork for this data democratization. To further this push, companies must deploy “augmented analytics” to make data understandable to “mere mortals,” i.e., business people and not just data scientists who know how to build and test models.
“Perhaps even better are scenarios where ML-fueled analytics push relevant reports or alerts to managers based on past queries, the manager’s job function, and other factors. How nice to get the proof point you need before you even ask for it!” he added.
Fast analysis and access to pertinent data can drastically improve performance in applications ranging from Formula 1 automobile and SailGP sailboat racing to fraud detection, the need for real-time data access will be another key driver going forward.
Lastly, ESG will be a key factor for organizations. Consumers want to know how products and services are sourced, manufactured, and delivered, while an increasing number want to do business with companies with strong environmental social and governance (ESG) values. Smart companies are taking up the challenge with action, not mere lip service.
Research shows that the entire supply chain must be considered in calculating a company’s impact on the environment as an estimated 90% of a company’s greenhouse emissions emanate from its supply chain.
Unsurprisingly, companies across sectors say they do all they can to ensure that their sourcing, manufacturing, and distribution practices are sustainable over time. But in reality, many are just scratching the surface. In its Deloitte 2022 CXO Sustainability Report, the consulting firm found that more than one-third of organizations are implementing just one of five “needle-moving” sustainability actions.
To address this profound challenge, businesses need a complete and constantly updated view of their inventories as well as that of their suppliers and distribution partners And, as noted above, they need world-class analytics to parse this data. Armed with these tools they are better able to start sourcing and manufacturing products closer to buyers thereby minimizing mileage and fuel costs of shipping. They can also better optimize warehousing to predict or even prevent shortages and finetune supply chain planning to cut the overall environmental impacts of their business.
“Importantly, we must realize that no company is an island. Each must work in concert with its suppliers and other partners to forge an efficient and ethical supply chain. Companies that finetune their supply chain and other operations through the use the technologies, can truthfully claim to have minimized their negative impact on the planet and can affix that reputation to their brand. And environmentally concerned consumers will take notice,” concluded Abdullah.
With that said, the cloud journey for organizations can be made much simpler and less complicated if businesses were to understand how they can best make their cloud investments. These six points indicate the demands of the industry that businesses would most likely look into when it comes to their cloud journey and expansion in 2023.
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