Strong cloud momentum is not new: What’s different now is that organizations of all types realize that there is no single “default” cloud provider going forward.
Instead, they want the best cloud for each of their key workloads. If Cloud A is best for desktop productivity apps and Cloud B excels in server-based databases, Clouds A and B it will be.
As we head into 2023, most customers not only want to pick and choose their public clouds, but they also want deployment choice that means they can run some workloads on their own cloud infrastructure.
One easy prediction: The already huge market for cloud computing is still growing. In April 2022, Gartner estimated that total end-user spending on public cloud services worldwide will grow 20.4% this year to $494.7 billion, up from $410.9 billion in 2021. This year, that total is expected to hit nearly $600 billion.
The change now is that customers are demanding — and will get — choice. They — not the cloud providers — will be in the driver’s seat when it comes to where and how they deploy cloud.
For more on that and other key points, our top six IT predictions follow.
1: Multi-cloud is the new reality
Companies will adopt the best public clouds for each of their key workloads, and its adoption will grow throughout the next decade.
Even traditionally risk-averse industries like financial services are embracing the use of more than one cloud. Regulators have gotten in on the action.
To give their customers a robust online defense, cloud service providers have been investing in cybersecurity. This is important at a time when cyber risks are rising everywhere, including in the Philippines.
Phishing attacks, which deceive users into disclosing private information and business data, are among the most prevalent in the Philippines.
Virtually all large financial institutions now use more than one cloud when it comes to applications and infrastructure. And that need for multiple clouds will only grow.
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.
The two main messages in this category are: 1: customers need more than one cloud and 2: cloud providers must build bridges, not walls, between their services to ease multi-cloud adoption.
In short, customers want cloud providers to work well with each other in the name of true customer service and should explicitly query their current and potential cloud providers to make sure they will act as facilitators instead of roadblocks to multi-cloud.
2: Businesses clamor for deployment choice
The use of what we once called “hybrid,” now “distributed” cloud is also taking off. In the distributed cloud model, companies run some workloads on 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.
To be clear: Just because some tasks run “on premises” doesn’t mean they are not “cloudy.” Some, but not all, cloud providers are making their services available to run both on customer sites and in its public cloud with easy, inexpensive data flow in between when and if required.
Even customers running these cloud services on prem still benefit from pay-as-they-go pricing. NRI implemented a second OCI Dedicated Region at its Osaka data center earlier this year, following the successful adoption at its Tokyo data center.
Running on Oracle Cloud Infrastructure (OCI), the distributed cloud environment within NRI’s Tokyo and Osaka data centers allow the company to leverage the high-performance and flexible resources of OCI and maintain a high level of financial governance and availability that they require.
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.
3: Everyone wants Sovereign Cloud
It’s a good thing that modern cloud comes in more than one shape and size since many countries and regions now require clouds of their own.
Many of those countries have data sovereignty rules that mandate that data is stored and processed in-country, as opposed to being shipped off to the US or a city beyond their borders. The old model of putting one cloud data center in a region to serve multiple nations is becoming a relic.
A recent Forrester Research blog posts lists key requirements to qualify as a sovereign cloud provider operating in the EU, including that government or citizen data remain in country and that cloud infrastructure be run by citizens of that country. Cloud providers must be willing to show that they comply with all relevant local laws and security regulations.
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 clouds of choice can accommodate that key requirement.
Indeed, some Gen 1 cloud providers have yet to do more than issue press releases about their intentions to offer sovereign cloud.
In the meantime, sovereign clouds based on Oracle technology are already rolling out in some countries.
4: Organizations will adopt cloud-based HCM to mitigate effects of volatility
The 2020s are proving complicated for personnel management. Companies that accommodated a massive pandemic-sparked move to remote work and skills gaps created by the “Great Resignation,” now face waves of layoffs and workforce reinstatements thanks to a volatile economy.
These factors as well as demand for faster training in response to market changes, are all challenges that cloud-based HCM help companies navigate.
