The case for cloud
As businesses across the globe navigate the COVID-19 pandemic, there have been different stages in terms of how they need to react to keep their doors open. However, for companies to survive and even thrive in these difficult times, there’s no better place to be than in the cloud.
So said Dave Funnell, Cloud Provider manager at VMware, Sub-Saharan Africa, speaking during a webinar on the impact of COVID-19 on the cloud and managed services.
He said the impact of the pandemic on the cloud has generally been a positive one, but much of what is happening is simply reinforcing where organisations were moving already.
“Initially, the move to the cloud was about making companies more competitive, helping them react to new entrants into the market and deliver on the demands of their consumers.”
COVID-19 is simply accelerating this adoption, he said.
“We’re seeing stats where 87% of organisations are saying that their cloud adoption strategy is going to be accelerated because of the current situation for a variety of reasons. The first thing they had to do when COVID struck was around business continuity. In order to remain productive, they had to mobilise their workforce by buying laptops and increasing their bandwidth or connectivity. ”
As we move forward, it becomes more about cost optimisation, particularly for industries that have been severely affected by the pandemic.
“VMware’s partners that have been delivering cloud services – organisations in transportation, hospitality and the like – have been dramatically impacted; retail and manufacturing too, although slightly less. For telcos and media, the impact has probably been slightly positive, and when it comes to healthcare, we’re seeing a very high demand, but the aim of this cost optimisation is really around managing liquidity. In fact, 68% of organisations are going to be more tightly managing liquidity, which is cash flow.”
He said moving to a cloud-enabled business is about moving from a CAPEX model to an OPEX one. “We see that equipment spending is currently dropping anywhere between 5% and 10%. So after this brief burst at the start of the current crisis, we’re now we seeing a drop. If you want to get resources just in time, a cloud operating model is the key, and it is going to be the key as we go forward to create the future enterprise.”
Some will thrive
Funnell said while the market is going to be tough, some businesses will thrive. With most of the world going into a recession, with a 5% to 15% contraction in economies, this is where cloud can really assist businesses, enabling faster time to market for new applications, agility, as well as cost management and managing resources very tightly. “This was already happening. We were changing the types of applications that have been brought to market. In the past, we had three-tier application systems of record that we built our businesses on over the last 15 or 20 years. We've moved away from systems of record to systems of engagement.”
According to the IDC Spotlight, we're already in an era of exponential application growth, said Funnell.
“We’re moving from 300 million applications to nearly 800 million applications in production in the next five years. This is where business differentiation comes in, and this is the challenge for IT organisations – with potentially contracting budgets, moving to this OPEX model, the question becomes: how do you support those traditional applications, along with supporting and managing these new applications that your business is going to need to survive and to be agile? These types of applications are different, and require different responses.”
Businesses are looking for a different platform, one that will reduce costs, be more efficient, secure, reliable, and that provides the business with the control that it needs. “The new cloud-native apps are all about differentiation and innovation. How can you scale quickly and accelerate the time to market? For organisations to survive into this new tomorrow, they are going to have to adapt and will have to bring their products to market faster.”
This, said Funnell, is where VMware comes in. It makes sense to move these virtual machines (VMs) and apps into a private cloud that someone else can look after for you. Putting your legacy apps in the private cloud saves time and money, as they are being run by people with the skills to help you access and secure them, enabling you to focus on the development of next generation apps.
“Less staff time, far fewer costs, and then you can actually focus on that next gen application development and where you really want to take the business. Let someone else look after your legacy,” concluded Funnell.