US Fortune 100 and UK FTSE 100 Companies Migrating to Cloud After Overcoming Security Fears
25.08.16 |Opinion Pieces

The results are in: the cloud is more than just a passing fad. Judging by the level of adoption it’s achieved, and it’s almost permanent position on the priorities list of CIOs and CTOs, the technology is now mainstream and here to stay. Of course that’s hardly surprising news for a delivery model that removes a number of concerns for companies in terms of storage, operations, software deployment, and so on. Makes sense right? I mean why not let someone else handle software and security updates thereby eliminating such tasks from an otherwise overworked internal operation?

That’s not to say it’s all been plain sailing. For example, countless companies have expressed their concerns over security: How can larger-scale companies expect to keep their assets protected by migrating them to an external service provider? How could these companies guarantee effective protection? Would sensitive internal data remain fully secure and private even in these types of enterprise solutions? Etcetera, etcetera…

As most business professionals now recognise, the legitimacy of these concerns – alongside their probability – has certainly diminished over time. Cloud-based services continue to push forward with an agenda of innovation, security, stability, and service. Accordingly, the security concerns once held by larger companies are beginning to diminish. In fact, enterprise-level corporations across the globe are overcoming their initial trepidations, and confidently making the move to cloud services – placing them at the front of the queue for experiencing the full benefits of the cloud. [ i ]

Analysing the Current Trend in Cloud Services

While security concerns were once a major barrier, smarter firms are now recognising the wider value (as well as high-grade security) offered by leading cloud providers. Current trends show that companies across all industries are taking the plunge into cloud-based solutions. For most it is a question of ‘when’ not ‘if’, and while some industries are slower than others, forward-thinking IT departments can benefit greatly from speeding up the transition.

One industry where change can be described as slow-growing is financial services. However, that’s not to say that banks, insurance companies, and other financial institutions are failing to successfully transition to the cloud. For example, one of the largest financial firms in the world, Capital One, revealed their migration to Amazon Web Services in October 2015. Other enterprise-level customers making a similar journey include Adobe, Airbnb, BMW Auto, General Electric, Harvard Medical School, Outback Steakhouse, SoundCloud, and countless others. [ xi ] Yet, many analysts considered this move a ‘tipping point’ that demonstrates the attractiveness of latest generation cloud security and agility. [ ii ] Put another way, if a company as large and as global as Capital One could trust the security and stability of cloud-based services, then it was time for other firms to begin recognising the value these solutions could offer.

Key Takeaways from the ‘early’ adopters

The feedback from those who’ve already adopted a cloud solution typically fall into one of three thought streams:

1. The Cloud is as safe (or safer) than most mainframe systems

Studies have already shown that traditional mainframe systems often hold more security vulnerabilities than their cloud counterparts. [ iii ] At the same time, while cloud-based services employ world-leading security policies and updates, many mainframe systems fail to provide similar up-to-date capabilities. Yet if a mainframe is available for online access, as most are, they remain potentially more at risk than public cloud services. [ iv ]

2. The Public Sector is migrating to the cloud

Even governments have begun a widespread adoption of cloud services to simplify and streamline their often slow moving operations. For instance, the UK continues to implement public cloud infrastructure within its governmental operations – all designed at improving the overall state of operational efficiency. [ v ] In fact, the Minister for Cabinet Office spoke at a 2015 conference about Crown Hosting Services as a solution that merges together HM Government and Ark Data Centres to provide cloud services for accelerated governmental adoption. [ xii ]

3. Most major organisations are heading to the cloud as well

For businesses not already utilising the cloud, data trends show that some form of adoption – be it public, private, or hybrid – is inevitable. Companies like Johnson & Johnson have already paved the way toward full-scale deployment, [ vi ] while across the UK FTSE 100 nearly half of companies (44%) have adopted cloud-based services from Google –including Maps, Apps, Search, and the Cloud Platform.

