2021 predictions from Capgemini: The rise of cloud economics

2021 predictions from Capgemini: The rise of cloud economics Kees Birkhoff is group offer leader for cloud at Capgemini.

Research by Cloud Industry Forum (CIF) shows that the cloud has delivered results for over 90% of organisations during the past year, when tackling the challenges that COVID presented.

CIF also points out that over the past few months, digital transformation across a majority of enterprises sped up by 69% – with 91% of decision-makers stating that cloud formed an important part of this transformation, and 40% describing the role of the cloud as crucial.

But this growth does not stop at the end of 2020. More cloud adoption and digital transformation is expected in 2021. CIF says 88% of organisations expect cloud service adoption to increase in the next 12 months.  As this growth continues, we expect cloud technologies to enable organisations to operate with greater agility, resilience and adaptability compared to a few years ago. Naturally, this is good news, but where is the cloud heading in 2021? What are the trends to watch out for?

Cloud equals innovation, growth and agility

As we’ve seen from CIF’s research, cloud applications are driving the market and productivity. If businesses want to thrive and be effective, they cannot afford to go without cloud technologies. They must, therefore, explore how to integrate or evolve their usage of cloud applications.

Additionally, if firms haven’t already been disrupted by the technological impact that COVID has had on organisational productivity and technology usage, then they need to develop a proactive strategy that explores the use of cloud and how to transition away from legacy systems towards modern technologies. Failure to evolve and depend on legacy technologies will prove costly in the long-run.

For some organisations, this means redeveloping their technology infrastructure. They will have to modernise and consider re-platforming applications as they evolve too. Although this journey is complicated, organisational benefits will be immense and firms will likely experience greater innovation, growth and agility.

Cloud agnostic and multi-cloud strategies take centre stage

Many organisations will strive to avoid vendor lock in and want to become autonomous. Cloud agnostic strategies will therefore start to become prevalent. As a result, many leading technology vendors are starting to design solutions with interoperability in mind.

For the enterprise market, this autonomy is becoming a must-have design feature. Enterprise wants to know they have the option for seamless integration across technologies and applications within their infrastructure. Consequently, this is becoming somewhat of a de facto requirement across the market too. So we will see plenty of vendors collaborate and integrate their cloud services in efforts to make the most of this wider transition towards adopting a multi-cloud strategy.

Cloud native apps present the way forward

When adopting cloud technologies, many organisations have done so unsystematically. Instead of taking a strategic approach and developing a long-term transformation roadmap, many have chosen to implement the cloud tactically and to create quick-fix solutions for their technology implementation challenges. This approach is ill advised.

Further, against the backdrop of the pandemic, many organisations started to realise this and now seek more cloud functionality. Firms have also come to realise that native applications are key if they want to reap the full benefits from the cloud. Traditional “lift and shift” approaches are insufficient.

Therefore, during the coming months, we expect to see cloud native applications take center stage. Technologies will be purpose built for the cloud. They will enable agility across the technology stack and allow organisations to scale their operations, evolve and, ultimately, to continue to digitise.

The rise of cloud economics as a strategic approach

Through 2020, it’s clear the demand and deployment of cloud services exploded. While cloud saved the day for many, if organisations do not keep track of how it is managed and used, they might find themselves financially compromised with a whopping unexpected bill. This is because cloud’s pay-per-use model has led to immense deviation from original agreed budgets and is why a better strategic approach to cloud deployment and budgetary management is required.

Organisations will take an increasingly considered and analytical approach towards cloud adoption in 2021 as they decide what technologies should and should not live in the cloud too.  This strategic approach is commonly known as cloud economics. It uses a fiscal model to record and monitor cloud usage and expenditure, and comprises of a sophisticated analysis of the cloud applications used. This is joined up with the transformation of infrastructure to optimise cost and efficiency.

The cloud economics process is continuous and made of regular ongoing reviews. This enables organisations to track cloud usage through the fiscal year, so that adjustments can be made iteratively, to drive technology performance and organisational productivity long-term. Meaning, cloud economics assessments will form a crucial part of the natural enterprise vocabulary in 2021.

Photo by Micheile Henderson on Unsplash

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