Artificial intelligence, blockchain, Work 4.0 - one digital trend is currently coming on top of another. But one topic almost seems to go by the board: the cloud. And yet, change is currently in full swing. Some companies have already completed their cloud journey, while others are carefully taking one step after the other. When it comes to implementing the cloud in everyday business, how far are German companies and what do they think about using cloud applications? We have taken a closer look for our study “Communication 4.0 – Communication and Collaboration in the Cloud” and interviewed some companies.
Cloud = Industrialization of the IT?
The comparison may be bold. And yet this sentence says a lot: about the importance that the cloud has for many companies today; about the opportunities it offers them; but also about the challenges companies have to overcome. "For me, the cloud is the industrialization of IT," says Ralph Müller of Bucher + Suter AG. When thinking of the enormous upheavals that industrialization brought with it during the second half of the 18th century, it is all too easy to imagine the disruptive force that the cloud may spark in the business world.
The cloud is not a new trend. The topic has dominated the IT strategies of a wide range of companies for years. Studies such as “Cloud Monitor 2017” by Bitkom Research or the IDG study “Cloud Migration 2018” illustrate the transition in thinking that has taken place here. Three out of four companies are already using services from the cloud or are busy moving services to the cloud. Particularly in small and medium-sized companies in Europe, the usage of offers from the cloud is on the rise. These results confirm the assessment of numerous providers that report a steadily growing interest of SMEs in the cloud.
A closer look at Germany in particular reveals a similar picture. In 2015, only 38 percent of the companies polled used the private cloud, while two years later their number was at 51 percent. And the acceptance of the public cloud is also increasing, even though at a slower rate with 26 and 31 percent in 2015 and 2017, respectively.
The study: Communication and Collaboration in the Cloud
We wanted to understand what these figures mean. Therefore, we carried out an explorative qualitative meta-study. Our goal was to understand the status quo of the development and to identify drivers and obstacles of the transformation process in companies and public organizations. The study explores the organizational context of this development: are technical innovations or changes in work processes the reasons for the transformation?
For the study, 15 experts from Germany, Austria, Switzerland and Luxembourg were interviewed, among them mostly executives and technology managers from banks and insurance companies, contact centers, public institutions and the control centers of public safety organizations. The survey was conducted between October and November 2018 by phone.
The result: The cloud has long arrived. There is hardly a company that does not have the cloud on its radar. Even though not all companies currently use cloud services or have a clear strategy, it is obvious that the cloud is a trend that cannot be stopped. Even security concerns do not hold up the process, but they do play a decisive role in shaping it.
Technical progress drives companies to the cloud
Let's first take a look at the reasons why the cloud has become so popular in recent years. One of the major factors certainly is the enormous pressure to innovate that companies have to cope with today. Furthermore, the persistent technological progress also pushes companies towards the cloud.
Companies are permanently challenged to market novelties to stay ahead of their competitors. The pressure of digital transformation is increasingly bringing with it a set of new technical questions. However, not only technical considerations must be taken into account when thinking about opting for the cloud but also strategic ones due to its impact on speed and competitiveness.
The answer to the question “cloud or no cloud” can make or break a company, especially in certain industries. Particularly FinTech and InsurTech increase the pressure to digitize for major banks and insurance companies which are now ramping up their efforts in defining a cloud strategy to grant them more flexibility and scalability. Young market participants usually do not question the cloud in communication and collaboration since they have grown up with cloud solutions.
Corporate communications and collaboration are also seeing a marked transformation. Mobile devices, mobile apps, social media, and software collaboration tools are reorganizing internal communication to boost customer loyalty. This development is driven above all by the pronounced trend to work away from the office. “Having access to your data and documents anytime and anywhere is becoming the standard more and more,” explains Edwin Nanko of the savings bank Sparkasse Gifhorn-Wolfsburg.
Cloud als Business Enabler
As already indicated: The introduction of a cloud can help companies in many ways. The following reasons have been mentioned repeatedly in the interviews carried out for the study:
- Unrestricted quick access to data
- Increasing complexity of data
- Increased efficiency
- Lower costs
- Relief of internal resources
Scalability, i. e. to be able to easily gear services to changing needs, is a deciding factor for many companies, too. As a result, the amount of storage space, computing power, and the number of software packages can be selected accurately and adapted to actual requirements at any time.
“Financial service providers are beginning to see the cloud as a business enabler because the right cloud platform allows them to work much more efficiently and market innovations faster”, says Martin Moeller of Microsoft. Also companies in the financial sector are beginning to recognize that cloud services increase efficiency. The fact that cloud services allow working anytime and anywhere is a clear pro here.
Location is a decisive criterion when opting for or against the cloud
New technologies cause new problems. This is also a reason why some companies consciously opt against introducing a cloud solution. Three concerns prevail:
- Concerns regarding data security
- Insecurity regarding legal regulations
- Difficulties in integrating it into existing in-house solutions
Challenging aspects are the high complexity and uncertain processes. Adequate operating models, user management strategies, and efficient coordination measures must be defined for the cloud services. Those polled saw a challenge in terms of implementation as tried and tested processes are bound to change and these changes must be addressed at an early stage instead of at the last moment when integrating the cloud.
And especially in the financial sector, legal and regulatory requirements, compliance and data protection are on top of the agenda. Particularly here, it is absolutely imperative that cloud providers meet these requirements and are transparent and clear about what they offer if they want to be able to stand a chance in winning new customers. Compliance with the European General Data Protection Regulation (GDPR) is a standard requirement for almost all companies.
“Saving and transferring confidential content is extremely sensitive”, confirms Mathias Himmel of Deutsche Bundesbank. “Cloud providers should thus be examined closely when it comes to security mechanisms, data transport, data storage, data administration, and data storage location.” And indeed, the location was a decisive criterion as well. When the cloud provider had its business location and data storage servers in Germany or in the European Economic Area, then this created trust even across European borders.
Security is a priority for many cloud service providers
However, it can be noted that companies are increasingly shifting critical applications to the public cloud as well. After all, today there is a wide range of standards regulating specifications in terms of security, data protection and legal provisions. Only if the cloud provider fulfills these standards, can customers be sure that their data is processed and archived correctly and in accordance with the regulations.
The bottom line is that in many cases a cloud architecture offers more options to do justice to complex security issues than an on-premise solution. Thanks to the extensive experience of cloud service providers with regard to standards and official requirements as well as to their lively exchange with regulators worldwide, security has a higher priority for cloud service providers than this may be the case with other data centers that have not specialized in the cloud.
There is no way around the cloud!
The pressure to innovate and the persistent technological progress push companies to introduce cloud software. The results of our study clearly show that companies have not only recognized a trend here. Many have already taken the next step by defining a cloud strategy which specifies the cloud services and the cloud technology that will be used for specific application cases.
The time has come to think about revising existing IT structures. To succeed, a general disposition and openness for the cloud - not least on behalf of the chief-level in the company - is absolutely indispensable. In the end, we must not forget that the implementation of a cloud strategy is a project that considerably affects the way employees think.
Now, what does this imply for software providers and system integrators? The unrestricted availability of information as well as multi-channel communication and services have long become an integral part of everyday business. Why should customers want to make compromises when it comes to flexibility, scalability and user experience? Simply gear your offers to their needs and help them to successfully master their challenges. Make sure not to be left behind pondering alternatives: the train is rolling. Those who do not act now, risk nothing less than the future and sustainability of their company.