As we move our workplaces from office to home, the growth of cloud computing has become more apparent than ever. But do we truly understand what cloud computing means? Are we as ‘cloud-savvy’ as we think we are? And those huge growth numbers, are they what they seem to be? Vishal Parpia, co-founder of CloudCover, breaks it all down for us.
Without a doubt, cloud computing has come to the fore in the wake of the Covid-19 pandemic.
Where many companies — especially small and medium enterprises (SMEs) — were sceptical about the capabilities of cloud before, they now turn to the virtual as physical connections, supply chains and legacy systems break down. After all, these companies have little to no choice now, as workers switch to home office and the need for a physical office space slowly diminishes.
Forbes recently reported that the Covid19 crisis has spurred increased cloud spending, according to a survey of 750 executives from Flexera, an American computer software company. More than half of those surveryed (59%) said their cloud usage will be higher than what had been planned before the pandemic hit.
If anything, it was reported, cloud is seen as a life-saver for businesses through this period of uncertainty, with employees scattered across a corporate diaspora. “All of a sudden, all doubts about the cloud model — especially with security and hidden costs — evaporated,” the article stated.
Closer to home, Channel Asia, a tech news portal with an Asia Pacific and India focus, writes: “Covid-19 has accelerated customer demand for digital technologies to ensure resilient enterprise business operations across Asia Pacific, resulting in cloud-based offerings outshining traditional products.”
The report adds: “Key verticals like banking and financial, healthcare and manufacturing sectors are witnessing a surge in demand for cloud-based solutions, owing to features like remote datastorage capabilities and provisioning of privileges for hosted applications.”
Yet, what does it really mean to migrate to cloud-native applications and processes? Where do you even start?
Vishal Parpia, co-founder of CloudCover, says “cloud” — as with all good buzzwords — tends to be misused, which makes understanding what it really means rather “muddy”.
At its very basic definition, cloud computing is the delivery of computing services — including servers, storage, databases, networking, software, analytics and intelligence — over the Internet (“the cloud”). What this means is that a business is able to access, on demand, all its computer system resources, especially data storage and computing power, without direct active or manual management by the user.
“Cloud in general is such a vague term. It feels like everything these days has ‘cloud’ in its name,” he says. “How can you say that running thousands of servers for a company like Uber, is the same as a small company setting up its email accounts? Those don’t even sound like they’re in the same league, so why would they both have the same name?”
CloudCover, a cloud-native software-as-a-service (SAAS) company, received a majority investment from Temasek-owned ST Telemedia (STT) recently, and has helped tech “unicorns” such as Tokopedia, Bukalapak and Hike embrace cloudnative technologies. CloudCover also has official partnerships with AWS, GoogleCloud and Microsoft Azure.
Having co-founded CloudCover 10 years ago, and having been in the tech industry for over two decades, Vishal knows full well the challenges that many companies face in understanding cloud and migrating their businesses to it.
However, he feels that companies should approach cloud computing differently. Instead of trying to take it all on by themselves and trying to figure it all out on their own, companies should start with seeking the services of experts. “The way to think about [cloud] is: leave it to the experts. We cannot run a data centre better than Google, so let them do their thing. Let them deliver the quality and the value that you look for from those services. And you get to stand on the shoulders of giants, and you get to take advantage of what these massive companies have invested in from the perspective of engineering and get the best of their services,” he says.
He adds: “You don’t have to spend capital to acquire all of this hardware. You don’t have to worry about somebody taking the network cable out, and all of a sudden your network is going down. Those problems kind of go away if you start consuming the cloud in this fashion. So this really takes away some of those bottlenecks and some of those hindrances [to cloud adoption].”
The only question for companies to ponder, then, is how much control they want over their systems.
“At one end of the ‘slider’ is Infrastructure-as-a-Service, where a company like Google or Amazon is running your servers for you inside the data centre, and you’ve got a lot of control. At the other end is SAAS, where you just use the software to achieve the outcome you want and you don’t need to worry about anything else.”
