Rethinking cloud strategies for the next era of digital transformation 

There is no question that the future of enterprises is in the cloud, with Australian businesses forecast to invest more than $20 billion in cloud computing technology by 2025.

In a pandemic-hastened move towards digital, the past two years have witnessed businesses jumping on the cloud services bandwagon in pursuit of greater efficiency, agility in reducing the time-to-market of business services, streamlined operational costs, and overall resource optimisation. 

The lure of the cloud 

Innovative uses of the cloud have enabled businesses and organisations to leverage emerging technologies like artificial intelligence and machine learning (AI/ML) to develop and launch industry-disruptive solutions at scale. For instance, cloud computing plays a critical role in digital twin technology by facilitating the storage and transmission of massive troves of data. Aside from storage alone, it opens the doors for the use of AI/ML technologies at the edge in virtualised environments that can be scaled as required. 

The use of digital twins across sectors ranging from urban planning, healthcare, and hospitality, to the energy and mining sector is anticipated to help save millions of dollars in resources while unlocking new frontiers. For example, the NSW Government recently announced the expansion of its Spatial Digital Twin to provide a 4D model for the entire state in an effort to boost productivity and create ease when planning and developing key infrastructure projects.

Nascent cloud adopters, too – particularly start-ups that lack resource capital or the technical know-how for complex applications of cloud technology – can reap significant cost savings in the long term with the right strategy in place. After all, with as-a-service offerings in the cloud, businesses have been promised a pay-only-what-you-consume model that leverages economies of scale to provision services at lower prices. Infrastructure maintenance fees are also eliminated, while businesses have the flexibility to scale up as required.

Yet, for all that cloud evangelists have banged on the cloud adoption drum – something appears to be running awry. In spite of the burgeoning investments being channelled into cloud solutions, Australian businesses are lagging behind in realising the full value of their investments in the cloud. 

Detecting and swerving common pitfalls

In a rush to realise all the benefits of the cloud, businesses have jumped in headfirst without formulating a holistic and thoughtful cloud strategy that looks beyond migration alone. While cloud migration is a great first step toward digital transformation, businesses must not neglect the reality that the cloud is a delivery model, not an end. Without adequate preparation, businesses may face bill shock – making cost savings with cloud adoption seem like a fallacy.

Businesses must understand that transitioning into the cloud is still a long-term investment and should mandate a rigorous decision-making process that considers future implications. For instance, complex pricing structures offered by some cloud vendors and varying terminologies make deciphering final costs more challenging. In particular, ingress and egress costs from data migration into and outside the cloud have been notorious for raising unforeseen expenses. Businesses would need to be prudent in selecting cloud providers that prioritise price predictability and transparency and offer pay-per-use pricing models.  

Businesses that go into cloud migration unprepared may also find themselves uncovering new, more complex and costly potholes, like security lapses from a lack of visibility across all IT environments. The Australian Cyber Security Centre reported a 13 per cent increase in cybercrime reports in the 2020-2021 financial year, compared to the previous year, equating to one attack every eight minutes. 

And perhaps most detrimental to the business is how its agility may be compromised with vendor lock-in that comes with integrating applications too tightly in the cloud within one vendor ecosystem alone, causing businesses to lose control over their IT stack and making it challenging to scale rapidly or diversify their use of the cloud. However, such scenarios can be easily averted by working with cloud providers that champion open standards and ensure reversibility and interoperability between multi-cloud environments. After all, cloud strategies should be crafted around businesses’ needs – not the reverse.

Charting the way forward for success

In the future, cloud reliance is anticipated to grow, spurred by the rise of the metaverse and Web 3.0. Businesses looking to grow must turn towards the cloud and formulate a holistic and resilient cloud strategy that accommodates market drivers and overall landscape and supports business goals. 

Aside from market drivers, selecting cloud providers that encourage an open ecosystem will also enable businesses to diversify and repatriate workloads to on-premise environments as needed. Ensuring successful cloud adoption in the long term will require foresight, and businesses will need to clearly understand how they expect the cloud to augment their services.

Ultimately, the bottom line remains central to successful cloud strategies. Without predictability of costs to be incurred, alongside the flexibility to scale as required, businesses may find themselves unable to optimise their cloud operations to get the highest return and truly enjoy the cost savings they were lured by. 

As the adage goes, cloud adoption is not a silver bullet to digital transformation. The cloud is ubiquitous and here to stay, but success will only be within reach for businesses with the right strategies. 

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