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Oracle News | February 25, 2016

Why Companies Are Making the Journey to the Cloud

By: Michael Hickins | Director of Strategic Communications

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Times are tough, and companies are searching for answers. Increasingly, they're turning to the cloud, a technology platform that allows them to react more spontaneously to global economic events and the new normal of digital disruption, razor-thin margins, and the demands of a more fickle generation.

Oracle CEO Safra Catz recently said it best: "Today with modern cloud applications, we finally have the technology that's compelling [both] technically and from a commercial point of view. We have the potential of doing more and spending less doing it."

While in India earlier this month, Catz said Oracle—like many of its customers—is heeding what she called "the call to the cloud" because of the clear economic and business benefits. But companies must also consider their existing investments, complex software customizations, and business processes when planning their cloud moves, she said.

So what are some of these changes companies are making, and why?

  • KBBO Group, a private equity firm based in Abu Dhabi, is using Oracle ERP Cloud to standardize financial reporting across ten of its portfolio companies. Not having to spend most of his IT resources on maintenance of aging systems was compelling, says the firm's IT director, Samir Mayani. "Because, if IT has to spend 70% of the time managing this non-value-added task, then where is IT supporting the business?" he says.
  • All Nippon Airways reconstructed its entire customer experience process using cloud services. "We started to revisit all of our services, and how we communicate, with the customer at the center," says Sammy Aramaki, vice president of innovation and IT strategy.
  • Abu Dhabi-based oil and gas retailer ADNOC Distribution is supporting a significant expansion and diversification of its business with a range of cloud services, including Oracle's Java, Database, and Primavera project management services. "We ensure that the return on investment and the return on value are well calculated and brought back to the business," says Awad El-Sidiq, senior database administrator and enterprise architect.
  • Iain Patterson, CEO of common technology services for Government Digital Service, a UK cabinet office unit, says Oracle's new UK-based platform-as-a-service offerings will help government departments abide by the federal "cloud first" policy, which requires them to buy IT products and services under the cloud model unless they can prove an alternative is more cost effective. "Significant supplier investments such as this support our strategic ambition and ultimately better value and better services to the taxpayer," Patterson says.

One thing is clear: Cloud apps offer a glaring speed-of-innovation advantage over conventional software, letting companies add new software features every few months, compared to every three to four years with software maintained on premises. In fact, this speed of innovation is the single most important benefit companies get from cloud software, according to Steve Miranda, Oracle's executive vice president for applications development. The much faster cadence of cloud innovation is much closer to the speed of business—and to today's customer expectations for change.

There are other cloud advantages besides speed of innovation, of course, such as lowering a company's total IT operating costs by freeing IT staffers from having to deploy, patch, and support on-premises apps. But "speed and the need to innovate with applications is much more important," Miranda told a gathering of business technology leaders at a recent Oracle CloudWorld event in New York City.

Much of this speed is fueled by PaaS, which allows businesses to extend cloud applications that by definition can't be customized. Oracle CEO Mark Hurd has said that as cloud platform, software, and infrastructure capabilities mature and customers get more comfortable using them, 100% of at least one common business IT practice—development and testing, or so-called dev-test—will take place in the cloud within 10 years. Hurd sees the cloud potentially delivering $150 billion in cost savings to businesses, as companies pay only for the resources they need and use.

A new data center in Abu Dhabi will enable Oracle to better manage service levels and respond to local customers that, for a variety of reasons including data governance requirements, need their data to be in close geographic proximity.

Times are indeed difficult and uncertain, but at the very least, the cloud platform is proving itself an able partner to companies that choose to accelerate their speed of innovation.

Director of Strategic Communications

Michael Hickins is a director of strategic communications at Oracle. He is the former editor of The Wall Street Journal's CIO Journal.

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