Accenture: Top 5 elements to capture value from cloud
In a business climate of uncertainty, shaped by the COVID-19 pandemic, more than 90% of enterprises have now adopted cloud technology in a bid to be more agile but many are failing to maximise value, according to a new report from Accenture.
“Everyone knows the cloud is the place to be: It has offered greater flexibility, more agility and new opportunities for innovation,” comments Accenture who have outlined five essential elements for business to capture the full value of their cloud technology.
Despite the high number of enterprises migrating to cloud, many have stalled and fail to achieve the value expected from their initiatives, claims Accenture’s report, Cloud’s the urgent imperative: Maximise its value.
Stuck in experimental mindset
“Some organisations got stuck in an experimental mindset without a sense of where their cloud journey was headed. Others struggled to make a clear business case for scaling up their use of cloud,” comments Accenture.
The result? “Most enterprises have, on average, only about 20-40% of their workloads in the cloud, most of which are the easier, less complex ones. And nearly two-thirds have said they haven’t achieved the results expected of their cloud initiatives to date.”
For many companies, the pandemic also exposed pre-existing weaknesses in their models and systems. According to research, conducted by Accenture before the pandemic, only the top 10% of companies had mastered systems resilience.
“It’s imperative that the companies that went into the crisis with significant gaps embrace the promise of cloud now to enable short- and long-term change. If they do, they can mitigate business risk, maximise human potential, enable business transformation and emerge stronger, able to change and thrive despite ongoing uncertainty,” says the report.
Thoughtful migration to the cloud
According to Accenture an intelligent cloud journey should be a balance of business drivers, technology needs and industry dynamics. “There is no one-size-fits-all approach,” comments Accenture.
“Your cloud initiative should start with defining the business value that this technology transformation can enable: identify where impact will be derived fastest across the business through new capabilities, cost efficiencies, or risk mitigation.”
Success in the use of cloud can go beyond technology says the report as this way of working looks set to change organisational structures, business models and human performance.
“With the value identified, you can then map out the journey and determine how cloud will enable the overall business strategy and ambition,” said Accenture who lay out the five essential elements to capturing the full value of cloud:
- Migrate and scale up
Get your workloads to cloud rapidly, securely and with confidence by selecting the right infrastructure for your business needs.
- Get the most from the hyperscalers
Apply the innovations and investments from the big cloud providers to create value for your business.
- Modernise and accelerate
Ramp up your organisational speed and agility by restructuring architectures, applications and data for cloud.
- Innovate and grow
Use cloud as a digital transformation lever to create greater differentiation and competitiveness in your industry.
- Run and optimise
Adopt new ways of operating that push your cloud estate to ever higher levels of business performance and sustainability.
“We’re now at an inflection point for scaling cloud adoption and maximising its value across five essential elements: migration, hyperscaler integration, modernization, management and innovation,” says Accenture.
“Cloud has proven its centrality to resilient, sustainable enterprise operations and future competitive advantage. If you’re not substantially on the cloud, you can’t hope to unlock the capabilities a modern business requires - greater flexibility, more agility and new opportunities for innovation to help you disrupt your industry.
“Enterprises that continue to delay a shift to cloud at scale aren’t just incurring an opportunity cost, they’re risking their very survival.”
Why Alibaba Cloud is doubling down in Southeast Asia
Alibaba has announced expansion of its cloud business within Southeast Asia, with the introduction of a digital upskilling programme for locals alongside acceleration of its data centre openings.
This doubling down of its cloud business in Southeast Asia comes as the company faces stiff competition at home in China from rivals including Pinduoduo Inc and Tencent and seeks to up its game in a region considered to be the fastest-growing in cloud adoption to compete with leading global cloud providers AWS, Google and Microsoft.
Alibaba Cloud, the cloud computing arm of Chinese e-commerce giant Alibaba and second biggest revenue driver after its core e-commerce business, finally turned profitable for the first time in the December 2020 following 11 years of operation, thanks largely to the pandemic which has spurred businesses and consumers to get online.
Southeast Asia growing demand for cloud
In 2020, there was a noticeable increase in interest towards cloud in SE Asia, with the population embracing digital transformation during the pandemic and SMEs across the region showing increased demand for cloud computing.
Such demand has led to the expectation that Southeast Asia is now the fastest-growing adopter of cloud computing with the cloud market expected to reach US$40.32bn in Southeast Asia by 2025 according to IDC.
And there are plenty of players vying for a slice of the cloud pie. While AWS, the cloud arm of Amazon, is the leading player in Southeast Asia (and across all of APAC apart from China), Microsoft and Google are the next two most dominant players in Southeast Asia with Alibaba coming in fourth.
“There is no doubt that during the past year we have seen the acceleration of digital transformation efforts across all industries,” explains Ahmed Mazhari, President, Microsoft Asia. “Asia now accounts for 60% of the world’s growth and is leading the global recovery with the digitalization of business models and economies. Cloud will continue to be a core foundation empowering the realization of Asia’s ambitions, enabling co-innovation across industries, government and community, to drive inclusive societal progress.”
Alibaba’s commitment to Southeast Asia
At its annual Alibaba Cloud Summit, the Chinese company announced Project AsiaForward, an initiative designed to upskill local developers, small-to-medium-sized companies and connect businesses with venture capital. Alibaba said it would set aside US$1bn over the next three years to develop digital skills in the region, with the aim of helping to develop 100,000 developers and to help grow 100,000 tech startups.
But that’s not all. The company, which recently opened its third data centre in Indonesia, serving customers with offerings across database, security, network, machine learning and data analytics services, also announced it would unveil its first data centre in the Philippines by the end of 2021.
Furthermore, that it would establish its first international innovation centre, located in Malaysia, offering a one-stop shop platform for Malaysian SMEs, startups and developers to innovate in emerging technologies.
“We are seeing a strong demand for cloud-native technologies in emerging verticals across the region, from e-commerce and logistics platforms to FinTech and online entertainment. As the leading cloud service provider and trusted partner in APAC, we are committed to bettering the region’s cloud ecosystem and enhancing its digital infrastructure,” says Jeff Zhang, President, Alibaba Cloud Intelligence.
What other cloud providers are pledging in the region
This pledge by Alibaba to upskill both individuals and businesses follows Microsoft’s announcement in April that it was planning to upskill Malaysia’s population and would invest US$1bn over the next five years to build a new data centre centre in Malaysia.
This is the latest in a long line of pledges to the region by the US tech giant, which is fast accelerating the growth of its cloud datacenter footprint in Asia, expanding form seven 11 markets, and recently adding three new markets across Asia – Malaysia, Indonesia and Taiwan. Back in February, it announced plans to establish its first datacenter region in Indonesia and to skill an additional 3 million Indonesians to achieve its goal of empowering over 24 million Indonesians by the end of 2021.
And recent research by IDC shows that Microsoft’s most recent datacenter expansions in Malaysia, Indonesia and Taiwan alone are set to generate more than US$21bn in new revenues and will create 100,000 new jobs in the next four years.
Also last month, Tencent announced it has launched internet data centres in Bangkok, Hong Kong, Tokyo to add to its second availability zone opened in Korea last year and plans to add an internet data center in Indonesia, and Google has also been pushing into the enterprise space in Southeast Asia for several years now.
Expanding data centers allows cloud providers to boost their capacity in certain countries or regions.