Anyone who’s used a smartphone is familiar with the concept of the cloud. Businesses have been making use of cloud services for years, but as the benefits of cloud computing become more evident over time, companies across the spectrum are beginning to further reduce their owned-and-operated infrastructure and migrate fully to a cloud-based model.
Doing so comes with its challenges, and requires fundamental philosophical shifts that may be daunting, especially at the enterprise level. At the end of this transformational process, however, companies could find themselves better equipped to navigate an evolving competitive landscape while ultimately providing a higher standard of service to their customers.
Here, two experts explore the benefits and hurdles in pivoting to the cloud, and offer their perspective on the best strategies for approaching the change.
What’s driving the move to the cloud
There are numerous factors driving businesses toward the cloud, such as the resources needed to maintain data centers and their hardware. “Smart businesses realize the value of the maxim, ‘Don’t build what you can buy,’” says Mike Loukides, vice president of content strategy for O’Reilly Media, a technology learning platform. “The corollary of that is, ‘Don’t build anything that isn’t part of your core business proposition.’ So, companies ranging from small local businesses to large industries, even including some banks, have said, ‘In what way is building and maintaining a data center part of my core competency?’”
“The net is how to create an environment that can react to changes quickly and with assurance. And that was, in a lot of ways, not only the impetus for why we made this shift to the cloud, but the key to how we made the shift, too. It was about re-imagining how we could use technology to make what we do better and faster, so we could create more value for our customers.”
— ALLISON PERKEL
Answering this question has become easier with the rise of cloud service providers like Amazon Web Services, geared toward flattening the technical learning curve when it comes to enterprise-level cloud computing and allowing for the management of more significant operations. “We could manage our data at a much larger scale,” says Allison Perkel, vice president of engineering for Capital One. “We could take advantage of machine learning, proactive tooling and real-time infrastructure. Take your pick of personalized experiences, better safety, better precautions for our customers; there were lots of things in place that we could take advantage of.”
What it means to pivot to the cloud
How a pivot happens
A transition this significant doesn’t happen overnight. Once the decision is made to go all-in on the cloud, there are challenges companies face in making it happen, and it’s not just about sunsetting hardware and developing new tools; it’s also about re-examining everything from operating culture to talent acquisition to working methodology. “What does it mean for the CIO to have a budget for operating expenditure, but not capital expenditure?” Loukides asks. “The ongoing expense of cloud operations is also an issue. In fact, when asked about the most important initiatives their company was undertaking pertaining to public cloud adoption, 30% of all respondents of a recent cloud survey cited managing cost.”
Core tenets of tech operations philosophy also need to be reexamined. “You’re going to have points where you’re spending too much,” Perkel says. “You’re going to have points where this really great idea that your team is married to is done better by something else, and you should probably go buy that something else instead of building it yourself. And there are times when you build something that’s not quite what you want, and you’ve got to be OK to kill it.”
Once these internal challenges can be overcome, however, you’re left with an organization that’s more agile and able to build on core competencies. “Resist the temptation to rip everything out and start from scratch,” Loukides says. “Look at the parts of your software infrastructure that are most in need of replacement, and start there. But also look at how your business is changing and what the new opportunities are. Your business is going to change, and your investment in the cloud is going to make it easier to adapt to — and even to drive — those changes.”
Data Centers vs. The Cloud
Reaping the benefits of the cloud
While these challenges can be tricky to navigate, the brass ring that is a fully agile, cloud-competent business unit can be worth the effort. Questions of scale that may have once required entirely new infrastructure investments, for example, can be handled much more seamlessly. “If you release a new product that’s a hit and your load doubles, or if your load goes up by a factor of 10 or 100 at the start of the holiday season, your software can just execute an API call to your provider to allocate more computing power,” Loukides says. “It might not even have to do that; it might happen automatically.”
There are also financial benefits that come with the reduction of IT costs. While operating in the cloud comes with its share of expenses that range from paying for third-party tools and services to the cost increases that can come with scale, Loukides points out some correlative benefits: “You’re no longer filling data centers or machine rooms with hardware that’s going to be obsolete in a couple of years, or taking the time to provision it. I would bet that there’s a significant financial benefit to being able to think about your core business proposition and pushing all the other aspects of doing business to the side.”
There’s also a modular element to cloud management tools that allows IT organizations to operate with much more focus and attention to serving customer needs than if they were maintaining their own servers. Services can be swapped in and out or adjusted as needed in order to respond to a shifting technological or business environment. “All of a sudden, you have a whole host of tools that are literally at your fingertips. There’s a huge number of Amazon-specific ones. There’s a whole host of third-party pieces that go from infrastructure to service platform as a service, software as a service and functions as a service. So, a lot of that pre-work is done for you. You can spend more time on asking, ‘OK, how do I solve this problem?’” Loukides says.
Moving forward in the cloud
With more of these third-party tools and services emerging and making it easier for companies to manage their operations in the cloud, it’s a safe bet that more and more businesses will be looking to migrate in the future, especially given a business environment that increasingly rewards migration, thanks to external factors such as the COVID-19 pandemic. As they do, questions of scale, data management and future-proofing operations will become increasingly central to strategic development. Fortunately, crafting a cloud-centric structure and culture should enable companies to better navigate this transition.
“The way we utilize data and the way we’ve been utilizing our machine learning base and general innovation really allows us to respond very, very quickly, in real time,” Perkel says. “That’s one of the technological achievements of being all-in help. You’re seeing all of these pieces that we can bring forth to help make that experience better for our customers and continue to refine it and get them closer and closer to what they’re looking for.”
From Capital One:
For more on how enterprise can become cloud-powered, visit https://www.capitalone.com/tech/cloud/