A rudimentary example of what this means, Vishal shares, is how email service has changed. He says: “Gmail is a great example of this. Some years ago, if you wanted to have an enterprise-grade email, you’d use Lotus Domino or you’d use Microsoft Exchange. You’d have the servers, active directories, and various other components you needed to manage, and a whole set of folks whose job it would be to manage those components.” “Now, you just use Gmail,” he explains. “Or Google Docs, where you would not have to worry about where it’s saved or backed-up to.”
He adds: “A lot of people miss that the cloud is not just about changing where you work, it is also changing how you work.”
Behind the numbers
At first glance, it appears that demand for cloud computing has grown tremendously. After all, the global cloud computing market size is expected to increase from US$275.2 billion ($377 billion) in 2019 to US$625.5 billion by 2027, at a compounded annual growth rate of 18.8%. Analysts predict that the increased reliance on the cloud in a lockdown will only quicken an increase in IT spending.
Sure, growth has rapidly accelerated for cloud computing since Covid19. But Vishal says that while cloud computing has indeed reached an extremely high penetration rate — 80% to 90% of companies are using some form of cloud service, whether it is Zoom, email or enterprise software – the true adoption of cloud is not just about using it.
“That’s not really an accurate depiction of how much cloud adoption has actually occurred. It’s just how much it’s penetrated. When you look at it as a percentage of say, an IT spend overall, you’re talking about it being less than 25% of a company’s total IT budget,” he says. “What I’ve seen is, companies are still spending a substantial amount of money on premises, legacy applications and servers. And a large portion of that is actually on the chopping block in terms of when the next refresh occurs.”
And here’s the crucial bit, says Vishal: There are services that companies in Singapore thought would never be needed to be accessed outside of the office space.
“All of a sudden, these services became crucial to access from remote locations. [For most companies] there’s a virtual private network (VPN) tunnel into the office internal networks, which allows you to access them outside of the office by making it appear like you’re inside the office,” he says.
“All of those systems only expect a very, very small fraction of the workforce to actually be using them remotely. And so, [when Covid-19 hit,] the very first thing that needed to be scaled up were those VPN systems, because all of a sudden, the entire company had to use the VPN to get ‘into’ the office,” he adds. “And that adds additional layers of complexity because now you need to go buy more hardware, you need to rack-and-stack it inside the data centre, and worry about getting the appropriate amount of space for it.”
Vishal says: “In effect, we drew red circles around all of them because all of a sudden, certain parts of the workflow just broke down. And that sparked a massive growth spurt — you’ve got people buying G Suite, you got Zoom getting a massive amount of traction, or [work productivity tool] Slack getting an uptick.”
But he observes that after that initial spurt, the growth numbers within the industries themselves are contracting. “The broader economic reality is setting in and spending is down, because obviously people have to tighten the belt and the cloud is not immune to that kind of behaviour,” he explains. However that does not mean change isn’t coming, or that it isn’t coming fast.
“I think the biggest thing that’s going to happen is, as people move forward and get all of these systems online, it unlocks this big change, which is that you can start seeing all of your data in one place. And the insight that you get from having your entire business inside the cloud is that you start collecting and analysing information from all of the different parts in one place,” says Vishal.
Another change he sees is the emergence of inter-operable systems (such as your enterprise software or your customer relations management or CRM software) that share information with each other, instead of a rigid, formed and inflexible system.
“It’s like you have these silos of information that are reusing interoperable formats, you can transfer data between them. And that allows you to just move a lot faster,” he says. At the end of it, Vishal says, the reality now is that the way interaction happens — whether within an office or between the company and the customer — has changed. “Unless you’re in an area like manufacturing, for example, the reality has changed in terms of how your customer interacts with you. The retail experience is not what it used to be, for example, and reaching your customer is changing even faster than it was before,” he says.
With the pandemic, things are not likely to go back to the way they were before. Vishal says: “Some changes are going to be quite long-lasting. Every single brand has to start thinking about how their customers interact with them directly from these platforms. And that is a big, big change, and is not straightforward.”
Vishal asserts: “Ultimately, what leads to the long-term survival of a business in situations like this, it turns out, is how quickly they can evolve. And in this case, the evolution that was necessary was a technical one.”