6 Reasons to Migrate to the Cloud

In the modern era of digitalization, businesses in all industries are faced with new challenges. Competition is intensifying, customers are becoming more demanding, and technology is evolving at breakneck speed. To remain competitive, businesses need to change. And one of the key steps along the way may be migrating to the cloud.

Hilbert Team CEO Vyacheslav Bessonov spoke about the main reasons why companies decide to move to a cloud environment.

Why is business migrating to the cloud?

According to research from Hackett Group, companies that move to the cloud experience the following benefits:

• Reduction of IT system incidents and failures by 54%
• Reduction of information security incidents by 45%
• Reduce the time it takes to bring new digital products to market by 43%
• Increased productivity of system administrators and DevOps engineers by 66%
• Reduce IT costs by 20%

But migration to the cloud is not just an IT process, but a business project. Therefore, before making a decision, it is necessary to carefully analyze the needs and goals of your business. A cloud strategy can help with this, in which the company clearly formulates for itself why it needs the cloud and what goals it wants to achieve in it.

Below, we look at the seven main reasons why companies migrate to the cloud.

1. Economic efficiency

One of the most obvious reasons for migration is the company's desire to optimize infrastructure costs, not pay for expensive equipment and pay only for the resources that are actually used. The cloud also helps to avoid downtime due to equipment failure and expensive repair costs. And most importantly, migration can increase profits.

Cloud computing is boosting revenue and profitability, according to a global survey of 1,300 senior executives by Wipro FullStride Cloud Services. Finance executives reported revenue increases of up to 15% and profitability gains of up to 4%.

Another survey by Deloitte found that small and medium businesses using cloud technology are 21% more profitable and grow 26% faster. Migrating a business to the cloud can reduce the total cost of ownership (TCO) by as much as 40%, according to Accenture.

Cloud technologies help reduce costs and increase business profits and profitability due to several key factors:

• Pay as you go.

Businesses pay only for the resources they actually use (pay-as-you-go model), which allows them to avoid unnecessary costs for equipment and software.

• Scalability.

The ability to quickly scale up or down resources based on business needs, which is especially useful during peak periods or seasonal fluctuations in demand.

• No capital expenditure.

Instead of making a large upfront investment in infrastructure, a business can start with minimal costs and gradually increase its use of cloud services as it grows.

• Optimization of operating costs.

Automating routine tasks such as data backup, software updates, and security can reduce operating costs.

• Increased efficiency.

Cloud technologies provide access to the latest innovations and tools, which helps improve productivity and the quality of products or services.

• Improving the quality of customer service.

Rapid introduction of new features and products, as well as high availability of services, contribute to improving the quality of customer service and increasing their satisfaction.

Together, these factors lead to reduced overall costs, increased profits and improved business profitability.

Example:

• The service for obtaining bank guarantees "Derzhava Online" managed to reduce the cost of infrastructure by up to 40% thanks to moving to the cloud and carrying out FinOps optimization.

2. Business resilience

Fault tolerance is one of the most important properties of IT infrastructure. This is the ability of the system to continue normal operation even in the event of failures, unexpected errors or failure of individual system elements. Failures in business-critical applications lead to financial losses. Thus, by investing in the cloud, the risk of losing more money is reduced.

Estimates of financial losses if business-critical applications are unavailable are estimated by Gartner at $5,500 per minute (or about $330,000 per hour)

Due to what the cloud allows achieving high fault tolerance and stable operation of services:

• Geo-distribution – data and services are distributed across multiple servers and data centers to ensure availability even if individual nodes fail.
• Automatic scaling allows the system to quickly adapt to changing loads, avoid overloads and ensure service stability.
• Data backup and replication help avoid data loss in the event of system failures.
• Resource monitoring and management allow you to quickly identify and resolve problems in the system.
• Load balancing ensures even distribution of traffic and prevents overload.

Example:

• The service for receiving bank guarantees "Derzhava Online" required high reliability of operation in order to avoid failures and maintain an ideal reputation.
• Migration to the cloud allowed the company to create a fault-tolerant infrastructure that guarantees uninterrupted service operation.

3. Information security

Problems with information security in a company lead to reputational and financial losses. In addition, there are many regulatory standards that determine what information security in a company should look like.

You need to organize security at several levels: data access management, application security, OS security, network security, backup, data storage and equipment security, physical security and disaster recovery, etc. All these risks can be delegated to a certified cloud provider that complies with all state standards in the area of ​​“information security” and ensures infrastructure security.

However, the division of responsibility for ensuring security depends on which cloud service model the customer uses: IaaS (Infrastructure as a Service), PaaS (Platform as a Service) or SaaS (Software as a Service).

Read more materials on this topic in Compass CIO

4. Ecosystem of services for developing your business

To maintain high competitiveness of a business, it is important to be able to quickly adapt to changes in the market and use innovative solutions, for example, based on AI and ML. Implementing each individual technology from different vendors separately can be long and expensive.

It is much easier to do this inside the cloud. All major cloud providers, in addition to basic infrastructure services, have a wide range of specialized services in their arsenal to improve business processes: from chatbots and voice robots to recommendation systems and tools for working with big data. Therefore, customers have the opportunity to quickly implement and test new technologies.

• Retail companies can easily build analytics platforms in the cloud or set up automated call centers.
• Online stores and marketplaces can implement cloud-based recommendation systems and chatbots to communicate with customers.

• Manufacturing companies can use predictive analytics to optimize production processes.
• Banks and financial institutions can use AI and ML services provided by the cloud to build scoring systems.

5. High speed of development of digital services

Another factor that affects the competitiveness of a business is the speed of development. The fight for the buyer is intensifying, and it is important for your company to be the first to enter the market. After all, if the creation and launch of a product are delayed, the company may lag behind competitors and miss out on benefits.

The cloud makes this task easier. According to research by the Hackett Group, companies that have moved to the cloud reduce the time it takes to bring new digital products to market by 43%. The cloud also allows you to test new ideas and bring them to market faster, ahead of your competitors.

The reduction in TTM occurs due to two factors:

1. Speed ​​of provision of infrastructure for testing. There will be no extra costs for new equipment, the cloud allows you to easily obtain a large number of resources, which are easy to get rid of after the work is completed.

2. Availability of specialized services that allow you to quickly build an IT infrastructure for testing.

Example :

• The developer of neuroservices KNWLab needed to migrate to the cloud in order to increase the efficiency of the R&D department and reduce Time to Market.
• As a result of cloud migration, infrastructure optimization and automation, the company has increased the productivity of the development team by automating routine operations. It has also increased the frequency of releases by automating CI/CD processes.

6. Scaling the business

One of the important advantages of the cloud is the ability to easily and quickly scale the IT infrastructure in accordance with changing business needs. For example, when launching new stores, products and services, entering new markets.

Cloud providers provide an ecosystem of IaaS and PaaS services, most of which have the ability to automatically scale, so the services automatically adapt to the load:

• As the load increases – for example, the number of clients and customers – the services automatically increase the number of nodes responsible for storing and processing data, allowing them to handle the entire new load.
• When the load decreases – for example, after the end of the sales season – the services adapt in the same way and reduce the number of nodes, reducing the cost of the infrastructure.

Thus, we can say that cloud migration is a powerful tool that can help your business become more scalable, reliable, efficient and secure.