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How are Organizations Capitalizing on Private and Public Clouds?

Guest Author

A recognized influencer in the consulting domain, PwC Partner Faisal Ghadially is TOGAF 9-certified in the Enterprise Architecture domain and author of Oracle Fusion Applications Administration Essentials. He has deep hands-on experience in Oracle Cloud, Oracle Database, Oracle E-Business Suite, and Oracle Fusion Middle domain. Faisal has earned industry awards, is a member of several advisory boards, and is a chairperson of user groups.

As explained by Faisal, cloud computing provides the flexibility needed to help businesses innovate and move quickly. Enterprises realize that cloud computing is now an essential competitive driver for their organizations. In its “8 Trends in Cloud Computing for 2018,” Unfold Labs included these predictions for market leadership: growth in cloud services (SaaS, PaaS, IaaS), increase in hybrid cloud solutions (cloud-to-cloud and cloud-to-on-premises connectivity), and serverless cloud computing.

With cloud-ready infrastructure—specifically engineered systems infrastructure that is built to be identical on-premises and in the cloud—the move to the cloud becomes quick and seamless, helping businesses focus on innovation rather than hardware and software. Faisal joins us to help us explore how enterprises can build the infrastructure and business layer of their systems to facilitate rapid innovation in the cloud. 

What’s driving organizations to consider working in the cloud?

A cloud platform lets organizations quickly dominate a market through rapid deployment, because capacity can be spun up for peak workloads and decreased when it’s no longer needed. A cloud platform also ends up delivering new services and on-demand capabilities “as a service,” which allows companies to move much faster than their competitors. What it boils down to is that companies are really looking for the cloud to become a critical driver of their new IT strategy and a fundamental, competitive differentiator.

What is the right way for companies to move to the cloud?

Organizations are eager to realize the benefits of the cloud. They want the agility, elasticity, scalability, security, backup recovery, and so on. But enterprises with well-established applications—ERP, supply chain, HR, etc.—can’t just flip a switch and say, “Okay, I’m now running in the cloud.” For those organizations, going to the cloud is a multi-year journey, typically with four or five major rollouts to migrate. They may need to integrate these existing applications by moving to platform-as-a-service (PaaS) or infrastructure-as-a-service (IaaS) to move from the data center to the cloud. Or they can upgrade with SaaS applications.

In either case, some mission-critical applications are likely, and correctly, going to remain on-premises, creating a hybrid approach and the best of both worlds. However, it’s essential that users be able to move seamlessly back and forth between on-premises and cloud applications. 

Once it’s been decided what applications you want to move to the cloud, you have to decide which are the best candidates. To do that, we follow the minimal viable product, or MVP, strategy. You look at your business functions and define self-contained capabilities that can be moved to the cloud. Then define the roadmap of moving larger capabilities in increments to the cloud. That’s the minimal viable product.

This approach works very well, because application users immediately see the value. Then you can grow to the next, larger division that subsumes the first one. These migrations typically start with finance-related functions. We move finance to the cloud, then look at areas like HR, order management, supply chain, and so on.

We step the organization to the cloud through MVP stage gates. Between each gate is a stabilization period. There’s a lot of change involved, so people need to feel confident in their first step before moving to the next.

Adding to your excellent discussion, Faisal, we can also say that mission-critical applications often remain on-premises. So on-premises infrastructure needs to support the transition to the cloud. This allows for a hybrid approach—the best of both worlds. ESG conducted a survey of enterprise customers for Oracle and found that 74% say it is critical or very important that their on-premises environment is equivalent to the public cloud.

Yes, you want infrastructure on-premises that is identical to that in the cloud, so you can support the transition to the cloud. You also want this infrastructure to be co-engineered so that all of the hardware and software are optimized to work perfectly with each other in the cloud and on-premises. This means as enterprises move to the cloud, they can follow this MVP strategy and move as much or as little to the cloud whenever they’re ready—and migrate their workloads between their data center and the cloud as needed.

What is the role of the cloud in encouraging innovation?

