FOR the past several years, having a cloud computing strategy has become a de rigueur for most companies, ranging from large enterprises with global presence to tiny startups struggling to establish themselves. Cloud computing is in the process of becoming integral to enterprise IT set-ups just as ERP (enterprise resource planning) and other productivity tools are.
Even though the term "cloud computing" is used in a overarching sense to capture any activity associated with the "cloud", in actuality there are several important differentiations within cloud computing. While two companies may be both using cloud services, there may be no similarity or relation between the kind of services they use the cloud for.
In order to understand how this works there's a need to give an overarching definition of what constitutes cloud computing.
To put it simply, cloud computing is delivering services like storage, networking, software and server capacity over the Internet. Instead of companies buying their own servers and computers, they rent the services from specialised service providers which provide them through a secure connection over the Internet.
Speed, the ability to scale elastically, performance and productivity are all gains that could be realised if a corporation switches its operations to the cloud.
A company or even individuals may already be using the cloud without being aware of it. Storing a document, a photo or a song on an online storage service like Dropbox means is already "cloud computing".
In the Asia-Pacific region, businesses are constantly looking for ways to deliver digital capabilities and offerings to serve ever-growing numbers of smartphone- and tablet-toting customers, as computing goes increasingly mobile. Adopting a mobile-first, cloud-first approach helps companies differentiate themselves from competitors. Cloud computing enables businesses to build their digital offerings rapidly and deploy them quickly.
A case study highlighted by market research company Forrester showcased how important cloud services were to modern companies. An Indian e-commerce startup chose to host its enterprise resource planning (ERP) application on a public cloud infrastructure provider in Singapore. The company needed speed and flexibility in managing, among other things, its logistics, online orders and digital payments, and cloud services provided that agility. The company eventually benefited from cloud services by getting their new products to market faster, and manage their warehousing, logistics, online orders and digital payments far more efficiently.
US$236 billion market
In a market report, Forrester says the global cloud security market is estimated to reach US$3.5 billion within the next four years. Meanwhile, in less than half a decade, the company predicts the public cloud services market will reach US$236 billion, growing 30 per cent year-on-year over the next three years.
Cloud usage by governments and businesses in the Asia-Pacific region is forecasted to grow by 3.3 per cent in 2017 and 5.7 per cent in 2018, according to Forrester. Compared to the US and Europe, software and technology consulting services have grown little in the Asia-Pacific as the countries in the region are still getting up to speed in assembling the hardware infrastructure required to run complex cloud servers.
Despite the fledgling progress in the Asia-Pacific, cloud usage growth in the region is projected to be strong and constant throughout 2018 and beyond. India's tech spending will maintain the highest growth rate in the Asia-Pacific, according to Forrester. A strong economy, combined with government-led initiatives, will boost investment in the software, services and outsourcing segments.
Closer to home, Singapore is investing heavily in infrastructure to support its Smart Nation initiative. The country is chasing productivity gains by deploying robotics and automation at industry level, helping the software and tech outsourcing services to grow to support these initiatives.
In constant currency terms, software and services spending will rise by 7 per cent to 8 per cent in the Asia-Pacific region, with business process apps seen to be the largest and fastest growing software category, according to Forrester. Hardware spending will expand by 4-6 per cent, but telecom and hardware maintenance spending will see modest or even flat growth as spending is focused on other portions of the business like cloud infrastructure.
Cloud computing is growing as businesses transform their operations into nimbler, more responsive solutions, yet still keep costs down. It should no longer be a secondary consideration for a business looking to deepen customer experience (CX) bonds - it should drive it instead.
To enable this digital transition, however, there is a requirement for a lot more than just buying a roomful of servers and plonking them somewhere and expecting them to work. Companies and organisations require a robust underlying IT infrastructure, according to an IDC research report. Having strong foundations provides the "necessary flexible and agile yet resilient and secure services structure, that supports new and existing workloads seamlessly", the report said.
In the Asia-Pacific, IDC has made several predictions with regard to the future of cloud deployment across companies, and how the landscape of cloud providers will shape up to be, compared to the present. Some of them are:
What this means: Increased data consumption and the need to integrate multiple datasets will drive companies to optimise and streamline their APIs so as to modernise their applications and more crucially, increase security across their offerings.
What this means: This is an important point to note. Companies in the near future will emphasise less on building their own aforementioned giant server rooms, and instead focus on a "cloud-first" approach, working with their IaaS/PaaS to expand globally without sacrificing scalability. IDC notes that Asia-Pacific companies have yet to catch on to this trend, with just over 51 per cent of budgets currently going to traditional IT deployment, but IDC expects this to change within the next two years as competition heats up and companies vie for a differentiating factor.
What this means: Asia-Pacific organisations will see greater cloud adoption, with spending on cloud set to triple.
The future of cloud
Due to the Asia-Pacific's heterogenous nature, countries are adopting cloud computing at a different pace, says the IDC's report. Regulations, lack of infrastructure and a pressing need for relevant IT skills all hamper the deployment and adoption of widescale cloud adoption, according to IDC.
In the near future, large countries like China and India are projected to spend the largest amounts on tech in the region. China's tech market will continue its shift from hardware to software and services, says the Forrester research. China's tech market spending is forecasted to grow at 7 per cent in yuan terms, and adoption of cloud computing will reduce the need for capital expenditure and business technology will ramp up significantly as China's traditional industries learn from the media giants like Tencent, Alibaba and Baidu. Chinese firms will increasingly rely on big data and Internet of Things (IoT), and technology service partners will continue to reap the benefits from increased tech adoption, says Forrester.
Cloud computing should feature heavily in any enterprise's goal of international expansion. Reaching new markets demands flexibility and agility to react to changing environments, and cloud computing is a viable option to achieve that goal. Companies can leverage the security and scalability to keep their businesses humming in these uncertain times, where the only constant is change.
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