Simon McCullough, major channel account manager at F5 Networks, discusses how consumer power and the new data economy are rewiring business as usual.
Consumers are wielding a huge and unignorable impact on global cloud uptake. Thanks to influential legislative breakthroughs like the EU General Data Protection Regulation (GDPR), citizens have finally gained unprecedented control of their personal data.
The reverberations are already considerable across the world and businesses are scrambling for comprehensive organisational change and technological rethinks related to data storage, access, and security.
According to the Foresight Factory’s Future of the Multi-Cloud (FOMC) report and sponsored by F5, digital transformation imperatives, an intensifying threat landscape, and consumer behaviours are all poised to push European, Middle Eastern, and African (EMEA) businesses to breaking point in the next five years.
Consumer power
The FOMC report argues that “no single cloud option best serves all infrastructure demands”. Cloud migration is swiftly accelerating and the “future of the multi-cloud is set to open a wider spectrum of profitable opportunities for businesses to achieve better agility, scalability, and efficiency”.
451 Research cited by Foresight Factory claims that the “future of IT is multi-cloud and hybrid”, with 69% of recently surveyed global organisations planning to run multi-cloud environments by 2019.
By all accounts, consumers will have a growing influence on both spend and strategic service rollout.
They are already seasoned multi-cloud users of free services like Google Drive and Dropbox, and their appetite shows no sign of waning. New findings from Research Report Insights suggests consumer cloud storage services are on track for a 15,59% CAGR between 2017 and 2022.
“We are not necessarily going to find consumers leveraging S3 buckets or storage systems on Azure, but consumer-centric, SaaS-focused offerings will continue to grow at a significant rate,” predicts David Linthicum, a FOMC expert and chief cloud strategy officer at Deloitte Consulting.
Gartner concurs, estimating that $73,6-billion will be spent on SaaS in 2018, which makes it the top global category for overall public cloud spending.
As the FOMC report describes, there is an “unprecedented arms race” in the multi-cloud space and nobody wants to get left behind.
Retail giant Walmart is the latest out of the traps to overhaul their consumer-centric cloud strategy, recently entering into a strategic partnership with Microsoft Corp for wider use of cloud and artificial intelligence technology to make shopping faster and easier. Elsewhere, payment solutions company WEX released a global report suggesting that most surveyed executives “trust cloud-based systems more than locally hosted ERP/AP systems to keep account payables secure”. A full 80% indicated that consumer behaviours “strongly influence their business’s use of payments technology innovations”.
According to IDC, the discrete manufacturing sector is the top single industry consumer of public cloud ($19,7-billion), followed by professional services ($18,1-billion) and banking ($16,7-billion). The process manufacturing and retail industries are expected to spend over $10-billion apiece this year.
“The biggest multi-cloud consumers right now are Finance by a huge margin, Retail, and Healthcare – that is a huge hunk of the economy,” David Linthicum told the FOMC report.
Consumer influence on the price of the cloud itself is another interesting development. Third-party cloud service brokerages can leverage business models in which they provide value to consumers by aggregating public cloud services, enabling the flexibility to transparently move between providers through a single point of access. As a result, consumers and end-users benefit from a wide range of potential cost savings.
The FOMC also flags radical changes in the way that consumers view and value their data. Data is now a commodity and its security and overall value have never been more important. Such attitudinal shifts point to a possible future where consumers could pay for cloud services with their personal data.
Expansive opportunities
Consumer demands and industry competitiveness continue to make the cloud an essential option. The right deployment strategy makes it a viable and safe one.
Importantly, multi-cloud does not have to equal a security nightmare. Yes, there are challenges and complexities to contend with, but these are largely of temporary and transitional nature. Gartner spells it out in a recent blog post, arguing that CIOs “must change their line of questioning from ‘Is the cloud secure?’ to ‘Am I using the cloud securely?’”
Fortunately for business leaders, existing advanced security solutions mean applications can safely move to a cloud model that works best for a specific strategy or use-case, eschewing all geographic or infrastructural constraints. This is a big game-changer.
Ultimately, IT decision-makers want services that deliver, manage, and protect applications in the cloud as they do in the data centre. Avoiding rudderless multi-cloud sprawls and simplifying the related complexities is vital to determine which workloads fit the right environments. This means considering application delivery and security capabilities of each cloud provider, as well as the perennial issues pertaining to lack of visibility and control.
Confidence is a two-way process. Discerning customers who value their identity and information will increasingly choose brands based on security and data management credibility, as well as their ability to innovate new services at pace. As the FOMC concludes, most businesses need to be multi-cloud savvy for “compliance, security, customer service, and basic competitiveness” reasons within the next five years.