Investing in the Cloud is Now a Question of ‘How’ not ‘Why’

on July 2 | in Cloud | by | with 2 Comments

 

By Eric Hui, Director of Cloud, IT and Enterprise, Equinix, Asia Pacific

 

The mysticism and questioning around the relevancy of cloud investment has gradually evaporated. With the hype cycle of cloudification behind us, and the reality of demonstrable business benefits at our finger tips, the question has moved from the ‘why’ to the ‘how’. That is, how to make cloud more mainstream within the business.

New commissioned research conducted by Forrester Consulting on behalf of Equinix on data center investment sentiment across the region backs up what we already know – that investment in data centers is indeed, top of mind for most corporates.

There is however disparity across the region on cloud and data center investment strategies. Business confidence and growth plans vary widely across the region. For example, research found that the business outlook of organizations in Singapore and Hong Kong are less confident than their regional neighbours, punctuated by the potential effects of global financial market uncertainty. As such Singapore-based service providers remain cautious on investment with 33% still focussing on cost control. Overall however, the drivers of data center investments are issues surrounding disaster recovery and business continuity.

The most bullish are those clients that are actively investing in upgrades or expanding physical location – the lion’s share of activity here is in China and Hong Kong. Meanwhile, the increasingly sophisticated data center and cloud markets of Australia and Singapore are focused on investments that bring about “agility and responsiveness” to the organisation.

China and Australia’s bullishness on investor confidence is due to the sheer traffic volumes and size of the countries. For China, the adoption of cloud was propagated largely by the government with innovation initiatives such as Cloud Valley set up as the cloud nurturing center and remains the biggest force behind ongoing investment. Over in Australia the development of the country’s National Broadband Network is pushing cloud adoption. These developed cloud markets are leading the charge in terms of making the ‘how’ of cloud investment, key to business concerns.

We all know that cost drivers are already a given in the discourse on the reasons for further cloud investment but the realisation of those cost benefits comes in forms that are not necessarily fiscally quantifiable. Investing in cloud brings businesses the benefits of new market entry, speed to adoption, an enabler of new business process transformation and accelerating services to customers. These factors may take time to yield financial ROI but in many markets they are invaluable assets to the viability of a business.

While there are costs associated with IT transformation, these are significantly diminished when you balance these business benefits which are not only lucrative in the long term but essential to remain competitive.  When companies learn how to align the benefits of cloud with the organization, they not only improve revenue but also dramatically save on cost efficiencies.

Educating the technology fraternity on cloud has been mastered in most Asia Pacific markets what is still required however is explaining cloud influence for the business owner as well.  While at the top end of town, the key IT decision makers are mostly consolidated in corporate, for smaller business owners the conversation needs to be at CEO and grass roots levels. It is now a key issue for the peripheral layer of business, stakeholders or lower level IT people that need to embrace the journey.

It is at this layer of business where the “how” of cloud can be plotted out and orchestrated between disparate networks. The hybrid cloud models that are widely operational now show how it is possible to integrate networks seamlessly. Our research found that nearly 50 percent of respondents are most likely to adopt either a hybrid (29 percent) or virtual private cloud (18 percent), with 36 percent planning to adopt private cloud.

Indonesia also emerges as a unique market as it has managed to generate an incredible amount of locally based traffic volumes in a short space of time. It is currently the number two country in the world for Facebook users with a socially powerful youth skewed population. Another feature of Indonesia’s digital population is that it has a lot of inbound traffic coming from Indonesian expats that work across the region and globally and rely on social media to stay connected with their home base. From a usage perspective these social media drivers and cultural-based trends are pushing the demand for cloud in order to support high yield traffic across mobile and social platforms.

Another key emerging issue for vibrant markets like Indonesia is that data residency and privacy considerations are affecting cloud and virtual data center investments. Indonesia has been on the front foot in this regard but as regulations change across the region to protect the interests of local data providers our research has also found that organizations’ understanding of the impact of these specific regulations is still limited across Asia-Pacific.

These changes go hand in hand with the changing vision of the data center itself, which is no longer just four walls of secure data housing. It is now a conduit to an ecosystem of networks and a way of accelerating and protecting an organization’s competitive position in any given market.

The path for deeper cloud adoption is clear, it is now time for organizations to plot their roots.

To download a copy of the full research please click here and a PDF version of the infographic is available here.

 

Forrester Infographic Datacenter Investments in Asia Pacific Investing in the Cloud is Now a Question of ‘How’ not ‘Why’

 

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