Spurred by COVID-19 Cloud and Application Transformation Will Be a Long-Term Win for Businesses

Much of the world has been standing still during the COVID-19 lockdown, but a mass migration has been occurring in the world of technology. That is, organizations around the globe are moving more of their operations away from traditional IT architecture in favor of cloud-based platforms. Because, while the business case for cloud services has been well-established for years, the current environment of uncertainty and volatility is bringing the benefits of cloud into focus like never before.

The first few months of the pandemic drew a clear dividing line between progressive, technologically advanced companies and digital laggards. On one end of the spectrum, digital native companies have fared especially well. Their cloud-enabled flexibility and agility allowed them to adapt quickly when millions of employees were sent home to work, and consumers turned to online services to meet their every need. At the other end, more conventional organizations struggled. They found themselves tied down by finite legacy systems, unable to accommodate surges in usage, and slow to deploy new ways to meet customer needs.

Now, faced with an urgent need to adapt, many companies are fast-tracking their digital transformation plans and making cloud services a top priority. Indeed, there’s been a lot of analyst research that’s predicting the cloud market will grow rapidly for the next few years, at a time when many other sub-segments of IT services are languishing. As companies make the transition to the cloud, they’ll realize new capabilities that can see them through their current challenges and make them more prepared for whatever comes next.

Picking up speed
In any economic climate, businesses are always racing against each other, forever competing to seize the opportunity of the moment. And it’s no secret that technology — in its many forms — has helped companies get faster in nearly everything they do. Still, the COVID crisis has provided a stark reminder of why speed is so important to business success and how the cloud can help.

As the pandemic alarm grew louder, shrewd business leaders heard it as a starting gun. The race was on to see which organizations could make the sudden shift to remote working, prepare for an onslaught of customer demand, or adjust their business models to drive revenue in new ways. The stakes were high: business continuity, customer loyalty, and sustained revenue, (among other critical measures), hung in the balance.

Thanks to the elastic nature of cloud services, combined with Agile development and DevOps practices, companies using the cloud and cloud-native functionality were able to expand their existing footprint and support new requirements in far less time than those running legacy systems. Take, for example, the City of Austin, the Texas state capital and home to a million people. In a matter of weeks, NTT DATA worked with the city to develop a cloud-native, mobile-optimized application for citizens to schedule COVID-19 screening tests electronically. The application enables the city’s health authorities to securely trace anonymized positive results to assess testing demand and identify high-risk areas for a proactive response.

Staying flexible and resilient
Speed is critical, but the most successful organizations must also be able to slow down when appropriate, change direction gracefully, or otherwise handle any obstacle they encounter. Here, too, a cloud-optimized or cloud-native architecture offers big advantages over traditional systems.

Scalability is the key word. As opposed to a fixed allotment of company-owned equipment, infrastructure in the cloud means being able to instantly respond to rapidly fluctuating technology demands. Dial up capacity when demand spikes or dial it down when usage sinks. Such flexibility has been a lifesaver for healthcare providers as they’ve met exploding demand for telehealth services during the pandemic, for example. It’s also helped countless companies handle the huge increase in traffic over their corporate networks as employees began telecommuting en masse.

Cloud services are not just easier to expand or shrink; they’re also more amenable to change. Compared to on-premise architecture, cloud-based applications tend to be less intertwined, making it easier to introduce new functionality without unintended consequences somewhere else.

This ability to make swift course corrections and roll out improvements at a moment’s notice is a powerful advantage in any economic environment. And it makes companies especially well-equipped to cope with whatever daunting challenge may lay in wait.

Controlling costs
The speed and flexibility afforded by a cloud-based approach come with appealing financial implications, as well. The cloud allows companies to quickly fortify their IT capabilities without the massive capital expenditure required to buy and service new equipment. Instead, they essentially subscribe to a superior infrastructure, with the option to pay for as much or as little capacity as they need. This variable cost model preserves cash for other important business investments and reduces the risk of getting stuck with unused capacity when demand drops.

In the best of times, the cloud model removes some of the financial barriers to achieve explosive growth, expand into new markets, and fuel innovation. And in cases of extraordinary and unpredictable events like the COVID crisis, cloud-based companies can roll with the changes while mitigating the potentially devastating financial consequences.

Companies like Netflix, for example, have used cloud-based infrastructure to immediately contain the usage eruption that occurred as millions of people were quarantined at home. Meanwhile, companies for which business dried up — those in the corporate events space, for instance — could scale back into a state of near-hibernation without going bankrupt.

Making the most of it
A move to the cloud, while advisable for many organizations, should be approached with an understanding of its limitations. Achieving cloud transformation is rarely as simple as “lifting and shifting” the company’s current IT architecture. Older applications will need to be modernized to operate in a cloud environment, and infrastructure should be reconfigured to meet the organization’s needs of today, not 10 years ago.

Likewise, if companies are going to realize the highly touted benefits of the cloud, they must be prepared to take advantage of its powerful capabilities. Auto-scaling, for example, monitors usage needs and adjusts capacity to optimize service and costs automatically. Not using features like this would be akin to buying the latest smartphone and only using it for phone calls.

A timely upgrade with lasting impact
For IT personnel in most sizeable organizations, the case for moving to the cloud is a familiar one, and many companies are already using it in narrow, isolated cases. But there’s much more to be gained from a comprehensive commitment to cloud, including greater speed and agility, cost optimization, and the resiliency to weather the harshest storms. These are the big-picture strategic advantages that separate industry leaders from also-rans.

One positive long-term impact of the pandemic may be that it provided the spark companies needed to recognize cloud’s greatest strengths. And the actions they take in response will help them thrive for years to come.

Find out how NTT DATA is accelerating our clients’ journey to the cloud.

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