Every day, I am lucky enough to sit in meetings with some of the largest corporations in the world to help them tackle their biggest business challenges. In the last few years, a common refrain in these conversations has been the move to the cloud—how to prepare for it, how to address it, and how to benefit from it. Yet over the past several months, I’ve heard some customers talk about a more ambitious goal: to be cloud-only by 2025.
In the energy industry, for example, the drop in oil prices is driving the need for IT to significantly cut expenses. This in turn is hindering the ability of organizations to invest in innovation through technology. Oil companies are typically late majority adopters but, in a cost constrained environment like this, at least one global energy giant has realized it needs to find a way to leapfrog to new technologies. Without a dramatic shift to the cloud, the company has decided that it may never catch up. As a result, this energy giant is now ensuring that all new technologies it acquires are cloud-ready. By 2025, when it is ready to move entirely to the cloud, it will have spent almost a decade replacing on-premises software with cloud software.
Coca-Cola is another example of a company driving top-down initiatives that will allow them to focus exclusively on cloud. At Hadoop Summit in Tokyo, the company discussed its use of cloud to address the replenishment needs of 550,000 vending machines across Japan—from the top of Mount Fuji to office buildings and street corners. Coca-Cola leverages Apache Spark and external and internal data in the cloud to anticipate inventory levels for each machine over the following 48 hours. As a result, trucks go out with exactly the right amount of product to replenish machines only when needed. Coca-Cola told the audience that this initiative is “transforming their business.”
These two examples make a case for how quickly cloud-only infrastructures could become the norm. Yet 2025 is only nine years away. If all cloud—or mainly cloud—is in your future, how can you prepare for a world where you have little to no on-premises data? Here are my recommendations for companies that are seriously considering this approach.
Understand how to manage your risk via data provenance
Increasingly, the biggest challenge facing organizations will not be how much data they have but how and where to manage it. The data’s country of origin, where it resides and how it gets shared will become critical considerations, so you can obey local laws and regulations, especially in Europe? This is increasingly important with upcoming General Data Protection Regulation in the EU. Many companies already tacitly know that data born in one country may already be being shared outside that territory, and that they are potentially moving data when they are not allowed to. For this you need a logistics platform that understands the provenance of the data and can help you manage the risk.
Think of cloud as the grease for other megatrends
Next is to realize that cloud speeds the other megatrends of IoT, Big Data and AI that are also going on at the moment. We’re on the verge of a business world driven by artificial intelligence, machine and deep learning. At the highest level CIOs are trying to get to this to drive transformations in their organizations.
It’s important to realize that there is no AI or deep learning without well-managed data. By this I mean in terms of both how your organization collects, manages, secures data; the provenance and governance of your ecosystem of data. It is an essential starting point. If your organization can’t easily collect and manage your data then you can't do any of that other stuff down the road. It’s also a culture shift: you have to get your people to do this naturally and that’s what may take the most time to get right. So start now.
Embracing cloud helps you to embrace all the data in the ecosystem. Cloud removes the friction to factor in new consumer or industrial devices to your IT strategy, all connected and sharing data via the cloud, and it provides the bridge to the new data architectures providing digital transformation. It accelerates the transformation.
I believe that's how many forward looking CIOs are already looking at it. Cloud provides the grease required to transform the business. It's probably absurd how long it takes for internal IT to deliver new capabilities and services via on premise infrastructure in your company. The business agility afforded by cloud enables you to deliver IOT and big data and can transform the access to and utilization of your ecosystem of data.
Look at leading examples to see the speed at which this is happening
Don’t think this applies to you? You can find an example in every industry of companies using cloud and data to transform their business.
Take an industry you might never even have thought of—farming. John Deere is one company successfully going through this. If you ask John Deere, they will say that they are now an analytics company, not just a heavy equipment manufacturer. They realized a while back that when farmers lease their tractors and combines they are also buying three dozen chips and a data collector via the cloud. They quickly realized they can provide that data analysis as a service to future farmers. Now John Deere sells analytics as a product, down to the seed planting level, even controlling the turning radius of the combines to optimize fuel consumption. This is fundamentally a different way of looking at farming.
GE is doing the same thing with aircraft engine data and their industrial internet concept.
The City of Saint Louis Metro is doing the same with sensors on the buses, so they can do route optimization and maintenance.
Planes and trains and buses have a connected data and cloud strategy. Why don’t you?