Flux is everywhere. Healthcare, hospitality, retail and other industries must hire, schedule, manage, and pay a soaring number of part-time or contract workers.
Many employees in those sectors cannot work from home, but neither are they tethered to a specific desk or office — think of nurses who must roam between exam rooms. Modern cloud-based HCM systems and associated applications manage and support these “deskless” workers optimally.
Similarly, businesses must continue to offer those who work remotely part- or full-time the same experience as those who are always on site. Demand for workplace flexibility will not subside with the pandemic.
Again, cloud-based HCM, equipped with AI, is a huge help. By automating common, time-consuming workloads, these systems make on-boarding 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.
The good news is that employees don’t mind working with AI, according to last year’s Oracle’s AI@Work global study. The research found that 82% of the more than 14,500 respondents felt robots can support their careers better than a person because robots offer unbiased recommendations.
AI can also help employees easily access training content they need, based on their current job, location, background, and career aspirations.
It’s not just about HCM, as important as that is. Business applications across the board must be more user friendly than in the past. By 2024, most legacy applications will get at least some modernization using cloud services according to IDC. The question is whether that is fast enough.
Embedding AI into these 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 of the data, potentially finding ways to save money or boost revenue.
Overall, 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.
5: Companies will democratize access and analytics of their data
Businesses already swim in data — about product sales, distribution, inventory, manufacturing… all their operations. But unused data is useless.
The pressure is on to make that data more accessible to more people. AI technologies like machine learning (ML) are thus 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 now how to build and test models.
This is crucial. For one thing, data scientists are scarce and thus expensive. For another, they often are less knowledgeable about the company’s core business than line-of-business managers.
If a department head can use human language to ask questions of data, that manager won’t have to wait for a data scientist or other specialist for answers.
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!
As Omdia chief analyst Brad Shimmin pointed out: “…the interesting thing about this push toward accessible, “democratized” data science is that it doesn’t just benefit the vast unwashed masses, that is your average business user.
Rather, it allows ML to flow into the nooks and crannies of the enterprise where it can be picked up by the right person at the right time in order to get something done.”
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.
6: Businesses need to lead on ESG
As concerns about the environment mount, consumers want to know how products and services are sourced, manufactured, and delivered.
And 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.
For example, 67% of the CXOs surveyed said their companies are using more sustainable materials and 66% said they are increasing energy efficiency.
But just 49% of the 2,000+ CXOs surveyed said they are developing new climate-friendly products and only 37% are tying senior executives’ compensation to environmental and sustainable performance.
Window dressing is not enough. Companies need to address supply chain to improve their financial wellbeing. Aside from the aforementioned 90% greenhouse gas stat, a company’s supply chain also generates between 50% to 70% of its operating costs, according to the EY Supply Chain Sustainability 2022 report.
This research notes that: “Beyond risk avoidance and compliance, organizations are seeking ways to create long-term value by embedding sustainability into supply chain operations.”
To address this profound challenge, businesses need a complete and always updated view of their inventories and 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 overall environmental impacts of their business.
Importantly, we must realize that no company is an island. Each must work in collaboration with its suppliers and other partners to forge an efficient and ethical supply chain.
In addition to its other benefits, the massive move to cloud computing can help with the climate. IDC has estimated that wide-spread cloud adoption could prevent the emission of more than 1 billion metric tons of carbon dioxide between 2021 and 2024.
The importance of real action on ESG cannot be overstated. For one thing, customers demand it. For another, governments are moving quickly to regulation to ensure that any given business put its money (and policies) where its mouth is when it comes to sustainability.
That’s the stick, now here’s the carrot:
Companies that finetune their supply chain and other operations through the use of the technologies mentioned above, 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.
To recap, moving into the mid-to late 2020s, buyers want technologies that will help them manage costs, grow revenue, and they want choice in how that technology is deployed.
Needless to say, they will prioritize cloud providers that facilitate, rather than hinder, how they want to run their cloud workloads.
The author is the managing director of Oracle Philippines