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Cloud Value Proposition Reaches Critical Mass

July 12, 2017 by Kabelo Makwane, MD: Accenture Cloud First Business, South Africa 3

A number of recent developments in the broader information and communication technology (ICT) sector have converged, signifying a massive step change for cloud computing in the country.

Of great importance, has been the aggressive expansion of terrestrial fibre networks across South Africa’s major metros by numerous infrastructure providers, which has given businesses of all sizes, including those in decentralised locations, access to high-speed, uncapped broadband.

The continued roll out of high-speed wireless broadband in the form of 4G, and now 5G in certain areas, has also contributed to an increase in the adoption of basic cloud-based services such as web applications or smaller production systems.

In addition, and somewhat interrelated, is the impact and influence that workforce mobility has had, predominantly the ’bring your own device’ (BYOD) workplace paradigm. This trend is being driven by employees who want to use personal smartphones and tablets to access company networks, and the desire by businesses to improve workforce productivity and efficiency by ensuring on-demand access to applications and mission-critical systems and information.

Finally, in what is potentially the most significant recent development, and undoubtedly marks the tipping point for mainstream cloud adoption locally, Microsoft announced that Microsoft Cloud — including Microsoft Azure, Office 365 and Dynamics 365 — will, from 2018, be delivered from local data centres in Johannesburg and Cape Town.

The arrival of this in-country public cloud infrastructure, coupled with reliable, high-speed, end-to-end fibre access into the Microsoft data centres, means local businesses will soon lead in the New IT with access to a comprehensive cloud solution that answers many of the regulatory issues previously faced with off-shore hosting, such as data sovereignty and security.

Accordingly, Microsoft customers, which predominate business and public sectors, will now be more inclined to consider cloud computing, given the alignment of these factors, and the fact that vendor software licensing models have also evolved to preference cloud-based usage.

And the value proposition of Microsoft’s Azure cloud offering – a flexible, integrated platform that can operate as a full public or hybrid cloud solution, with enormous scalability – is even more enticing for customers that currently run on-premise SAP ERP solutions. Many organisations running legacy ERP systems are in need of an upgrade. They should therefore already be considering the next evolution of their core business systems, which form the heart of their everyday business operations.

If cloud computing in not already part of their next upgrade path, be it a full public solution or a hybrid model, then these companies are failing to grasp the magnitude of recent developments.

Firstly, the on-premise model often does not make business sense, both from a cost and an operational perspective. Cloud computing, on the other hand, enables businesses to leverage the investments, innovations and developments that cloud providers have already made. This negates the need to commit capex, and the considerable time and energy needed to develop standalone, on-premises solutions.

Secondly, many organisations using SAP as their core ERP system are, more than likely, already running specific elements in the cloud, with software-as-a-service solutions such as SAP SuccessFactors for human resources, or SAP Ariba for procurement. And SAP S/4HANA’s capabilities and suitability for cloud platforms as a ‘next generation’ ERP solution are accelerating the need to migrate to the cloud, to gain the flexibility and agility that required by successful businesses in the digital age.

Similarly, new companies or rapidly growing start-ups that are considering large-scale investments into core business systems for the first time are ideally placed to deploy out-of-the-box solutions into the cloud, fully bypassing the onerous on-premise approach, which today makes the most financial and operational sense. This also offers scalability, to facilitate any rate or degree of future growth due to the economies of scale that can be achieved in data centres.

There are also companies that may be in the process of a major ERP implementation, and are busy fine-tuning customisation. During this process they will need to consider how to achieve this in the most cost effective and efficient manner. The application development, testing and commissioning phases require significant computing real estate to succeed, with the public cloud environment is the best placed to facilitate this process in the most cost effective and efficient manner.

Accordingly, whatever position a company may find itself in, the cloud computing discussion currently taking place around boardroom tables needs to shift from a hypothetical debate, to one that seeks to define a strategy for the adoption of cloud computing and the migration of core business systems into the cloud.

Faced with the facts and the cumulative effect of recent develops, there can be little doubt left that for businesses in South Africa, all roads now lead to the cloud. And when it comes to provisioning cloud-based SAP solutions, Accenture believes that Microsoft Azure is a compelling value proposition. It offers cost benefits, and Azure is an open Microsoft platform, enabling greater interoperability with other systems and native integration with a variety of developer tools, including open source variants.

The time has therefore come for businesses to commit to a cloud strategy by first assessing their current core system lifecycle and subsequently developing a roadmap, ideally with a strategic cloud partner that understands every facet of the journey to cloud adoption, from the application assessment and cloud value realisation strategy, cloud transformation and migration, to ultimately cloud management and optimisation.

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