Traditional software giants are starting to kick it in the cloud — so what’s next?

(c) Noskowski

For years the benefits of the cloud have been the subject of much debate within the IT industry. In the past, sceptics claimed that the cloud wasn’t reliable or secure — although Gartner sought to dispel that myth. Now, the sceptics are harder to find and Gartner doesn’t have to dispel as many cloud myths. Our latest Businesses @ Work report shows that companies are not only enabling their employees to use their own apps and mobile devices at work, but are also utilising a range of cloud apps in order to boost connectivity with customers, contractors and partners via cloud-based portals. And 76% of IT decision-makers say digital initiatives will be very important or critical to their businesses in 2016.

And with Microsoft, Adobe, SAP and Oracle now adopting a cloud first approach, whether through internal development or via acquisition, it’s safe to say that the digital revolution is here. Look no further than Microsoft CEO Satya Nadella’s now famous first letter to employees, pledging that Microsoft would thrive in a cloud-first world. His big bet on cloud is paying off, as Microsoft Office 365 extended its lead as most popular cloud app this year, growing its customer base 116 per cent within Okta’s network.

SAP has also invested heavily in innovating the business, allocating $50 billion to driving digital transformation. The company is committing to a cloud-first strategy by allowing its customers to trade in on-premises software licenses in favour of new ones in the cloud, a move that 74 per cent of customers are saying has encouraged them to adopt cloud services. Our report confirms this, revealing that cloud application adoption for SAP grew 133 per cent in our network in 2015. This has enabled SAP to position itself as an industry leader and an agile partner to its customers.

The driving force behind cloud transformation

Why are the software giants investing in the cloud? Put simply, it’s because cloud is driving businesses forward and Microsoft, SAP and others want to drive their customers’ businesses forward.

Studies clearly indicate that cloud technologies allow companies to be more agile, improve cost efficiency, increase security and promote collaboration internally and externally with customers. The Exact 2015 SME Cloud Barometer report, an independent study of SME leaders across Europe and the US, found that companies embracing digital transformation are likely to grow faster and enjoy twice the profit of their non-cloud using rivals. Consequently, 47 per cent of SMEs now use at least one cloud business software tool.

Setting cloud security concerns straight

Another driving factor is security. In the past, the idea that cloud was less secure than on-prem was one of the main barriers to cloud adoption. Today, it’s clear that’s not the case. Reports from Ovum suggest that even large enterprises cannot replicate the security provided by the cloud using on-prem software. Attitudes in the industry are changing as well, as shown by a recent Cloud Security Alliance survey, whichrevealed that 65 per cent of IT leaders think the cloud is as or more secure than on-premises software.

Digital transformation starts with identity

IT leaders certainly aren’t afraid of cloud anymore. Our Businesses @ Work report shows 83 per cent of companies in our network are leveraging at least one off-the-shelf cloud app like Salesforce, Office 365 and Box. And 80 per cent of enterprises are building custom applications on their platforms. We’re now witnessing an unparalleled increase in cloud application usage globally. There are no signs of slowing as businesses continue to make efforts to enable their partners, customers and contractors to connect through cloud-based applications, websites or portals.

Now that organisations are beginning to embrace the cloud, what’s the next big hurdle? Figuring out how to manage identities. When every device and app that connects to the cloud has an individual account attached to it, the need for companies to ensure they can control the flow of data is amplified. Effective identity management can improve customer experience, maintain competiveness, generate new revenue and strengthen security. As the cloud drives traditional software companies to change their business models and put the needs of customers at the forefront, the next big priority for enterprises in the cloud is to make sure enterprises can easily and securely authenticate and manage users. 

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Rocky Wilder-Conrad-Banks
22 Jun 2016, 4:57 p.m.

Cloud adoption can be tricky in the UK mid range marketplace where you need to link several products/databases together, we are developing an all in one solution that takes a robust traditional cloud software (Pegasus Business Cloud), and offering an optmised cloud platform under one fixed monthly user price. Its not "true" cloud software but does offer the flexibility of the traditional Server >> Workstation environment along with the benefits of the cloud. A much simpler approach - take a look