In late March 2020, the 2,000 employees of Barnsley Council, a local authority in the Dearne Valley of Yorkshire, England had to switch to home working, virtually overnight. The local authority used the cloud to switch to a paperless and virtual expense management system, streamlining back-office finance processes and eliminating the need for staff to present expense claims in person. This transformation was enabled by the SAP Concur platform. So says Rob Harrison, MD of SAP Concur for the UK and Ireland.
So does the cloud have a silver lining from the fallout of Covid-19? Global spending on public cloud in 2020 was predicted to increase by 17% on the previous year, to $266.4B, according to Gartner, compared to a 16% increase the year before. A small increase but growth is growth. Cloud computing is seen as an essential feature of digital transformation for any business. And this has been borne out internationally by the marked increase in businesses utilizing cloud and expanding their penetration in cloud services during the push for digitization due to the pandemic.
Cloud usage is going up
The Flexera 2020 State of the Cloud Report found that of the respondents asked specifically about their cloud plans in relation to Covid-19, more than half said that their cloud usage will be higher than initially expected.
As people and the economy are being adversely affected by this virus, it has hastened the need for organizations to work remotely, safeguarding employee health, and ensuring they can scale up or down to cope with changing demands.
So it seems that many organizations have heeded the Churchillian maxim of not letting a crisis go to waste.
Digital transformation is the process of using technology to make services and business processes more agile and efficient. Technically it is possible to digitally transform without cloud-based solutions, but for a multitude of reasons, most companies opt for them.
“Digital transformation without the cloud is not impossible but it’s very limited in scope. Really, if you want to get the best advantage from your digital transformation, cloud has to be an important element of that,” says Donald Farmer, a strategic adviser to software vendors and enterprises on data and analytics.
Cloud’s near essential role as a pillar of digital transformation hasn’t changed since before the pandemic, it’s simply that the uptake has quickened. While the trend to move to cloud-based solutions has been increasing steadily over the past two to three years, Farmer who is the principal of TreeHive Strategy has seen an increased acceleration this year.
Cloud computing is the on-demand utilization of IT resources, including data storage, processing power, and applications on a pay as you go basis via the internet.
The increased pace of cloud adoption shows that what was once a “nice to have” as recently as the start of the year has now become a necessity, according to Ross Perez, Head of International Product Marketing at Data Cloud company Snowflake, which offers multiple data analytic workloads in the cloud. He said: “[The pandemic] has turned being on prem[ises] from something that was a discomfort to a pressing business-critical need [to divest from].”
Since its advent in 2006, when AWS launched the first public cloud computing platform, enterprise companies have been making the most of this innovation by moving their IT processes and data storage into the cloud. Alongside AWS, other big players in the cloud market include Microsoft Azure and Google. In the following years, services offered as cloud solutions have expanded to include collaboration and communication tools such as Google Docs and Zoom.
The benefits of the cloud
While more established businesses have seen a need to undertake several small projects or a larger overarching journey to digitally transform the way they operate, some smaller companies and start-ups have originated with a digital-first model and have usually only ever operated on a cloud-first basis.
The alternative to cloud computing is the traditional on-prem solution, which includes hosting and maintaining private data centers and servers on a company’s own equipment on their premises. The inconvenient features of this are that the company will have to maintain the server which requires a level of expertise as well as the management of security, licensing and patching of software, and technical support. There is a high upfront cost, increased operational costs, and can take weeks to scale up storage capacity and processing power. It is estimated that data centers can cost between $200 and $1,000 per square foot
Some of the benefits companies cite for using cloud computing are faster and simpler technical deployment, lower costs and greater software functionality that can increase the number of users.
In Farmer’s view, it is worth taking a careful and considered approach to migrating to the cloud. He did not see a rush to the cloud once lockdown began. Many of the projects he saw being moved to cloud fairly quickly were difficult to work on on-prem when the team working on the project were geographically dispersed. “So it wasn’t as if people saw cloud as an answer to the problem. It was just the easiest and most effective way to continue with a project.”
To his clients, the principal drivers of moving to the cloud are agility and the ease and simplicity of managing complex systems. He added that reduced costs are a consequence of the above. “If you make things simpler and more straightforward then there should be a cost-benefit from that.”
Covid-19 disrupted everything
How is Cloud Compute and data storage being used to deal with Covid challenges?
Many companies experienced massive increases in demand for their products and services during lockdown, including streaming sites as people in the UK in April 2020 spent more than double the number of minutes per day watching video on demand as they did in an average month in 2019.
Following viral videos of shoppers scrapping for toilet paper in early March, one New York-based seller of bidet attachments saw sales increase 20 fold over four days. Conversely, demand for luggage dropped like a stone to the point that suitcase retailer Antler went into administration in May although a buyer was found for the company in July.
Expert CIO and strategic adviser Tim Crawford said on Deloitte’s Architecting the Cloud podcast: “Going from zero to sixty is hard and so is going from sixty to zero.”
