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Don’t just touch the cloud, dive in

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It’s been talked about for years – move to the cloud to be agile, flexible and able to innovate quickly and be less reliant on legacy on-premise systems. People have dipped in a toe, or toes, but a majority of companies still lean towards legacy – put it this way, there hasn’t been a lot of diving.

There are some enlightened companies out there who are focused 100% on cloud, such as Tainui Group Holdings the commercial arm of Waikato-Tainui. There are many others who are successfully mixing cloud with legacy systems and taking advantage of the best of both worlds. However, a vast majority do not have a cloud strategy and are relying on what they’ve always done – hand sitting is common.

There are many reasons for not moving, most of which are fading in strength. Some organisations are reticent because of existing financial commitments and investment in legacy platforms. Others fear losing control and there are concerns about security, performance and being tied to one provider.

There is also ongoing legacy system development by large corporates who have built their business on this technology and are not going to relinquish focus easily. They have power and fiscal strength to keep plying their trade.

David Linthicum writing in Infoworld highlights these on-premise providers having footholds in the public cloud as well, but he doesn’t consider these traditional providers part of a tipping point.

He says: “traditional on-premises providers are innovating largely for on-premise platforms and using platform analogues to run in the cloud as hosted software. It’s an afterthought more than a strategy; they are not yet cloud-native. What continues to emerge in the public cloud is new technology that never had an on-premise version—nor ever will.”

There are plenty of increasingly powerful reasons to move towards the cloud. The rapidly developing opportunity of AI, machine-learning and data lakes are all cloud based so not being able to access these easily will be limiting.

Consider companies like Amazon Web Services (AWS), Microsoft and Google, all offering cloud services. The size and influence of AWS is well-documented and it’s far larger than Amazon, the online retailer. The other two are growing significantly as well. Expansion at this level by these massive companies provides a signal to the market where cloud-based services are headed, and where businesses should be headed too.

The speed of change is relentless, as highlighted by Hon. Grant Robertson in a speech to the Productivity Hub, in February 2018. He cited the McKinsey Global Institute’s estimate that change is occurring at ten times the pace of the Industrial Revolution and 300 times the scale, with roughly 3,000 times the impact.

I suppose the question for all organisations is do they want to be part of this change, or not? It’s a choice between having a focus on cloud or not.

Thomas Siebel, founder of Siebel Systems, puts it this way:

“So when I see CEOs who may be experimenting here and there with AI or the cloud, I tell them that’s not enough. It’s not about shiny objects. Tinkering is insufficient. My advice is that they should be talking about this all the time, with their boards, in the C-suite—and mobilizing the entire company. The threat is existential. For boards, if this isn’t on your agenda, then you’ve got the wrong agenda. If your CEO isn’t talking about how to ensure the survival of the enterprise amid digital disruption, well, maybe you’ve got the wrong person in the job. This may sound extreme, but it’s not.

It’s increasingly clear that we’re entering a highly disruptive extinction event. Many enterprises that fail to transform themselves will disappear. But as in evolutionary speciation, many new and unanticipated enterprises will emerge, and existing ones will be transformed with new business models. The existential threat is exceeded only by the opportunity.”

Closer to home, the Institute of Directors in New Zealand reported in the 4th Annual Director Sentiment Survey in November 2017 recently that just 30 percent of directors think their boards have the capability to lead the digital future of their organisation – scary preparation for the next industrial revolution, that’s already the main game in town.

For companies in New Zealand, it’s about time to wake up and smell the coffee – the cloud needs to be taken seriously as a gateway for growing opportunities to innovate. Start talking about it and don’t stop until decision-makers listen.

I just think organisations that don’t hear this message will land up in cuckoo land, confused and wondering what happened?


Editor’s note: You can also find a summary of this article over on Rush Digital’s thought leadership section.