The long-predicted growth in cloud adoption is now finally accelerating innovation, scalability and business agility, resulting in inventive business models and business growth. As many companies already have highly virtualised infrastructure in place, their IT strategy is increasingly focused on cloud adoption as a means of not just driving cost efficiencies but also innovation. Increasingly, businesses are looking at ways to ease the burden of meeting regulatory compliance and security requirements by implementing the relevant cloud adoption strategies.
As cloud computing is maturing at a rapid pace with many "as-a-service" type offerings such as infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), desktop-as-a-service (DaaS), disaster recovery-as-a-service (DRaaS), software-as-a-service (SaaS), such developments have paved the way for the anything-as-a-service (XaaS) model. This can be seen as the founding pedestal for next version of the cloud development: the "vertical cloud". The vertical cloud is designed to deliver core applications, tools and the corresponding biota of a specific vertical that allow organisations to customise cloud services themselves to their specific needs and tastes.
The vertical cloud allows enterprises to pick and choose what to operate in the cloud and on customer’s premises, based on security and compliance requirements that govern their businesses. In industries such as banking and finance or insurance, for example, regulatory compliance is the prime driver while choosing the relevant architecture for their IT Infrastructure. With major regulations on banking and finance in progress, including Basel III and EU General Data Protection Regulation (GDPR), regulatory compliance will remain a major area of investment throughout 2016.
However, using the vertical cloud shifts the onus of compliance to the cloud provider on account of their proven and re-usable governance and security frameworks. Vertical cloud offerings can come pre-packaged with the required regulatory obligations and thus offer organisations a relief from the encumbrance of ensuring compliance themselves.
Continued growth in cloud and IT infrastructure spending
Analysts foresee that a significant acceleration in global cloud-related spending will continue. During 2016, global spend on IT services is forecast to grow by 3.1 percent, as companies continue to adopt cloud vendors, according to Gartner. This trend is no different in the United Kingdom, where adoption continues to grow. For example, according to a recent survey by PwC, the banking and finance sector is predicted to increase spending on IT in 2016, a big part of which is dedicated to cloud services. Recent guidance issued by the Financial Conduct Authority is likely to perpetuate this trend, by advocating the implementation of the cloud by financial services organisations, paving the way for firms in this sector to take advantage of cloud services and the innovation that it can foster.
The main factors driving cloud adoption are industry competition and pace of change brought on by digitisation. However, businesses need to be more nimble and use the cloud to absorb planned and unscheduled changes swiftly and seamlessly. In order to enable companies to deal with market trends and deviations, the cloud value chain takes a holistic approach to the current business in the context of a changing market. Here is a snapshot of a few such phases which, in rapid evolutionary terms, lead to the adoption of the vertical cloud, a concept that encompasses them all.
- The cloud service economy is here. The current trend in cloud adoption is to look beyond asset management and traditional methods used to accomplish business outcome (e.g. developing, testing and repairing). Instead, various flexible ‘as-a-Service’ models offered by cloud firms allow businesses to employ technology solutions themselves, freeing IT teams to focus instead on architectural and advisory services. From the perspective of an IT Infrastructure, the expectation in the cloud service economy is to have 'value' delivered directly by the investment made instead of traditional and laborious ways of realising it.
- Anything-as-a-Service as a prelude to vertical cloud. Cloud thinking is spurring some organisations to explore running their entire IT operations on the Anything-as-a-Service (XaaS) model with cost vs service consumption variability. Ultimately, however, it is the digital disruption across industries that added to the increasing complexity of continuing traditional in-house handling. As such, businesses are faced with the need to handle next generation requirements such as big data analytics, cognitive computing, mobility and smart solutions, Internet of Things (IoT) and other examples of digitisation.
Security and regulatory compliance are complex and exhaustive, requiring IT infrastructure and applications to be constantly ready for ever-evolving demands. Hence, pursuing the vertical cloud strategy can help business not only to advance and accelerate business growth and gain competitive advantage, but also to mitigate security and regulatory compliance.
About the author
Nachiket Deshpande is Vice President and Global Delivery Head of Cognizant Infrastructure Services (CIS) practice. In this role, he is responsible for the overall service delivery and customer experience management for the practice.
An industry veteran, Nachiket has over 20 years of experience in the information technology industry and has been with Cognizant since 1999.