The cloud creates a powerful idea incubator by connecting or creating a community of developers. It provides the environment to deliver innovation on tap. People can publish concepts or innovations and others can pick up what makes sense to them. Then somebody else chimes in and says, “That’s great but it doesn’t work in this area … so I built this.”

I saw this viral effect in the Oracle Marketplace when uploading expense reports began. There was a flood of expense-report templates because everyone has a unique way of submitting expenses. That was great, because no one had to build something from scratch.

Additional innovation results from the ability of cloud-based service vendors to analyze how people use their applications and identify patterns in things users do. Based on that analysis, the community can offer guidance, like, “I see what you’re trying to do—85 percent of people did it this way.”

And when organizations migrate functions to the cloud, I’ve seen many cases where they realized new capabilities. They say, “I didn’t know we could do it this way. Let’s adapt our business process to adopt this new capability, because it will save us a lot of time and money.”

What’s the connection between blockchain and the cloud?

The cloud consists of an ecosystem of different enterprise clouds. Blockchain could become the pseudo-integration connecting the different elements in the ecosystem, with blockchain supporting the cloud rather than vice versa. Blockchain becomes a kind of integration platform. The promise is huge.

Whenever I say blockchain, the first thing people mention is Bitcoin. Bitcoin is simply one blockchain use case, but it’s a very small sliver of what blockchain can do.

Blockchain provides two things. First is the ability to keep an endless record of interest in a given business object. If my business object is an invoice, I can keep track of everything related to that invoice, including payments made against it, goods received, when they were received, where they are now, etc. An endless lifecycle of the invoice can be maintained with full traceability.

Second, blockchain offers me full and complete security related to an activity or event. The blockchain cannot be updated or changed unless all parties involved agree the change is true.

When you apply that in the broader enterprise domain, there are tons of use cases. In the supply chain of a cable box manufacturer, for example, I can treat that cable box as an object in a blockchain. The object could include all the parts in the box, contractual agreements assigned to it, customers who bought it, service or quality issues related to it. I know everything that ever touched that box. That is extremely powerful.

Apply the same concept to journals or general ledger. You suddenly have the ability for all parties involved to approve each transaction. The whole concept of what financial departments currently do at month-end close goes away because you are doing a real-time close every second with every transaction. You’re 100-percent reconciled with all your trading partners at the point when a change happens.

My opinion is that blockchain can have a similar impact as the internet. We evolved from client-server to internet-based and then e-commerce, and everything that’s happened since. Blockchain has the same scale of potential. Our ability to comprehend the uses of blockchain technology is the only limiting factor.

There will be a tipping point where a large vendor or customer is going to say, “I will now transact with you over a blockchain.” That would drive an entire ecosystem to change. For example, Walmart may say, “I can do my B2B transactions using EDI but am also offering a blockchain platform, and if you use the blockchain platform, I will give you a half-percent discount.”

I think it will evolve into private blockchains, where entire organizations adopt it internally for different areas of their business. Your employee could become a blockchain for example. That will lead to public blockchains where you’re essentially doing bank transactions and sharing health information outside the walls of an organization on a regular public basis.

What other breakthroughs do you see on the horizon related to the cloud?

A breakthrough I hope to see is a level of standardization across clouds. Organizations that move to the cloud typically feel they’re siloed and can’t move or change clouds. They want to have confidence that they could move from one cloud to another, just like you can move from an iPhone to an Android device with little effort. That might be a tipping point for more adoption.

What tips would you give enterprise IT leaders to help them develop an effective cloud-computing strategy?

First would be to see migration to the cloud as a journey, not a destination. It isn’t “Yes, I’m on the cloud,” and you’re done. The journey will ultimately lead to a lot of good things but appreciate each milestone. And build that journey on an infrastructure that simplifies and speeds the process.

Second, do not forget your people. Don’t just impose it and say, “We’re doing this.” It will require a big cultural change, so bring your folks in on it. Let them participate in the vision and direction of the change, and involve them in bringing about the change.

Third, embrace technology to communicate about the change. Engage people in a conversation comprising small bits of information delivered via social media. Everyone can see what’s being said and how the different parties respond to it. Encourage interaction and discussion regarding the change to ensure an effective implementation.

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