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Cloud Digital Transformation for SMEs
In recent times, reports have shown that traditional IT spending (which primarily consists of on-premise data center gear and licensed software) of many organizations has been dwindling.
This decline has been largely attributed to the COVID-19 pandemic and the increased cloud migrations for digital transformation.
Tech giants like IBM, SAP, Intel, and Microsoft all seem to agree that the demand for cloud-based infrastructure is climbing, and a solid understanding of smooth business model transitions will help reduce the risk of crash landings.
If the reports are anything to go by, it means the days of old-school IT purchases are fast coming to an end.
For instance, SAP’s third-quarter earnings have birthed new decisions as the company announced that it would shift its products to the cloud faster than expected which is what customers want.
In his exact words, Christian Klein, CEO of SAP, said, “Nobody can predict the COVID-19 economic impact beyond 2020. But given recent developments, it is prudent to assume a more gradual recovery, which we have now done.”
“For our on-premise business, we have seen significant investment delays in 2020 in several hard-hit industries and geographies; we see an increasing demand to accelerate the move to the cloud. We do expect software license revenue to decline further from today’s levels also in the future, considering our accelerated cloud transition.”
Similarly, shortly after its third-quarter earnings report, IBM CEO Arvind Krishna had this to say; “Regarding today’s environment, clients continue to balance short-term challenges and opportunities for transformation. In the short term, they are focused on operational stability and cash preservation. We see this, especially in our largest software license transactions and delays in some services projects.”
Lending his voice to the development, Intel CFO George Davis highlighted “intensifying COVID-related demand impacts” across the data center, enterprise, and government units during the company’s third-quarter earnings conference call.
The situation isn’t too different from Microsoft as its on-premises licensing sales suffered a shortfall, affecting its first-quarter revenue. The software giant plans to offset the declines with the profit it generates from its commercial cloud services.
What has been going on?
It’s an open secret that businesses have been moving their IT infrastructure to the cloud for some time now, but the COVID-19 global pandemic seems to have speed up that shift.
Today, CIOs are expected to lead a digital transformation that allows employees to work remotely with IT solutions that are agile and data-driven enough to meet the needs of customers no matter where they may be.
Licensing software and buying hardware that will likely become obsolete doesn’t just seem to be a smart move at the moment. Thus, it is a significant risk to spend the IT budget on on-site infrastructure.
On the other hand, moving to the cloud holds so many benefits, one of which is that it helps businesses to significantly cut down costs.
CIOs that delay in taking that critical step may find themselves neck-deep in technical debt, which will cause financial stress and affect IT agility – all of which can easily be avoided.
Strategies for Small and Medium-Sized Enterprises (SMEs) to Migrate to Cloud
As small businesses grow, they experience different challenges that threaten growth and efficiency, and these include the high cost of maintaining IT infrastructure, high-security risks, longer implementation times, and more. Transitioning to the cloud can help eliminate these problems, but the cloud strategies often make the difference between failure and success. Here are the top cloud strategies for SMEs looking to migrate to the cloud.
1. Understand the technology stack
Today, cloud providers offer robust solutions at different levels, including software, platform, and infrastructure as a service (SaaS, PaaS, and IaaS, respectively). Many IT experts tend to think it’s best to migrate existing virtualized workloads to cloud-based virtual machines, which is a part of IaaS. However, they miss the fact that moving common workloads such as web services and databases to a PaaS provider is a more effective, easier to manage, and less complicated option. Likewise, adopting a SaaS approach for applications can be highly beneficial since it simplifies the process of managing them. Before you make any decision, consider understanding the technology stack to know which is best for your business – the lower-level technologies or the higher-level offerings.
2. Prioritize your projects
Your business doesn’t have to make a massive shift to a public cloud provider all at once. Businesses can get the most out of the transition by identifying lower-risk yet high-reward areas for initial implementations so they can gain experience about the process. For most small and medium-sized enterprises, the areas to consider first for deployments are development/testing environments, applications with few dependencies, and the creation of new high-availability/disaster recovery sites.
3. Implement IT best practices
One of the lures to cloud-based service offerings that many small businesses find to be almost irresistible is access to a self-managed infrastructure with premium features that may be too costly for them. However, keep in mind that migrating to the cloud doesn’t eliminate the responsibility for user experience and troubleshooting. Rather than dumping your software to the cloud, IT staff must use cloud services to focus on higher-value technology projects. In other words, they must keep in mind critical functions like security management, apps integrations, and end-to-end monitoring.
4. Perform some housekeeping
A common mistake many small businesses migrating to the cloud make is taking shortcuts and making hasty decisions, which may lead to lots of technical debt. Understandably, the business world is dynamic, and the rapid change of business requirements make it hard for IT departments to keep pace, resulting in less-than-optimal solutions. The consequences include the proliferation of applications, services, servers, and infrastructure that can cause huge maintenance overhead. Rather than migrating the existing solutions, a smarter move for some businesses might be to move to cloud-based services to consolidate and realign critical services.
Cloud has gone mainstream because of the incredible opportunities it offers businesses to manage their IT infrastructure and applications at a fraction of what they would have otherwise spent from their IT budget. Nonetheless, it’s important to plan and prioritize before making the switch to make migration