The potential of technologies such as cloud computing, artificial intelligence, blockchain, and 5G to alter business processes needs no explanation. Yet, COVID-19 and the resultant lockdowns have made us realize that hesitant organizations are likely to be flattened by savvier competitors that continuously push the edges of innovation.
KPMG and HFS Research have come up with a report shedding light on the same. This report surveyed 900 business and technical executives at Global 2000 enterprises.
The report, titled ‘Enterprise Reboot: Scale Digital Technologies to Grow and Thrive in the New Reality,’ divided its research into two phases. The first phase of the survey was conducted when many countries began to recognize the impact of COVID-19 in March and April, and the second phase took place during the lockdown a couple of months later.
Hit On Investment
In general, a little more than half (57%) of polled executives said that COVID-19 has notably changed their organization’s strategic priorities for emerging technologies. Hence, the primary goal was survival. However, a large percent (59%) of organizations claimed that the coronavirus had created momentum to accelerate their digital transformation.
The problem is that budgets have been reduced to ensure survival. Investment in digital transformation can ensure a bright future, but are struggling organizations ready to take the leap of faith of investing for future?
Having a clear picture and defined goals is vital. It can also be seen in the polls as 56% of people said the migration to Cloud is an absolute necessity. The reason for this might be that technologies such as Cloud, automation, and analytics are maturing. Almost two-third (64%) of respondents believe that the combined use of emerging technologies can be more beneficial than isolated usage. The report also states that ‘AI-powered’ and ‘cloud-enabled’ are emerging as the new standard.
After analyzing two separate research phases, cost reduction was cited as the primary goal for investment in various technologies. Hybrid or multi-cloud were regarded as a cost-cutting option, so was artificial intelligence and automation. Moreover, 5G was perceived as essential for survival in the future, whereas blockchain and edge computing are important for long term plans. Blockchain is emerging as the foundation of infrastructure modernization, and investment in edge computing was centered on generating brand value. However, in phase two, all the analyzed emerging technologies barring blockchain and edge computing changed categories, and are now seen as essential for future survival.
Hybrid Cloud Is Overtaking Multi-Cloud
For cloud computing in particular, the report points out how the pandemic has not only shifted the priorities but scope as well. “Instead of piecemeal migrations of small datasets, many companies are now intent on moving an entire function’s data to the cloud at scale,” the report states.
Priya Emmanuel, managing director of Cloud strategy and transformation at KPMG’s US division, said the understanding of Cloud’ benefits-value creation and collaboration was well known. The report adds, “The daunting task is figuring out how to digitally rearchitect the business leveraging cloud while continuing to deliver day-to-day business services.”
As the world battles the ongoing pandemic, hybrid Cloud has emerged as a primary model. During phase one, 51% of executives were looking at multi-cloud as the most viable option, but this dropped to only 15% in phase two. Hybrid Cloud’s adoption was favored only by 25% in phase one but is shot up to 45% in phase two. Meanwhile, Microservices (11%/18%) and containerization (12%/23%) saw modest increment from phase one to phase two respectively.
The report states, “hybrid cloud models top the agenda, far surpassing other cloud strategies, including multi-cloud, that dominated pre-crisis. Major enterprises are planning to adopt this architectural cloud approach in the future to reduce risk of service disruption, extend the corporate network and functional workloads, take advantage of the best available services and features, and improve overall flexibility and interoperability of the business.”
Hybrid Cloud is expanding to private cloud infrastructure with an existing public cloud. Perhaps this is why it is perceived as a safer option than wrangling with multiple cloud providers.