The Expert view: Digital transformation and the cloud

The Expert view: Digital transformation and the cloud

One of the drivers of digital transformation is an ongoing data explosion, said Andrew McCreath of Equinix, opening a Business Reporter Breakfast Briefing at London’s Ritz Hotel. Not only are many businesses struggling to cope with this data, they are also unprepared for what is coming as the Internet of Things continues to grow.

Some businesses are turning to the cloud to help store and manage data; others are pursuing a cloud strategy to meet another need. But all frequently run into obstacles. While they should be looking for their “digital edge”, Mr. McCreath said, they often struggle simply to connect cloud services to their existing systems.

Cloud obstacles

In a show of hands, every attendee agreed that their cloud strategy is not where they want it to be. One attendee, from the automotive sector, said that a big problem was long-serving staff who are resistant to changing their working methods.

Others had the opposite problem: staff who are so used to innovative technology in their personal lives that they expect their work tools to be as good. The consumerisation of IT leads people to use services such as Dropbox for work projects – because it’s worked well for them in their personal lives – without thinking about how the service will connect with existing company tools. Integrating it becomes an IT headache, and in some cases a non-starter due to the Enterprise requirements around security, control and risk.

Where companies grow through acquisition the issue was around the difficult in applying digital transformation strategies as the newly acquired companies because their tools are at varying states of sophistication. They face a choice between trying to integrate multiple services and technologies or migrating everyone to a subset of them and then upskilling staff.

Legacy software and solutions bring a similar problem. A company might find a new startup with a cloud service that will increase efficiency and reduce costs, only to discover that it won’t integrate with their legacy systems or operate at the scale they require.

The final obstacle is financial. Cloud services typically count as operational expenditure (OpEx), rather than capital expenditure (CapEx) and many organisations still do not have financial structures to switch their spending.

Data challenges

Many businesses want to keep all their data because it might be useful later – an attendee from the oil industry said his company had gained useful insights from applying AI to data that is more than 100 years old. For most, however, the issue is around how to effectively manage such high volumes of data and mine it in a way that is usable.

Exacerbating this is the fact that speeds of data transfer will have to increase. Smart cities, self-driving cars and delivery drones, to take a few examples, will generate and share substantial amounts of data that will have value only if it can be exchanged and analysed in near real time. This creates a need for rapid data processing, some of which will have to be done by the device itself – what’s known as edge computing.  Moving data from onsite and silod estates to new Data Hubs which are in close proximity to the Cloud is seen as a clear advantage to those requiring data analytics at the edge. The performance barrier is eliminated when considering an Interconnection strategy between people, locations, clouds and data.

The picture is complicated – and in some cases helped – by the recent arrival of GDPR. On the one hand, companies are still trying to figure out what data they are obliged to share. On the other hand, GDPR has made many businesses clear out data which they don’t need to be keeping.  While the premise of data security and accountability is nothing new, the implementation of GDPR recently has caused many organisations to rethink their approach to data management and storage, asking themselves questions like “do we actually need it”, and “how long do we need it for”.

All of those present were interested in how blockchain technology might affect their digital transformation and cloud strategies, though few had personal experience of implementing it. What attracted delegates to it is the ability to simplify a process of data collection, among multiple sources, with the assurance that the resulting ledger would be immutable. One attendee described it as the digital equivalent of a security tag on the back of a truck.

Meeting the challenges

There is no magical solution for integrating cloud services – most users said they were currently solving the problem with single sign-on and multi-factor authentication layers. Another attendee added that some cloud services don’t require much effort to integrate so IT is happy to support them. However, those that do add to the IT workload often just can’t be supported.

Some suggested that a drastic rethink of how IT is financed would help digital transformation and cloud-first strategies. Aside from the issue of CapEx versus OpEx, they argued that leaders within the business should have IT included within their budgets. This would diminish the perception of IT as a cost and incentivize business leaders to become more tech-literate.

Where the business and IT see eye-to-eye is that complexity needs to be removed from the environment. Recent studies show that PaaS and SaaS adoption will become significantly higher than IaaS due to the simplicity of the application being delivered, and the scale at which they can be deployed. The group agreed that convergence of new technologies-as-a-service would remove the dependencies on legacy systems, or applications built in a bygone era by their business. This, in conjunction with a cloud interconnection strategy would help eliminate unnecessary cost from running the IT operation, and further promote a DevOps environment to accelerate innovation for their customers.


The job of delivering IT services has long been a difficult one. The IT department is expected to provide secure, reliable and cost-effective services to users. Those same users, however, want easy access to the applications and information necessary to do their jobs and will often install software that they shouldn’t, bringing viruses onto the network or refusing to use technology they aren’t familiar with. The only solution is a strong culture that guides employee behaviour. The more companies can do to improve their culture, collaborate across departments (business and IT for example) and re-think their infrastructure, the more smoothly their digital transformation is likely to go.

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By Shane Richmond

Copyright Lyonsdown Limited 2021

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