Digital Transformation

Why Businesses Are Turning to the Cloud Now More Than Ever Before

enterprise cloud adoption

We’ve made it to the pivotal juncture for enterprise cloud adoption. Thought leaders and research firms have predicted 2018 to be a significant year for businesses shifting to cloud-based platforms.

Some of the stats:

“In 2018, we’ll cross the significant 50% adoption milestone, and cloud applications, platforms, and services will continue to radically change the way enterprises compete for customers.” – Forrester Research

“By 2018 more than 50% of enterprise IT infrastructures and software investments will be cloud based.” – IDC

“Highlighting one of the greatest growth markets the tech business has ever seen, just a handful of the world’s leading cloud vendors are on pace to generate $100 billion in combined enterprise-cloud revenue this calendar year.” – Forbes article published May 21, 2018

Indeed, cloud computing has advanced as the clear choice for any enterprise needing to keep pace with competitors or aspiring to become a market leader (Why Business is Better in the Cloud).

“Cloud-based platforms are becoming the preferred option for improving and expanding an enterprise’s IT functionality and IT business processes,” said Jason Hudnall, general manager of Perficient’s St. Louis operations.

Joel Thimsen, cloud strategist at Perficient, cites several motivations for the steady increase in enterprise cloud adoption.

“I see many organizations looking to reduce investments in physical data centers, accelerate their solution delivery time, provide a platform for innovation, increase security (yes, better security in the cloud), and more,” he says.

His team has been working on implementations for customers across the gamut of enterprise cloud solutions, including:

  • infrastructure as a Service to Serverless
  • developer-focused PaaS solutions to Perficient-hosted MSO
  • cloud-based container orchestration
  • integration across Software as a Services selections

“While we are seeing a growing need for skills and solution guidance across all of these areas, there are a couple key areas in which I’m seeing exceptional activity,” Thimsen says.

3 Enterprise Cloud Adoption Trends Going Strong Now

Key trends Thimsen and his team have identified:

1. Maturity of Cloud-First Models

“We have seen continued maturing of cloud-first models and a sizable shift to evaluating and designing multi-cloud solutions. Looking to avoid vendor lock-in, extending customer reach, and extending private clouds capacity into public cloud platforms are all drivers.”

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2. Container Orchestration at Critical Mass

“We have seen a tremendous amount of activity in developer-focused PaaS solutions and container orchestration during the past 12 months. These have been gaining some traction for quite some time. However from our perspective, they are just now hitting a critical mass of enterprises that are shifting from proof of concepts and low-risk workloads to moving tier 1 production workloads into the cloud on these types of platforms.”

3. DevOps Remains Key

“DevOps remains as a strong corollary to the move to cloud. As organizations accelerate their ability to pivot to changing market conditions and innovate quickly through cloud solutions, the pressure is mounting on the development and the infrastructure and operations teams to move more quickly. Additionally, just the sheer number of technical components being produced as part of these solutions is growing. Where it used to be expensive and long lead times to spin up new infrastructure, now, in the cloud, it is fast and requires relatively minimal investment. This results in designs that are less constrained by physical infrastructure.”

How Businesses Are Using Cloud

Besides boosting operational efficiencies, cloud enables digital transformation by allowing organizations to compete on innovation. Every day, more enterprises understand that innovation is necessary to keep pace with (or stay ahead of) digital disruptors. Cloud solutions are among the many tools to help them achieve new possibilities for their businesses.

Representatives from the National Geospatial-Intelligence Agency, TD Ameritrade, and the First National Bank of Omaha recently participated in a panel discussion at the annual Gateway to Innovation conference to discuss how cloud-based platforms are helping them achieve value-driven results.

5 ways these organizations are extending legacy applications’ value by moving to the cloud:

  1. Planting the first seed before organically growing their digital transformation
  2. Looking at digital transformation holistically
  3. Having a partner with expertise and knowledge in re-platforming and re-architecting
  4. Understanding that digital transformation takes time
  5. Knowing that both business metrics and mission metrics matter

The driving factors behind cloud adoption depend, of course, on an organization’s specific needs. Thimsen and his team recently worked on an interesting cloud solution for a medical device manufacturer. The company has developed a cloud platform to handle streaming data from its medical devices for real-time operation-room feedback and predictive analytics to support maintenance.

“We’ve talked to a lot of health plans about leveraging the cloud for innovation incubators,” Thimsen says. “These incubators or labs allow the health plans to set up cloud environments to prototype ideas and test them out in the market at a low cost and with minimal investments.”

His team recently leveraged a container-based PaaS to help a large health plan more rapidly deploy their sales and marketing applications to their customers. “That was compared to the old multi-tier J2EE application approach they had previously,” he says.

Cloud translates well in the healthcare industry. Burdened with multiple systems, legacy environments, and disparate repositories, BJC HealthCare turned to a cloud environment to reduce hardware and server costs, increase scalability and flexibility, and speed time to deployment.

Another key sector for cloud growth: financial services. Thimsen points to The Depository Trust & Clearing Corporation (DTCC), a U.S.-based post-trade financial services company, as having an interesting use case around data lakes in the cloud.

CPI Card Group, a leading provider in payment card production and related services, has realized significant results in taking its financial reporting to the cloud. “Right off the bat, we were able to have a positive ROI in less than a year,” says Tyler Wilson, ERP Applications Manager, CPI Card Group. “CPI’s cloud strategy, specifically around our applications, is we want to move everything we can to the cloud.”

Enterprise Cloud Adoption Is Here to Stay

For the foreseeable future, enterprises will continue cloud adoption in order to remain agile, relinquish the need to update software and hardware solutions, and provide the fuel to accelerate their digital transformation initiatives (Why Business is Better in the Cloud).

“Cloud is no longer about cheap servers or storage — it’s now the best way to turn great ideas into amazing software, faster. In 2018, cloud computing will accelerate enterprise transformation everywhere as it becomes a must-have business technology,” writes Dave Bartoletti, Vice President, Principal Analyst, Forrester, in Predictions 2018: Cloud Computing Accelerates Enterprise Transformation Everywhere.

Looking beyond 2018, advisory firm Gartner Inc. expects corporate “no cloud” policies to be as rare by 2020 as “no internet” policies are today.

Tomorrow’s forecast is bright with plenty of cloud cover.

Digital innovation continues to disrupt industries at lightning speed. Today’s organizations are transforming their entire business – from strategy to operations, technology to culture – to better deliver value to their customers. In 2017, we compiled the top 10 trends leaders needed to know when it came to their digital transformation journey. In this 10-week blog series, we’ll further explore each trend and address how you can continue to modernize your business for success.

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Digital and Social Media Marketing Manager, Perficient

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