Sponsored Content by Capital One

Why pivoting to the cloud is a smart move for business

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.”



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/

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo