Cloud adoption will need to be part of a key strategy for CEOs that are looking to grow revenue Q/Q, Y/Y, while cutting costs and taking the market share from their competitors. Kicking off the Modern Finance Experience 2018, Mark Hurd, CEO of Oracle hammered home as to why Cloud is not just a modern technology but a generational shift. Hurd made some bold predictions that by 2020, even highly regulated industries will shift 50% of their production workloads to the cloud and 90% of all enterprise applications will feature integrated AI capabilities.
Hurd talked about how Macro economic conditions effects companies’ ability to grow their revenue. With the worldwide GDP growth at 2% and majority of that growth coming from China, based on the GDP growth, it’s not easy to grow revenue. Growing revenue is the priority of all the CEOs of a publicly traded companies. Therefore, companies have to lay out a new business model to get the revenue growth. Cloud technology can enable CEOs to invest in modern applications while cutting expenses and improving Cash Flow/Earnings. Companies that don’t modernize their applications will fall behind losing their customers to the competition. Only 50% of the S&P 500 companies that were in 2000 are still around.
Why will CEOs direct their CFO and CIO to move to the Cloud? Key takeaways:
- Most of the applications are from 1998, which is long time ago, given the fact that internet was still evolving, social, mobile wasn’t around. Maintaining these legacy applications exhausts about 80% of the IT budget, simply trying to keep the status quo. Old applications running in old infrastructure. With cloud operating expenses go down.
- Companies would rather outsource competencies around maintaining a Data Center, Data Security to vendors like Oracle and focus on retaining their customers and gaining market share.
- With the invention of autonomous database, ongoing maintenance and patching can be automated with no manual intervention.
- New companies in almost every sector are emerging with new business models and modern IT applications to increase customer services and take away customers from their competition. Companies need to continue to invest in modernizing their applications to stay relevant.
- Cloud infrastructure and applications cost less, you get the latest innovation without having to do any work. Emerging technologies around Machine Learning (ML) and AI is engineered directly into these cloud applications.
- AI and ML in these modern applications will continue to advance productivity
- Lastly, data is more secure and you completely shift the risk to vendors like Oracle by moving to Oracle Cloud.