Business benefits from leveraging the Cloud

October 2018

Hands holding mobile phonesIakov Fedoseenko MBCS, Technology Strategy & Architecture Consultant at Arup Digital, explores the business outcomes that cloud technologies can bring to the industry.

From retailers to financial institutions, many companies are leveraging the Cloud to be ahead of the competition and deliver the best customer experiences. Some companies are moving all systems and platforms to the Cloud, whilst others are just moving bits and pieces and keeping the rest in house.

Although there are different Cloud Service Models, such as Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS), one thing they all have in common is an opportunity to leverage the benefits by using third party global hosting providers. For instance, software vendors such as Oracle provision Cloud Financial Systems for global operators in multiple languages and different currencies which provides an ability to save costs on software maintenance and constant deployment of new services.

So, what business outcomes could Cloud technologies bring to the industry?

1. Cost saving
With Cloud computing, companies can turn a large upfront capital expenditure into a smaller, ongoing operational cost. There is no need for heavy investments in new infrastructure. In addition, the unique nature of Cloud computing allows organisations to pick and choose the services on an on-demand basis (also known as “pay as you go”).

As an example, National Rail Enquiriesi (NRE), who provides a centralized online service for Train Operating Companies (TOCs) in the UK, recently moved their IT infrastructure from on-premises to Cloud. Using AWS enabled NRE to save about 20 percent in infrastructure costs. The move has also helped NRE transition from a long-term CAPEX model to an OPEX model. The AWS pay-as-you-go model was a benefit to the company, enabling the company to pay close attention to its costs to handle them as effectively as possible. Using Cloud also makes it easier to provision and make changes, so NRE gained the flexibility to react dynamically to demand.

2. Business continuity
In addition, the industry’s leading Cloud providers encrypt data, monitor system activity in real time, employ a host of software and hardware tools to defend their networks and back up user data. The enhanced risk management and security capabilities offered by Cloud providers are far superior to in-house applications. As a result, organisations can better meet customers’ demands for flexibility and the latest capabilities, while ensuring risks are appropriately identified and managed through end-to-end security.

Look at Vancouver International Airportii, one of the world’s busiest airports, which is served by 55 airlines. Their Innovative Travel Solutions team uses AWS to provide high availability and security for its BORDERXPRESS Automated Passport Control solution and to easily scale the solution to accommodate expansion to new airports. The organization runs the solution on AWS, using multiple AWS Availability Zones for redundancy and taking advantage of AWS CloudFormation templates to refresh virtual servers and test images before sending them to production.

3. Automation
Furthermore, with Cloud technologies, companies can streamline and automate processes more quickly and easily than ever before. Such automation reduces the likelihood of costly human errors, enabling banks to manage higher volumes of transactions while reducing unnecessary spending.

In 2011, Millimaniii, the leading global provider of actuarial products and services to the life insurance industry, initiated the development of the Integrate solution, a ground-breaking approach to actuarial modelling and reporting. The solution aimed to address the increasing cost of grid computing and to free actuaries to focus their time and talents on analysing results.

Integrate was built by using Azure as a platform-as-a-service (PaaS), and delivered to Milliman clients as a turnkey software-as-a-service (SaaS) solution. It takes advantage of Microsoft Azure for complex computational tasks, and leverages services such as Azure Data Factory and Azure HDInsight to automate extract, transform, and load (ETL) processes and crunch big data.

4. New offerings
Improved security and cost savings are not the only benefits that can be achieved by leveraging Cloud. Cloud computing makes new products and services easier to develop and launch, which is particularly important for start-ups.

Lewolangiv is an online learning resource, specializing in spoken-language learning, for Spanish speakers looking to learn English. While building their app, the Lewolang team set out the essential infrastructure specifications most important for their project.

As a new product, Lewolang would need to scale to meet unknown levels of demand in the most cost-effective way possible, while gaining visibility and building brand awareness. Denisa Ivanoiu, Marketing and Communications lead at Lewolang, confirms, “As a new company starting from scratch, we could not maintain an on-premise platform to support performance at peak hours. Google Cloud Platform scales automatically according to use with competitive, pay-per-minute pricing that makes it easy to plan resources in the short- and long-term.”

5. Compliance
Many companies have been relying on manual processes for decades, however, these processes are not flexible neither efficient enough to help organisations navigate through the current compliance landscapev. The flexibility offered by the Cloud hosting providers gives another great advantage, as its agility and modern architecture allow organisations to easily adapt to ever-changing compliance regulations. For example, banks must be able to quickly modify their documentation and processes as new regulation is introduced.

Here, Oracle Financial Reporting Compliance Cloud Servicevi could help customers consolidate the process of documenting and assessing business practices to satisfy financial reporting regulations, such as Sarbanes-Oxley (SOX) and equivalent laws, around the world and in the public sector.

Another example, Monzovii, an UK digital bank, has grown from an idea to a fully regulated bank completely on the AWS Cloud. A bank that lives on your smartphone, Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. One of the initial reasons Monzo chose AWS was the need to comply with banking regulations. In November 2015, the Financial Conduct Authority (FCA) - the UK regulatory body that awards banking licenses - released guidelines for banks using off-premises Cloud services.

Partly because the FCA had awarded a contract to AWS for its own needs, Monzo decided AWS had the credentials to host an FCA-regulated workload. Monzo’s CEO Tom Blomfield confirms that “AWS differentiates itself as a forward-thinking Cloud vendor that understands enterprise concerns and works with regulators and customers to launch new features. To allay regulators’ fears, it has services such as AWS CloudTrail, which produce AWS API call logs to enable security analysis, resource change tracking, and compliance auditing.”

6. Scalability
Finally, the Cloud gives companies the ability to quickly scale compute capability up and down according to constantly changing market trends and customer demands. Utilising Cloud technology is a very efficient way to achieve this scalability at pace: 65% of organisations noted scalability as their top reason for initially adopting Cloud services, and several organisations have already realised this benefitviii.

Shazamix is one of the most popular mobile apps in the world, with over 1 billion downloads since its launch in 2008. Users Shazam over 20 million times each day, trusting Shazam to match the songs in seconds to its database of digital fingerprints. On occasions such as the Super Bowl or the Grammy Awards, Shazam’s dedicated GPUs face peaks of traffic requiring server capacity well above normal levels. That is why Shazam now avoids wasteful over-provisioning by auto scaling instances on Google Cloud Platform.

The company had been running on their own bespoke non-elastic GPU infrastructure for about five years and had begun looking at ways to improve the flexibility of their deployment processes. Rather than a lift and shift from their inhouse infrastructure to Google, the company could build something from scratch in a little under two months.

In modern world, it is clear what business outcomes can be achieved by moving to the Cloud. Using third party global hosting providers allows for significant reduction of costs, enhanced security and resilience, more standardisation and compliance. Cloud technology also provides significant flexibility and scalability. Hence, the question now is not if your organisation should move to the Cloud, but when.

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