Can Cloud Revolutionize Business and Software Architecture?

A pair of virtual discussions during CES 2021 looked at what senior business leaders should know about the current state of the cloud and what the future may hold. The sessions featured experts from IBM, Microsoft, Accenture, and other organizations that weighed whether cloud is changing how businesses function and what significance cloud architecture may have on software development.

A session on the evolution of software infrastructure and cloud architecture brought together Roger Premo, general manager of corporate strategy with IBM, with Pranay Ahlawat, associate director of enterprise software and cloud for Boston Consulting Group. They discussed whether traditional software architectures could scale in the future and the role architecture choice may play.

Ahlawat reiterated the phrase “software is eating the world,” which was made famous by Marc Andreessen, and then put some numbers behind that sentiment. “If you take a look at software, it’s about a half a trillion-dollar industry with an average SaaS company spending about 20-25% of its revenues on software development,” Ahlawat said, “which basically means architecture matters.” How organizations build software and the choices they make hold strategic importance, he said.

The physics behind software development changed completely in the past two to five years, Ahlawat said, with the growth of hybrid, multicloud, and edge. “Eighty percent of enterprises today have workloads that span multiple clouds and two out of three of them are using multiple clouds for many strategic reasons,” he said. That means applications in today’s environment can span data centers and clouds as well as go to the edge.

Tied to this trend is the evolution of connected devices and the Internet of Things, Ahlawat said. “Up until a few years ago, there was still a question whether IoT was hype,” he said. “Today we have 20 billion connected devices generating about 50 zettabytes of data a year.” Use cases on this front, Ahlawat said, include connected homes and smart cities, which still have room to grow to become mainstream.

The further development of data and AI also affects software development, he said. “Of all the data generated ever, 90% of that was generated in the last two years,” Ahlawat said. “When we talk with large software companies and enterprises, data and AI are central to their strategies.” This is unlocking transformative use cases such as autonomous cars and medical imaging, he said.

IBM also sees hybrid, edge, and multicloud becoming more pervasive, Premo said, with its clients’ environments becoming increasingly complex. Data and AI have long been part of IBM’s focus, he said, with new ways to leverage them emerging. “If you think about the really interesting AI, it’s going to come from data that comes from your customer database and it connects the data that is in an edge device inside a consumer’s home,” Premo said. “Driving that kind of innovative AI is an inherently hybrid optimization.”

The growth of cloud native architecture and DevOps strategy for faster innovation and software deployment helped catalyze a new transformative moment that Ahlawat said is approaching.

“We believe we are on the cusp of another change,” he said. That change is also being advanced by the spread of 5G wirelessly connectivity at the edge. This transformation is revealing limitations of some resources, Ahlawat said, such as microservices that are not scaling to meet the plethora of new use cases emerging among business, thus driving a need for further evolution.

“We believe the architectures of tomorrow will be fundamentally different,” he said. “We call them hyperplexed.” That means software running in many parts across public clouds, private data centers, personal devices, and specialized hardware, Ahlawat said. “The platforms of the future will natively support applications that run across these different infrastructures and devices,” he said. Such a shift may lead to next-generation programming languages, new programming models like serverless to make development of applications easier, and native support for distributed AI, Ahlawat said.

Revolutionize business with cloud

The further development of business through the cloud was the focal point for a separate panel moderated by Dean Takahashi, lead writer for GamesBeat, VentureBeat, with speakers from Microsoft, Accenture, and the Consumer Technology Association, which hosts CES. They discussed ways cloud might revolutionize business to provide greater access, flexibility, and scalability.

Karthik Narain, cloud first lead for Accenture, said cloud took on a fundamentally different form in the wake of the COVID-19 pandemic. He said cloud offers organizations elasticity and the capacity to change faster. “Change is the constant that every organization is going to see and COVID has shown that organizations need to be able to adapt with this change,” Naran said.

He cited the capacity of organizations to scale up or down as needed with cloud resources to better adjust to customer engagement, supply chain and other demands. Naran also said organizations need to evolve into innovative enterprises, a transformation that cloud service providers can enable. “That helps enterprises create newer capabilities and launch them faster into the market,” he said. “The rate of innovation time to market is also reduced.”

The power and productivity of the cloud platform can offer more capacity to leverage innovation before it is fully deployed, said Edna Conway, vice president and chief security risk officer for Azure at Microsoft. “You can test it out,” she said. “It can actually be a sandbox.” This might include surging to use more compute capacity without making an infrastructure investment, to explore a possible direction an organization may take, Conway said. She likened cloud to a testing ground that goes beyond running business operations. “It can be woven into the platforms you want to explore and experiment on,” she said.

The push to the cloud in response to the pandemic gave rise to a rapid shift in technology to an economy that is more digital, remote-capable, automated, and efficient, said Brian Comiskey, manager, industry intelligence, with the Consumer Technology Association. “[This] is the fundamental evolution, which will define the 21^st century,” he said. “Cloud computing is the backbone to that.”

Comiskey said cloud can provide enterprises with agility and scalability to navigate the digital transformation of the economy as whole.

Despite such potential benefits, organizations can be hesitant about migrating operations to the cloud or going cloud native. Takahashi pointed out that cloud adoption rates range from 20% to 60% in some cases. Conway said cloud adoption can vary by industry and individual business trajectory. For example, healthcare, she said, is moving into the cloud but has not fully adopted it and rests in the lower end of the adoption spectrum. The digital factory of the future, often spoken of in speculative talk, may likewise need more time and greater adoption before its promised potential is realized, Conway said. “Quite frankly, the convergence of IT and OT (operational technology) has meant we’ve moved a little slower in terms of deployment on IoT and IIoT, the industrial internet of things,” she said. “There has to be a technology shift to allow that.”

There is a growing prevalence among enterprises to be in the cloud, Comiskey said, given the forward-looking needs they face. He said companies that want to invest in cloud should consider what can be addressed first via the cloud to increase revenue and improve margins. Citing projections from the annual Flexera state of the cloud report, Comiskey said 83% of enterprise workloads were expected to be in the cloud by 2020, with 41% of that running on public cloud options, 20% in private cloud, and 22% in hybrid cloud.

In effect, he said companies are cherry-picking providers and services based on the resources they need to compete and grow for the future. “You’re really seeing this deployment of much more mature strategy across a multitude of providers,” Comiskey said.

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