As Shailesh Rao, Director of Google Enterprise, noted at the 2015 Gartner Symposium ITxpo, ” We thought this was a good checkpoint to say that it’s actually not just small businesses – it’s larger enterprises using Apps too.” [ xiii ]

Making the Move to the Cloud

From a logistics standpoint, migrating to the cloud is often easier said than done for Fortune 100 or FTSE 100 firms. According to a Morgan Stanley survey of 100 CIOs, up to 53% of the respondents had not yet adopted any public cloud infrastructure. [ vi ] While many IT professionals remain sceptical of this statistic, the truth is that the number of cloud adopters within the UK FTSE 100 is anticipated to rise by up to 9% in the next three years. Adoption numbers are slightly higher within the US Fortune 500. As Google’s Senior VP and Chief Business Officer Nikesh Arora reported at the company’s Q1 2016 earnings call, 60% of Fortune 500 companies had already adopted the Google cloud in some capacity – with even more planning to follow suit in the coming years. [ xiv ]

As these organisations prepare for the shift to this business dynamic, successful cloud-based providers are working even harder to accommodate their entry. While Amazon has long been recognised as one of the ‘top dogs’ in the sector, countless other cloud providers are ensuring that the industry remains competitive and focused on delivering the best possible service to businesses.

For example, aerospace leader Boeing as well as agricultural giant Land O’ Lakes were seeking a cloud solution that provided both the transition services and the power to supply everything they needed across their cloud operations. Rather than opting for Amazon or Google, both of these companies opted for a solution through Microsoft Azure. [ vii ]

One of the primary aspects that led these firms to choosing Microsoft was simplicity. Microsoft’s Azure could scale multiple interacting business assets into a much more unified, user-friendly system. For Boeing, this meant that data storage and analysis could be streamlined to make it easier for the company to interact with hardware and equipment through the Internet of Things (IoT) – while optimising overall efficiency. [ viii ]

As these examples show, even large firms are opting for the cloud to improve organisational unity while simplifying their operations. What’s more, as each large-scale business makes the migration, those who remain with mainframe systems are slowly facing obsolescence – and a much steeper uphill battle to remain competitive in the global economy. [ ix ]

Where the cloud is heading

While the cloud as a general model already boasts an impressive number of business users, the momentum continues to move forward toward universal adoption – and even more corporations, enterprises, and related businesses are expected to transition a large majority of their operational systems over to the cloud in the coming years. In fact a growth in cloud usage is expected across the board, according to a survey by disaster recovery firm CloudEndure [ x ], which goes on to identify the following trends:

Cloud-based services, both public and private, are expected to grow 22% within 1 year and another 15% within 2 years. Older virtual machine adoptions are expected to drop in usage by 25% in the first year and 31% within 2 years.43% of those polled already adopt a public cloud-based system.Within 2 years, that number will grow to incorporate up to 64% of users.

What this data reflects is that the positive trend towards cloud usage is well on the way to 100% adoption. While projections vary based on specific research, one conclusion holds true: cloud systems represent the future of enterprise business computing.

Early adopters of cloud tech enjoy the greatest benefits

Companies that remain hesitant to adopt a cloud-based approach are already missing out on a variety of benefits relating directly to their business’s operational performance. By adopting a cloud-based solution now, businesses can still look to gain the upper hand on much of their competition. Not that the good news stops there, because, the cloud will also help improve a business’s potential irrespective of size (from smaller firms to enterprise-level brands), and ensure it remains at the forefront of technology as the world of innovation pushes forward into the future.

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As Woolard mentioned:

“Disruptive innovation drives a number of dynamics in the market. A few firms will emerge as genuine competitors at scale to the existing incumbents. Many will be sufficiently interesting business models that they may find themselves purchased by bigger players and their technologies adopted in the mass market. And both of these developments may drive other incumbents to compete harder to retain or gain customers.”

Christopher Woolard, the Director of Strategy and Competition for the FCA


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