Executives around the world are under pressure to innovate or die, with the value of information and security among the top priorities for all businesses.
Adoption of cloud technology is important where there’s elastic demand, helping businesses map their metabolism and only pay for computing resources as and when they need them.
Retail is the perfect example of this, with seasonal impacts during the so-called golden quarter between October and December and huge online events such as Black Friday when demand is off the scale, playing havoc with fixed infrastructure arrangements.
Shop Direct, which includes the £800-million online brand Very.co.uk, has committed heavily to a hybrid cloud infrastructure that allows it to react quickly to market changes, scaling seamlessly through the peaks and troughs of the year, and offering a much improved customer experience.
Andy Wolfe, Shop Direct’s chief information officer, says: “We operate in a very competitive market and therefore we are constantly looking for ways to differentiate ourselves from the competition, which results in high demand for IT change, especially in areas like mobile. We need to be able to spin up development and test environments very quickly. IT capacity can’t be the bottleneck in driving change or innovation.”
The results speak for themselves in a language any shareholder can understand: increased site availability from 57.47 per cent in December 2012 to 99.99 per cent in 2013-14; record order rates with more than a quarter of a million page impressions per minute on Very.co.uk on Black Friday; and an increase in trade of 4 per cent over Christmas 2014, including sales via mobile devices of 45 per cent.
Hospitality is another industry undergoing a major digital transformation. For next generation travellers the journey begins online and thanks to social hubs, such as TripAdvisor and Booking.com, buying decisions are heavily influenced by consumer opinion. To keep a pace of this change, hotel chain Marriott International is migrating a significant portion of its core IT systems and applications to an open cloud platform over the next few years to offer faster digital services to web-savvy guests and discern insights about them from its more than 4,000 properties across the globe.
This kind of activity marks another strong growth area this year – analytics as a service (AaaS), where large or complex data sets are analysed using cloud-hosted services. Information is the new gold, but it isn’t just about understanding data. Service industries in particular need to deploy that understanding rapidly on a mass scale.
At last we are close to technology actually enabling business, to the point where it is already no longer just the domain of techies
How many times have you stood on a platform wondering when your delayed train might make an appearance and grumbling to anyone who’ll listen about the lack of information coming from station staff? National Express Rail now uses mobile technology and real-time data analytics to distribute that information as it’s called for through the cloud.
These infrastructure changes are often not so much about cost-saving as driving up the value of customer experience and providing more flexible working conditions. Although from a provider’s perspective, intense competition in infrastructure as a service (IaaS) is making it a race to the bottom in terms of price, causing some players to exit gracefully cloud-left.
But as Windows 2003 soon moves to end of life on July 14, the challenge to migrate and modernise will naturally push a lot of businesses towards the cloud rather than shifting sideways to the current version of Windows Server 2012 R2. This is no bad thing as businesses at all levels are now experiencing cloud technology as a powerhouse tool for developing new strategies, forging closer ties with customers, and tapping into the expertise of employees and partners. For these reasons it is pretty much a staple in the startup culture, radically reducing the barriers to entry in any sector.
“At last we are close to technology actually enabling business, to the point where it is already no longer just the domain of techies, but now truly accessible to the business and business users. Cloud and the transformation to digital services has been the catalyst,” says Chris Chant of cloud consultancy Rainmaker Solutions.
Perhaps one of the most striking commitments to cloud comes from the public sector. Launched in 2012, the UK government’s G-Cloud initiative is at the heart of the “cloud first” ICT strategy.
At the Cabinet Office, Stephen Allott, crown representative for small and medium enterprises (SMEs), explains: “The G-Cloud digital marketplace is the stand-out reform for getting full value from SME suppliers. With a £600 million a year run rate and 49 per cent going to SMEs, it’s a revolution. Both central government and the wider public sector can buy from thousands of SME suppliers in minutes rather than months.
“Compliant by default procurement is the new standard. Plus the G-Cloud is a shop window for British SMEs globally. The US recently acknowledged that the Crown is five years ahead in digital government and the G-Cloud is one of our key platforms in that.”
While security remains a concern for any business, the most recent iteration, G-Cloud 6, is the first to use the government’s 14 cloud security principles to enable buyers to assess the security of suppliers’ services. For most this is likely to go a long way towards allaying fears of moving to the cloud.
Work still needs to be done to address the migration of workloads transparently from one cloud service provider to another, without experiencing any down time. This requires applications to be designed accordingly, using open source, open stack technology which we’re also going to see a lot more of this year.
For Doug Clark, IBM’s UK and Ireland cloud leader, it’s a winning move for business. “Not all clouds are created equal. What defines the winners is an agility and flexibility that comes with a cloud built on ‘open standards’. This allows organisations to pick and mix the elements they need to build solutions, to meet the specific needs of their business and consumers, and that can be continually improved,” he says.
This movement towards open standards will prove a real leveller as well as an enabler. Niche developers from small companies will be able to work together, bundling their skills like fusion cookery. The result will be plug-and-play, hybrid applications that potentially deliver true innovation, rather than just the press office’s interpretation of the word, and can constantly evolve to meet the ever-changing demands of the digital consumer.