The Future of the Cloud: Changing the Way We Work
To ensure that the growth potential of the cloud is tapped completely, vendors are taking measures to upgrade their existing businesses to cater to growing demand. Alibaba announced plans to invest $28 billion over the next three years in its cloud business segment. The investment also covers building next-generation data centers and developing related technologies including semiconductors and servers.
Microsoft reported a 775% spike in demand for cloud services during COVID-19. This led Microsoft to prioritize COVID-related workloads and place tighter caps on its free cloud service offerings for new users. The company stated that their 99.99% uptime availability target has not been maintained at all times and places through the outbreak.
SAP has been pushing its customers to shift to the S/4HANA platform, which isolates clients from such volatile situations. SAP extended support for previous version from 2025 to 2027, with a clause to extend support by three more years at a 2% additional charge. However, during the COVID outbreak, SAP provided clients with the additional incentive of supporting customer migration in a 100% off-site mode.
Where Is the Scope of Application?
Work from home is a crucial component impacting the adoption of cloud services and pushing businesses to improve the pace of their digital transformation. Desktop-as-a-service (DaaS) and Software-as-a-service (SaaS) are expected to maintain the highest growth within cloud-based solutions as companies shift to a work from home model and move away from legacy infrastructure operating models. For example, Tata Consultancy Services has already announced that 75% of its 4.5 million employees will work from home even post-COVID.
Enterprises will need to ensure that the selection of cloud vendors is done after proper evaluation with business considerations, including capabilities in different cloud-based independent software vendors and platforms, technical expertise in migrating tools and security, and the total cost including migration and support.
The crisis forced companies across sectors to shift quickly to a digital model. While sectors such as health care, IT, BFSI, finance, energy and utilities, and government agencies are bringing their data to the cloud to optimize services and improve operational outcomes, adoption in sectors such as transportation, logistics and manufacturing is relatively slower. Along with the increased adoption of cloud solutions, there are challenges for cloud service providers such as latency requirements, data security, privacy concerns, understanding app dependencies, assessing technical feasibility, assessing on-premise vs cloud costs and migration costs.
What Is the Future for This Market?
Major providers have come up with new product launches to enable an easier transition for their clients. Riverbed launched a cloud acceleration solution to help clients have a consistent experience over Microsoft collaboration and other video applications. Microsoft launched more than 10 solutions specifically in Europe and announced plans to invest more than $2.5 billion over the next few years to strengthen its cloud market share in the region. McAfee announced the launch of a cloud-based security services solution to enable improved protection for client data on the cloud.
There are many vendors providing new and updated solutions for their clients in order to enable a shift to the new work environment in an easy and efficient manner. These vendors have also adopted various growth strategies, such as partnerships and new service launches, to expand their presence further and broaden their customer base. The adoption of cloud services will continue to see a steady growth in 2020, though there might be a temporary stagnation in demand as companies try to realign and understand their financial position.
Companies will need to strategize how to restructure their business model for a post-COVID world, as investments into cloud-based solutions cannot be side-lined after the lockdown is over. There is no fixed formula that businesses will follow as requirements will vary depending on client base, country of operation, infrastructure levels and other factors. Most probably, a hybrid model with a significant focus on remote working employees could be the future. However, the turn of events is yet to be seen as the world continues to deal with the lockdown.
What’s Your Plan for Procurement and Supply Chain?
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