Cloud Computing has been a key part of most interesting business strategies over the last decade. It has also been critical in bringing high end compute power to individuals around the world (Cloud services enable most highly recognizable services and apps, from Uber to Zoom and most everything in between). But what will come next? This special report offers a glimpse into the future of this trend meant to inform your business strategy.

The History of Cloud Computing:

The term Cloud Computing had long been a part of the computer science lexicon, but it was transformed into a business model in 2006 when Amazon launched a new test service they called Elastic Compute Cloud. This and other services that quickly followed were described in a November 2006 Businessweek article as “Jeff Bezos’ Risky Bet.” Now 14 years on his risky bet has clearly paid off, ushering in not just a line of business for Amazon, but a market for every major IT provider globally. The size of the cloud computing market is estimated to be $300B, so it is clearly here to stay.

The rise of cloud computing also enabled companies which could leverage this new capability to deliver B2B services which can be consumed on demand via models like Software as a Service. This model is helping companies in every industry improve performance and agility while reducing the need for internal infrastructure.

The Cloud And Your Business Today:

Every business is different, but increasingly they all have one thing in common, no matter what the industry. They are all leveraging cloud compute!

For end users and executives, the delivery of cloud computing services is so transparent many may not realize the source of the service they are using. Services that once required space in a company datacenter can now be delivered via the cloud. Common cloud computing workloads include:

• Business Analytics
• Storage, Backup, and Disaster Recovery (DR)
• Application Development and Testing
• Data Management
• Supply Chain Management (SCM)
• Integration and Orchestration
• Customer Relationship Management (CRM)
• Enterprise Resource Management (ERM)
• Collaboration and Content Management
• Identity Management and Authorization
• Cyber Security

The Big Migration to the Cloud:

Most enterprises are already leveraging Cloud Computing for at least some of the workloads above, and most all have at least proof of concept work being kicked off assess how much of their core business computing needs can be migrated to the cloud. By core, we mean the type of application that is absolutely central to the functioning of the mission of the business. We believe the movement of core compute power to public cloud based services has really just begun. Over the next five years the confidence in cloud computing will grow and the migration of core compute capabilities to the cloud will accelerate.

Observations on the Cloud Computing Trend:

• Although it can cost additional resources to embark on a cloud transition effort, in most cases after initial outlays there are significant cost savings. Commercial Cloud Computing providers are widely known for their revising costs down and we see that trend continuing.
• A new consensus is forming regarding security and cloud capabilities. Well engineered clouds can be far more secure than the typical Internet connected enterprise. A favored technique for enhancing enterprise security in a way that supports cloud computing models is a Software Defined Perimeter (SDP).
• Agility of the Cloud Computing model is helping innovators innovate and developers develop, and in many cases this is the greatest benefit of the approach. Agility in service to mission and business needs is far more important than cost savings.
• New forms of Cloud Computing include ultra-small data centers which can function as internal clouds. Versatile small form-factor data centers can be bought in containers and put anywhere.
• Cloud plus IoT = Fog Computing, an architecture of multiple collaborative end compute devices. The term Fog Computing might never take off the way Cloud Computing will, but consider the new model regardless of what you call it.
• Interesting observation: Over the last decade it seems the edge was moving to the datacenter then the cloud. Now the cloud is moving to the edge. It is doing so by devices like Amazon’s Snowball Edge, which brings the power of EC2 compute to remote locations.
• Amazon can be rightly credited with kicking off the current wave of business focused cloud computing with Jeff Bezo’s Risky Bet.

Cybersecurity and Cloud Computing

The threat dynamic around cloud computing includes a continual search by adversaries for ways to penetrate and exploit at scale. It can be far harder for an adversary to break into a well-engineered cloud provider, but once they get in they can strike gold! We encourage every enterprise to make maximum use of cloud capabilities but do so in ways that use smart encryption and well-engineered identify management and authorization.

Open questions decision-makers should track include:

• Will regulatory roadblocks to Cloud Computing for core compute shift over time? How can enterprises convince regulators that cloud is a better way?
• Will the big cloud providers continue to enable interoperability between their systems?
• How will nations settle data retention disputes opened up because of cloud computing?
• How do we move compute across tiers (between enterprise data centers and public clouds, for example)?
• How do we transition from legacy compute to new cloud models?
• How can we reduce the ability of adversaries to use cloud computing capabilities?

Due Diligence Assessments and Cloud Computing

The trend of Cloud Computing is an increasingly important element of corporate Due Diligence since it is so disruptive business models.

• On the sell side: Firms should ensure their use of cloud services is done securely and that mitigation strategies are in place for issues. Doing this before sale can make a big difference in how well a firm will be valued.
• On the buy side: Buyers should pay particular attention to the use of cloud services to ensure a well thought out architecture that mitigates risks. External and independent verification and validation of security policies and practices should include a review of the cloud architecture, as well as the degree that the target is complying with appropriate compliance regimes.

Strategically, the acquisition of technology firms is an art requiring assessment of how unique the capability is and how much in demand it will be in the market. We provide due diligence consulting via our parent company, OODA LLC.

Additional insights to inform your business strategy in an age of digital transformation can be found on our OODA Network Resources site