February 7, 2017 | Written by: Lynn Kesterson-Townes
Share this post:
The latest IBM Institute for Business Value (IBV) study, “Tailoring hybrid cloud,” confirms that organizations are increasingly turning to hybrid clouds to pursue new customers, reduce technology costs, access remote capabilities and facilitate innovation.
In fact, the study found that the four top reasons organizations are adopting hybrid clouds are to keep costs down while differentiating themselves in terms of operational efficiency, customer satisfaction and innovation.
Here’s why executives found those four things so important:
More than half (54 percent) of executives surveyed cited the most popular reason for implementing hybrid cloud: to reduce the total cost of technology ownership. Hybrid clouds can cut costs by taking advantage of the economies of scale that cloud data centers provide. Data centers offer lower costs for hardware, power, facility upkeep and infrastructure staffing. Instead of locking up funds in soon-to-be outmoded capital equipment, cash generated from business success can be reinvested directly into near-term profit growth.
Furthermore, when deciding which workloads should be moved to cloud, more than half of surveyed executives identified cost as their most important factor.
Improve operational efficiency
Tied for the second most popular reason for adopting hybrid cloud, operational efficiency was cited by 42 percent of respondents. Cloud enables organizations to quickly provision resources across an entire ecosystem to rapidly assemble tailor-made solutions for critical business needs. This can greatly reduce time spent on problem solving while enhancing the agility of enterprises in responding to constantly shifting market demands.
In the realm of IT, cloud enables operational efficiencies by optimizing the latest infrastructure, middleware and apps, rather than making do with subpar legacy systems. For example, during online financial transaction processing, the latest third-party cloud-based API service can be plugged in to verify user identity.
Enhance customer engagement
Cloud’s agile attributes enable faster time to market for new products and services to attract and delight customers. For example, retailers can use cloud to tempt consumers with tailored promotions customized to their unique buying behaviors. Healthcare providers can address patient concerns any time with virtual medical assistance. Insurance companies can become trusted risk managers by warning policyholders of incoming destructive weather and recommend preventive actions to proactively avoid insurance claims.
Moving to a software-as-a-service (SaaS) model helps organizations implement market-leading solutions quickly with minimal impact to existing infrastructure. The survey found that customer support is the top area that two-thirds of executives are targeting migrating to a SaaS model within two years.
Cloud adoption fosters innovation because it can transcend geographic, industrial, organizational and operational barriers. Cloud accelerates innovation by enabling quick prototyping of new ideas for fast experimentation.
Astoundingly, at least 90 percent of executives surveyed said their most successful cloud initiatives had already significantly or moderately achieved expansion into new industries, creation of new revenue streams, and invention of new business models.
Clearly, cloud has evolved from a technological platform to an integral part of business enablement.
To get started with hybrid cloud, business leaders can ask these questions:
- How strategically would you be using hybrid cloud?
- What is the optimal mix of cloud and on-premises IT?
- How effectively are you already scaling your business using cloud?
For more findings on how hybrid cloud can answer an enterprise’s unique needs, including more recommendations for getting started, read “Tailoring hybrid cloud: Designing the right mix for innovation, efficiency and growth.”