As more organizations realize the benefits of the cloud, it is fast becoming the de facto standard for deploying and managing technology. But as cloud-based delivery models continue to evolve and win proponents, there’s still some confusion about what the cloud actually is and what the true benefits are for businesses.
To help SAP users gain some clarity about cloud, we’ve gathered the top five cloud myths and provided the realities behind them.
Myth #1: The Cloud Is About IT and TCO
Reality: The cloud is about driving new levels of process efficiency, collaboration, and insight. Line-of-business (LoB) executives are embracing the cloud to accelerate business transformation. In fact, IDC predicts that by 2016, LoB executives will be involved in 80% of all new IT investments and will function as the lead decision makers in more than half of those investments.1
While the cloud certainly offers a cost advantage, the real benefit that the cloud brings to business comes in two flavors: innovation and agility. With easy configuration and advanced development platforms, the cloud gives companies the agility they need to quickly adapt processes to capitalize on changing market dynamics and stay ahead of the competition. More importantly, businesses are tapping the cloud to enable new processes, gain new insights, and unlock new value.
At Cisco, for instance, the strategic marketing group mined historic data and social media mentions for customers who revealed both a “propensity to buy” and a high “readiness to buy.” Cisco’s sales force converted that insight to a sales uplift of $4.2 billion.
According to IDC, “Over the next several years, the primary driver for cloud adoption will shift from economics to innovation as leading-edge companies invest in cloud services as the foundation for new competitive offerings.”2
Myth #2: You’re Either on Premise or in the Cloud — You Can’t Be Both
Reality: The cloud is no longer an “either/or” proposition. It’s not even an “and” proposition — it’s an “and better” one. The cloud gives businesses both flexibility and choice. With the right vendor, you can mix public cloud applications and services, private cloud managed services, and on-premise technology to meet your company’s specific needs. In fact, a Wakefield Research study found that more than two-thirds of CIOs have adopted hybrid cloud models, extending their on-premise applications and infrastructures with the cloud.3 In other words, you can get your cloud, your way, and enable new processes, gain new insights, and unlock new value for your enterprise. With increasing frequency, companies are investing in one platform that combines cloud, on-premise, social, mobile, and big data technology.
Hundreds of SAP customers, for instance, have expanded process automation and achieved greater savings and working capital performance by extending their SAP ERP and SAP Supplier Relationship Management footprints with Ariba cloud applications and the Ariba Business Network. Hundreds more have improved their employee recruitment, training, and performance management capabilities by extending SAP ERP Human Capital Management (SAP ERP HCM) with cloud-based talent management solutions from SuccessFactors. Still more customers have created new levels of customer engagement by expanding their SAP Customer Relationship Management deployments with SAP Cloud for Customer.
Myth #3: The Cloud Isn’t a Proven Platform for Business
Reality: The cloud has transformed the nature of business and engagement. Just as consumers use social tools and networks to shop, share, and consume better, companies are leveraging cloud-based applications and business networks to collaborate more efficiently, connecting and interacting with expanding communities of customers, suppliers, and peers. Businesses of all sizes are using the cloud not only to accelerate process efficiency and productivity, but to gain new insights, engage customers and partners in new ways, and unleash new operating and business models that drive profitability.
Take Marriott International for example. Using cloud-based HCM applications from SuccessFactors and the enterprise social network SAP Jam, the company has been able to enhance learning, knowledge sharing, and project management within the enterprise, as well as enable a new engagement, on-boarding, and training model with its growing workforce.
Myth #4: The Cloud Isn’t Secure
Reality: Leading cloud applications are developed with the same security mindset as on-premise software and are maintained with frequent updates to ensure that the latest security standards are always in place. Leading cloud service providers ascribe to international security standards, such as SAS-70 Type II, ISO 27001, SSAE, and PCI, and employ measures to prevent attacks from the internet and attempted theft of customer data.
Cloud solutions are in use by some of the most security-conscious organizations in the world, including government, military, research and development, and financial institutions. Many companies have found that the cloud can provide an even more secure, up-to-date application and transaction environment than they could maintain on their own with limited budget and resources.
Myth #5: The Cloud Can’t Adapt to My Business
Reality: The beauty of the cloud lies in its scalability and flexibility. With easy configuration, public and private delivery options, and advanced development platforms, the cloud gives companies the ability to innovate quickly and design and deploy new applications and business processes that meet their unique requirements even faster to capitalize on changing market dynamics.
For example, Groupe Danone, one of the largest food companies in the world, chose to design apps to reach consumers on their mobile devices in the cloud because it wanted to start small and pay as it went along, rather than spend a lot of money up front to build large IT systems. Using SAP HANA Cloud Platform, Danone has been able to quickly build user-friendly apps that have opened new opportunities to connect consumers directly to its back-end systems and to explore new markets.
Some companies view the cloud as just another deployment option. But savvy organizations see it for what it really is: a requirement for success in today’s fast-moving world, where agility and innovation determine winners and losers.
1 IDC, “IDC Predictions 2013: Competing on the 3rd Platform” (November 2012). [back]
2 IDC, “IDC Forecasts Worldwide Public IT Cloud Services Spending to Reach Nearly $108 Billion by 2017 as Focus Shifts from Savings to Innovation” (September 3, 2013). [back]
3 SAP and Wakefield Research Survey, “By Migrating to the Hybrid Cloud Environment, Over 70 Percent of CIOs Simplified Their IT Processes, Citing Increased Speed and Flexibility” (2013). [back]