As cloud adoption in APAC increases, which strategy works best?
- As different organizations have different approaches to the cloud, five archetypes represent the approach organizations take in their cloud adoption.
- 93% of companies are embracing a multi-cloud strategy
- The average company can connect to over 20 cloud services
Cloud adoption in the Asia Pacific region saw an increase in 2020. While there is no denying that the increase in cloud adoption was caused by the COVID-19 pandemic forcing businesses to operate remotely, many organizations were also in the midst of their cloud transformation journey.
Today, cloud services are at the essence of any business strategy looking to make the most out of their organization. From getting valuable data insights to enabling employees to work from anywhere, cloud adoption is becoming a strategic move to also deliver better results and services to customers.
Be it the flexibilities of the public cloud or the added security of the private cloud, businesses need to have a well-planned cloud adoption strategy as well to ensure they are making the right choices in their cloud journey.
According to The Future of Cloud in Asia Pacific report by Cisco and Boston Consulting Group (BCG), overall cloud spending is expected to reach US$200 billion in the region by 2024, with investment into the cloud growing at a compound annual growth rate of over 20% since 2018. Singapore is among the top three markets in the Asia Pacific with the largest overall IT spend across applications, platforms, infrastructure, and services. Across ASEAN, Indonesia, Malaysia, the Philippines, and Vietnam economies are expected to lead the pack in terms of cloud spending growth at a CAGR of 25% by 2024.
Interestingly, findings from the study also further revealed how organizations in the region are optimizing a mix of public, private, and hybrid cloud environments, based on their unique digital, operational, and business needs and several other factors. This includes regulatory concerns, risk appetite, geographical expansion, and data needs. Notably, the real challenge in today’s digital era is understanding how to manage this transition to the cloud in a smooth, seamless, and secure manner.
The five archetypes of the cloud journey
There are five archetypes of organizations derived from the report based on their cloudification journey. As different organizations have different approaches to the cloud, these five archetypes represent the approach organizations take in their cloud adoption.
- Digital Native: Cloud-native organizations have the cloud fully embedded in the business, which is primarily driven by digital and cloud-first strategies. Public cloud has always been the default choice for them, and through their cloud capabilities, they can respond swiftly to the dynamic business landscape with great agility.
- Cloud Optimizer: These organizations are at the forefront of digital transformation initiatives, having moved away from outdated legacy systems to the cloud. These companies were also able to adapt to remote working the fastest when the pandemic struck last year. They have mature cloud systems in place and typically take a public cloud-first approach.
- Cloud Pragmatist: While most organizations prefer the flexibility of the public cloud, regulations require them to take a more secure approach, especially if they’re dealing with sensitive data. Due to their priority in maintaining control over their data, risks, and costs, the public cloud is used to a limited extent for non-business critical workloads, while the private cloud is utilized as a strategic asset.
- Cautious Adopter: While large organizations can go all out in cloud adoption, smaller organizations may look towards a project-based approach to cloud adoption. Some large organizations that have leaders who have yet to fully understand and embrace the benefits of cloud offerings, also fall in this category.
- Cloud Onlooker: There are still organizations that do not currently consider the cloud as a strategic advantage for their business goals. Instead, they see it as another form of digital infrastructure. They have no active plans to adopt cloud in their business model and strategy, but leaders could introduce isolated cloud solutions if they believe that to be beneficial to the organization.
The rise of multi-cloud
Most organizations that understand the full potential of cloud services often opt for a hybrid cloud approach. They want to make the most of the flexibilities of the public cloud but also have the protection on-premises with the private cloud. More regulated industries are looking at the hybrid cloud as it allows them to have their data in the private cloud and build, run and test workloads in the public cloud.
The public cloud is often regarded as the cheaper option, especially for companies who want simplicity in managing cloud services as well. With its pay-as-you-use model, more businesses find the public cloud the best place to start. However, this has also led to more organizations considering using multiple public clouds for their workloads.
In fact, 93% of companies are embracing a multi-cloud strategy while the average company can connect to over 20 cloud services. But with a variety of cloud providers being used, won’t it be complicated for organizations to integrate applications, especially with applications already spread out on different clouds?
Cloud complexity can be solved
For Naveen Menon, President of ASEAN at Cisco, as complex as the use of multiple clouds for application sounds, integration tools kits are now being supplied for businesses using multiple cloud providers. For example, Cisco Intersight provides a portfolio of services that enable intelligent visualization, optimization, and orchestration to bring teams, tools, infrastructure, and apps together.
“Some of these key software points have been written in the last six months to two years but they are constantly evolving. They are key in terms of insertion into your organization so that you coordinate and orchestrate resources that sit on your premises and applications that sit on a public cloud provider or multiple public cloud providers.”
Having said that, Naveen did admit that it is still complicated because it’s like “rocket science” for engineers but it’s also been made easier for the technical teams and various corporations to implement software to manage these multiple cloud providers.
“There is no one-size-fits-all solution in the cloudification roadmap. Business and IT leaders need to be strategic and mindful when navigating the intricacies of cloud innovations and consider the benefits, challenges, and risks associated with each strategy in the mid-to-long term. As the focus shifts towards rebuilding better and emerging stronger in the next normal, cloud innovations will no doubt form an integral part of robust business continuity plans,” explained Prasanna Santhanam, Managing Director, and Partner, Singapore, BCG.
With cloud adoption gaining traction in the region, organizations also need to be sure they have a sufficient tech workforce to deal with this. Businesses also must ensure that cybersecurity is prioritized as they continue moving more workloads to the cloud and also expanding their cloud adoption.
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