The SoftwareOne 2023 Cloud Report sheds light on the exciting growth trajectory of cloud adoption, projecting a robust compound annual growth rate [CAGR] of 22.5% between 2022 and 2027. This remarkable expansion mirrors the global cloud market’s evolution, fueled by the increasing adoption of cloud-based applications and services, the imperative need for scalability and agility, and the relentless pursuit of cost reduction in IT. In this transformative journey, organizations transitioning through various stages of cloud adoption can anticipate substantial cost savings and revenue enhancement, evolving from cloud beginners to cloud leaders.
Marilyn Moodley, SoftwareOne‘s Country Leader and Local Director for South Africa and Africa, emphasizes the advantages that businesses can reap during their transition to the cloud. Presently, tech leaders in South Africa allocate 1.1% of their revenue to cloud investments, a strategic move that yields significant benefits. They achieve an impressive 25% reduction in overall business costs while generating a remarkable 48% more revenue than their counterparts who are just embarking on their cloud journey.
Furthermore, cloud leaders enjoy numerous benefits such as enhanced scalability, increased business resilience, improved agility, a competitive edge in the market, better decision-making capabilities, higher customer retention rates, and an elevated corporate reputation. Undoubtedly, the key to optimizing the return on investment in the cloud lies in understanding the unique business case for each workload and adhering to best practices. By doing so, cloud beginners can strategically navigate their cloud migration journey and unlock their full cloud potential.
Fuelling the Cloud Boom in South Africa
The burgeoning cloud computing market in South Africa finds its primary drivers in mid-sized enterprises. These companies are determined to amplify their agility, responsiveness, and financial efficiency while simultaneously reducing their IT costs. To achieve these goals, they are increasingly adopting multi-cloud and hybrid cloud architectures. These approaches allow them to avoid vendor lock-in and cater to their ever-evolving demands for flexibility and scalability. Cybersecurity is a paramount concern for these enterprises as they venture into the cloud sphere. Organizations seek cloud providers that offer robust security solutions to mitigate risks and ensure compliance with stringent industry regulations.
Navigating the Cloud Landscape
Despite the enormous potential, the path to becoming a cloud leader is fraught with challenges and opportunities. One of the most significant hurdles is the scarcity of skilled cloud professionals. This shortage hampers organizations’ ability to proficiently adopt and manage cloud solutions due to a lack of qualified personnel.
Cost is another paramount issue in South Africa, surpassing rates in other regions. This can be attributed to various factors, including high internet bandwidth costs and a limited competitive landscape in the cloud market. Additionally, the absence of uniform cloud adoption policies and regulations complicates the legal and regulatory aspects of cloud computing, hampering industry-specific compliance. Cloud costs and visibility also pose significant challenges, with only 15% of organizations globally having a FinOps capability in place.
Discovering Potential in the Pitfalls
South African businesses can ascend to the echelons of cloud leadership by embracing transformative trends that bolster efficiency, growth, and innovation. Artificial intelligence [AI] and machine learning [ML], substantially enabled by the cloud, are profoundly reshaping the market. These technologies automate tasks, enhance decision-making, and catalyze efficiency and innovation, ultimately driving business growth. The proliferation of the Internet of Things [IoT] is also stoking demand for cloud computing. IoT devices generate vast amounts of data, which can only be efficiently analyzed and processed in the cloud, unveiling new revenue opportunities.
Evolving from Cloud Beginners to Cloud Leaders
To successfully evolve from cloud beginners to cloud leaders, organizations must craft a cloud strategy aligned with their business objectives. This may entail considering the adoption of multi-cloud or hybrid cloud architectures to bolster flexibility and scalability. Security is non-negotiable when embracing the cloud, and businesses should partner with a cloud provider capable of implementing and managing their cloud solutions, with a focus on driving continuous efficiency improvements.
Overcoming local challenges and optimizing cloud solutions requires adherence to six best practices outlined in SoftwareOne’s 2023 cloud report:
Actively Manage Cloud Costs: Employ practices and tools like FinOps to cultivate a culture of financial accountability through visibility and transparency.
Focus on Business Goals: Prioritize achieving desired outcomes over the technology aspect of cloud transformation.
Take a Structured Approach: Make decisions regarding application shifting and modernization based on business imperatives, establishing the correct priority order.
Develop a Culture and Talent for Cloud Success: Establish a center of excellence that emphasizes cloud training, governance, standard processes, and the widespread adoption of cloud best practices.
Select the Right Tools and Partners: Utilize a range of cloud service options and engage cloud providers to bridge skills gaps, leveraging ‘everything as a service.’
Put Cybersecurity at the Center: Assess and enhance application security before migration, and ensure that teams possess requisite cloud security expertise.
Additional Tips for Aspiring Cloud Leaders
Start Small and Scale Up Gradually: Migrate key applications and workloads initially, scaling up cloud deployments as teams become more comfortable with the technology.
Use Cloud-Native Applications and Services: Leverage cloud-native applications designed to capitalize on cloud scalability, elasticity, and pay-per-use pricing.
Automate Cloud Management: Automate tasks such as resource provisioning, security management, and performance monitoring to save time and enhance efficiency.
Measure the Success of Cloud Initiatives: Keep track of progress to ensure that cloud investments are delivering the expected benefits and maximizing ROI.