By Subram Natarajan
Given the circumstances around the Covid-19 pandemic, the adoption of cloud technology by different enterprises is visibly accelerating. This trend is driven by the need to become increasingly digital, thereby positioning organisations to offer differentiated value propositions.
Cloud, as a technology, has been in existence for more than a decade, and is primarily focused on infrastructure rationalisation and virtualisation. Over the years, it has evolved, providing business benefits around reduced time to market, accelerating innovation, optimising cost across the enterprise, and improving stability and resiliency. Despite significant investments around time and capital, progress towards realising these benefits from public clouds have been underwhelming.
Common barriers include (1) perceived high costs of application modernisation and the longish time duration of projects to realise benefits; (2) vendor lock-in with some of the cloud-providers, thus making portability difficult; (3) reliance on expensive services and hidden costs (such as cost of data transmissions) resulting in sticker shock; and (4) missing functionality required for the industry that the client is operating in.
While some of these issues are systematically getting addressed through various technology advancements and business model evolutions, lack of sufficient support for industry-specific requirements remained a significant gap until very recently.
If you take the financial services industry, most of the workloads are regulated, and require compliance with various policies and procedures laid out by the regulatory authorities. Moving to the public cloud entails meeting, and complying, with various norms set by the organisation as well as the authorities. More often than not, many of today’s public clouds are not built to handle such requirements. Cloud service providers may not even understand these requirements fully enough for them to address the gap.
A related industry-specific challenge exists with the telecom industry. This segment is witnessing a tremendous amount of technology-related innovations with the advent of 5G and edge computing. Telcom providers are rushing to monetise new 5G and edge computing-based services that will dramatically alter the way of communication.
Similar to the financial services, this industry, too, is highly regulated and, therefore, requires a cloud partner that understands the nuances of security, compliance, edge computing, software-defined network functions, etc. In the case of edge computing, the need for consistency across the pods is of paramount importance. And that is where open platforms play a vital role in seamless deployments and management of edge pods.
So, the emergence of the industry-specific public cloud is but a natural extension of what the market is demanding. By having various industry-specific control functions built in as part of the cloud platform services, the onus of enterprises having to worry about the infrastructure management — along with all the associated regulatory, security, and compliance — needs gets relegated to a large extent to the cloud provider. It includes data privacy and data sovereignty that may exist around the world with regional nuances.
When a public cloud has these capabilities built in, it addresses the problems of systemic risks that most organisations face with security, regulatory, and compliance. All of a sudden, customers can now start focusing on creating value differentiating offerings and products in a cloud-native environment – that is, accelerate innovation. Because the infrastructure is nimble, agile, elastic, and responsive, the ability to roll out new offerings to end customers increases multi-fold.
However, this requires the platform to be open, and also enables portability across various landscapes that the customer may carry. The industry-specific cloud platforms must, therefore, be hybrid and should transcend the information technology (IT) elements to knit business applications and processes together. Hybrid is where the industry expertise comes in, too. It’s not just banking or telecom.
There are other sectors – such as insurance and retail — that have domain-specific requirements, which need to be built in, with control layers that are tailored to each industry. These controls are what will allow organisations to realise the benefits of the cloud.
Often the hybrid industry cloud platform is developed and deployed with a mature domain player working in collaboration with a cloud platform vendor. Vendors today are offering financial service sector (FSS) and telecom cloud platforms to meet the requirements of their highly regulated industry customers.
The benefits of the hybrid cloud are immense. Everywhere you look today, businesses and organisations have an acute need for speed to market, flexibility and nimbleness, and continuous innovation. On this, the hybrid cloud delivers. Clients find that choosing a hybrid cloud approach is 2.5 times more valuable than relying on the public cloud alone.
Since the focus of the cloud consumer shifts to business-related functions, acceleration of business value, improvement of developer productivity, infrastructure cost efficiency, cost of regulatory, compliance, and security activities, all improve. We all know that only 20% of the workload has moved to the cloud. The remaining 80% presents an opportunity to realise these benefits in multi-folds.
Establishing the right open and secure architecture with the right industry experience is, of course, a predicate. A hybrid cloud is not only a means but a slingshot to every organisation’s future.
The writer is chief technology officer, IBM India-South Asia
