The impact on business of the COVID-19 pandemic has been to bring into focus the fact that agility and speed are the key attributes needed to ensure continued success. Few in tech, apart from a few individuals like Bill Gates, foresaw the likelihood of such a significant event that would cause entire industries to look at adopting new business models and ways of working so quickly.
Cloud computing has enabled organizations to quickly adapt to the new reality
One of the core value propositions of cloud computing is its ability to be flexible, and to scale up and down the resources (and associated costs) required in delivering IT. The speed with which COVID-19 has changed the lives of over 33% of the global population caught many organizations by surprise; however, despite the upheaval, some businesses spotted opportunities to pivot business models to a new way of working. The challenge for many organizations has been the ability to make the changes fast enough.
The one key learning that organizations will take from COVID-19 is how they need to be both agile and fast in their response to changing business models, operating processes, or entering new markets so they can deal with any disruption. The key difference with the current situation is that it is not the infrastructure that is broken—as in network or computers—but that people that cannot get to a place of work, disrupting normal business operations. Cloud computing in the short term provides the ability for these organizations that are unable to pivot and remain operational, like airlines, to reduce operational costs, which is a big benefit in terms of managing cashflow. For other businesses, cloud computing will enable rapid growth. Online food delivery is one example, as the cloud improves IT capacity to take more orders, plan more routes, etc.
When the world emerges from this pandemic it will look back and assess the viability of the way it uses technology to enable it to continue to operate, innovate, and save money. The hyperscale cloud providers will face both short- and medium-term challenges.
In the short term, organizations will be looking to adopt a strategy for business resilience in terms of using the cloud. This will mean many more organizations will be considering the tactical use of cloud computing, such as to support home working, remote working, and improving the organizational digital literacy.
In the medium term, organizations will evaluate cloud as a strategy for business innovation, more than just as a way of reducing operating costs, as organizations will be seeking increased agility and speed. While the cloud delivers agility and speed in terms of IT capacity and capability, it was unable to deliver these benefits to many organizations in terms of the business transformation necessary to adopt new operating models. The future for hyperscale cloud providers will be how the cloud can provide the platform for businesses to connect and disconnect the different ways in which its core systems can be used to meet demand from new channels.
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