Anthony Schneider, a solutions engineer at Snowflake saw firsthand how volumes of data that different customers were handling spiked and dipped. He said: “You have key services companies that are seeing a huge influx of demand and they are able to scale and meet those new volumes of data and new volumes of customers that are coming in and using their key services.”
Conversely, Snowflake customers in the travel industry were able to scale back the number of cloud services they required as domestic and international travel restrictions were brought in.
He explained how this meant not having to pay for unutilized storage. “The company is paying minimal to nearly no money to us while they are going through these difficult times. It’s helping them on that digital journey so they are not wasting money while still being able to keep the lights on.
Collaboration and communication
Social distancing, brought in to slow the spread of the virus, meant that commuting to work became impossible for many and working from home became the norm. At the end of March, 36% of British workers were working remotely. Face to face meetings became impossible leading to a radically different way of working.
This didn’t pose a problem to digital-first companies. Perez of Snowflake said: “Snowflake was built to “survive and thrive in this world.” Everybody was, from the beginning, prepared to and could work from home. We had all the tools and resources in place to be in a work-from-home environment.”
Hence the exponential increase in the use of cloud-based collaboration and communication tools of which Zoom is the golden child. The number of daily meeting participants rocketed from 10 million to 300 million.
Cloud-based communication tools have helped organizations around the world to continue their operations. Women in Digital, a Bangladeshi social enterprise for female empowerment of 52 people on staff, was able to “shift” the teaching from in-person to online on Google Cloud, according to founder Nila Achia. The move was planned for next year, but Covid-19 reduced the time frame. She said: “After locking down we have faced so many problems because we were not prepared for it. When we started working from home we depended on the cloud because we needed to access our working files from different places”.
Leeds and York Partnership NHS Foundation Trust, a mental health and learning disability care provider in the north of England, went live with an electronic patient record system during the pandemic and so utilized both cloud collaboration and data storage.
Bill Fawcett, CIO of the Foundation Trust said in a release: “We have been able to move our staff to working from home in just a few days, build real-time, Trust-wide dashboards of Covid-19 cases and redeploy staff while ensuring they rapidly have the access to information they would need for their new roles. In addition, we have reduced the revenue costs of the Trust’s core clinical records by 25% and integrated the system with four other key systems in the cloud.”
Using the cloud to thrive post-pandemic
Because the current business climate would have seemed entirely alien to us a mere 12 months ago, it may be prudent to heed the old financial disclosure statement ‘past performance may not be indicative of future results’.
Challenges may arise that we may not be able to even conceive at the moment. However, Patrick Johnson Head of Product at Patch Plants, a customer of Snowflake, can envision some difficulties ahead and so is looking to cloud tools for support with hiring and onboarding new team members and supporting existing team members with their mental health and wellbeing. To that end, Patch Plants is using Sanctus, an online mental health support platform for employees as well as continuing to use communication tools.
The benefits of using cloud tools, initially recognized by IT departments are now clear to the other parts of an organization, especially the executives who have the power to allocate the budget to give it the green light.
Schneider said: “The IT sides of business have been crying out to experiment with new technologies like Snowflake for a long time. The pandemic has helped the C-suite realize that those pains they have been hearing about are even more evident now. They are now facilitating those technical people who have always wanted to make that move.”
The consensus seems to be that the pandemic should have given companies that push to move into the cloud. Crawford said: “If there ever was a hurdle that stood in front of cloud, it probably got knocked down [by the pandemic]. When you move to the cloud one of the great things is [it’s] really kind of forcing [you] to think about how to run in a lights-out operation.”
For Tamara Slanova, Co-Founder of in-game item trading and monetization platform DMarket, the features of cloud that will allow her company to grow once we have handled Covid are the same ones that have brought it this far; efficiency and scalability. She said that utilizing cloud allowed her to use distributed ledger technology, machine learning algorithms, a self-built instant auction system, and other advanced solutions.
As the games industry was positively affected by lockdown with many new first time players, Slanova didn’t have to change her business model due to Covid. But the move to the cloud for many will have been pushed by the need for business continuity, however, said organizations should look at it as an opportunity to do business in a more innovative way.
Strategic adviser Farmer said: “The clients who have been most successful are the ones who have gone to cloud strategy for more business reasons, for more strategic reasons.”
He wouldn’t advise businesses to simply shift their existing systems into the cloud environment by taking existing operations and technologies and running them on someone else’s server in the cloud. Instead, he said: “You will be successful if you take advantage of new opportunities to do business in a different way on the cloud. You have to think about how the cloud changes what you do, enables you to do things differently, and take those opportunities.”
“The move to the cloud is a change in business strategy, not just a change in IT strategy,” he said resolutely.
Want to hear more about how customers are dealing with today’s business challenges? Register for Snowflake’s annual data Data Cloud Summit on November 18th here.