Innovation shouldn’t be an occasional extravagance. Forward-thinking companies continually seek ways to grow and evolve, eliminating or automating non-competitive work to free up time and people to do this.
When implemented correctly, a solid cloud migration strategy can be a crucial piece in the transformation puzzle, especially when companies are facing a squeeze. In fact, the initial allure of the cloud for most leaders is financial. Running an in-house data centre requires significant upfront capital investment and this technology is often not even used to capacity. The alternative of outsourcing computing needs to a co-located data centre means being tied down by long term licences. A study by IDC found that typical data centres are 45% underutilised. So why invest in a resource that won’t be used half the time?
In the cloud, businesses only pay for the computing power, data storage and services that they use. They can scale their technology consumption up or down based on business and customer demands rather than according to some arbitrary licensing agreement. “You can do more, for less, more cost-effectively”, says Phil Le-Brun, director of enterprise strategy at Amazon Web Services (AWS), the world’s most broadly adopted cloud provider.
You can do more, for less, more cost-effectively
The Covid-19 pandemic shone a light on the flexibility and affordability of the cloud, says Le-Brun. “Travel companies operating on AWS Cloud could quickly cut consumption and, therefore, costs, while supermarkets could ramp up their ability to handle a large number of customer calls.”
However, the benefits of the cloud go beyond cost. And as customer experience becomes a key differentiator for business success in the modern era, having access to the technology that enables excellence in customer service and fulfilment is becoming vital.
The cloud enables businesses to focus on exceeding customer expectations with new insights, products and services, rather than wasting time and money on running their own data centres or managing complex, expensive licensing deals, says Le-Brun. The real power of the cloud is that it allows companies to innovate at speed.
“In all, AWS Cloud enables businesses to experiment more, at a lower cost and, when they hit that winning idea, to scale it globally in minutes, not months or years,” says Le Brun. Offering a global infrastructure accessible to the newest startup through to the largest organisation, AWS allows more experiments to be run to find those magic ideas that will wow customers. Unsuccessful experiments can be shut down and successful ones ushered quickly into customers’ hands. This capability to test, pivot or scale allows companies to rapidly turn ideas into action. “We believe this ability to be agile and fast are universal, sustainable competitive advantages. And I say this from observing what a diverse range of customers such as Formula One, Dunelm, Sainsbury’s and Nationwide Building Society are able to do in the cloud,” he says.
A good example of this fast innovation is the Amazon Just Walk Out technology that many retailers are now using to rethink the retail experience. Customers can pick up items in-store and leave without the inconvenience of queueing to pay, with the bill coming through their Amazon account. “It was an initiative started with a clear customer need in mind, although the ‘how’ to achieve it wasn’t initially clear,” says Le-Brun. “Fast experimentation close to the customer, using the plethora of technology available in the cloud, enabled the team to find a path to achieving this goal.”
In a previous role, Le-Brun worked at a fast food chain, where he was corporate vice president for global technology development. Here, he saw firsthand the business advantages of working with AWS Cloud. His company gained the ability to build and scale what became a multi-billion-dollar home delivery business in months. This was facilitated through its cloud infrastructure, though it was achieved by focusing on its business needs, not the underlying technology or negotiating a multitude of licenses.
The cloud offers a way for all of us to operate in a more secure, resilient and sustainable way
A move to the cloud can also help inspire, attract and retain staff. Employees want to work with modern technology that allows them to deliver value faster. Le-Brun points to the dynamic team structures that AWS enables in organisations. “Within AWS, we organise around what we call two-pizza teams: teams of six to 10 people small enough to be fed with two pizzas, thereby enabling agility. These teams are responsible for delivering not just technology, but an actual business outcome. It’s an approach we help our customers adopt, speeding up decision-making, giving talented employees access to the latest cloud-based technology, and allowing them to deliver real, purposeful change to businesses rather than feeling like a small cog in a large machine,” he says.
The chances are these employees also expect their employers to recognise their obligation to operate sustainably. Increasingly, forward-looking organisations understand that there is both a moral imperative and business upside to considering the environment in their operations. A 2021 report from 451 Research found that simply moving to the cloud typically brings a five-fold improvement in energy efficiency in EMEA, and 2019 research by the same company found that operating in the cloud can result in up to an 88% smaller carbon footprint. And that is when a company is using the same processing in the cloud as in a regular data centre.
The flexibility in the cloud enables organisations to continue to optimise for performance, cost and environmental impact. AWS, for example, has a carbon footprint tool designed to deliver this level of insight and actionability.
The environmental crisis is just one of the confluence of critical events facing the world in this era of “polycrisis” across the economy, politics, society and climate. And customer preference and fickleness continue to keep businesses on their toes. Leaders need to be multi-dexterous and navigate the world’s increasing complexity. They need to simultaneously become more resilient, more effective in using their resources and more focused on growth.
These are still early days for cloud adoption – according to AWS CEO Adam Selipsky, in 2021 only between 5% and 15% of possible applications resided in the cloud. With so much potential already being realised, there is still a huge opportunity to reinvent every industry.
As Le-Brun says: “The cloud is liberating. It offers employees an opportunity to deliver value and organisations the ability to cost-effectively innovate in previously unimaginable ways. The cloud offers a way for all of us to operate in a more secure, resilient and sustainable way.”
To find out more, visit aws.amazon.com
