In the past few months, businesses around the world have embraced cloud technology to pivot and survive. Cloud-based apps allow businesses to continue their operations remotely. However, if you have chosen cloud software for your business recently, you know that the SaaS industry is a crowded marketplace. For every single business requirement, there are hundreds, if not thousands, of vendors to choose from.
The pandemic has thrown the SaaS industry into sharp relief, highlighting both its shortcomings and its many advantages. It should come as no surprise that the industry is expected to grow this year to US$116-billion this year (up from just under $100-billion in 2019). But is that growth sustainable?
Even as the market adoption for SaaS grows, here are some other driving trends:
Lack of profitability SaaS is notoriously a low-margin business. The percentage of profitable companies in the SaaS market is, surprisingly, in the low single digits, despite the market growth figures. At a time when VC funding is drying up, only those vendors that can prove they are on track to be profitable will make themselves more visible and relevant in the future. Those that cannot make that leap will most likely be a part of someone else’s consolidation story.
Rise of the Suites In a bubble, features tend to masquerade as products and products tend to masquerade as companies. During a recession/depression, this reverses. Products become features and categories consolidate. This gives rise to product suites which are either built from the ground up or assembled through acquisition. Already, bigger SaaS players are strengthening their offering by either building new products, or more often acquiring companies.
Consolidation A SaaS industry with tens of thousands of companies is unsustainable. How many CRM companies do we need? 10? 20? 50? We have more than 5 000 currently. This suggests that many of them are likely to be consolidated and in multiple areas. Oversupply combined with the rise of the suites suggests that consolidation is inevitable. – Read more
The economic turmoil caused by the pandemic has kickstarted the rapid adoption of cloud technology. Across the globe, companies in their thousands are expanding the number of services they operate in the cloud in a bid to speed up digital transformation and put themselves in a better position to withstand the volatility of today’s marketplace. In this post, we’ll look at some major brands to discover why they have decided to migrate to the cloud over the last few months.
Arguably the most recognisable brand in the world, Coca-Cola may have been making the same product for 128 years but its operations are strictly 21st century. Its manufacturing processes have long been massively automated and now, it has adopted a cloud-first policy with regard to IT.
As part of its digital transformation, the company has migrated to a hybrid cloud setup in a bid to reduce operational costs and increase IT resilience. This will enable it to deploy data analytics and artificial intelligence to provide it with insights that it can use to improve its services and operations.
Coca-Cola will use the migration to streamline its existing IT infrastructure and develop a company-wide platform for standardised business processes, technology and data. In order to integrate the public and private elements of its hybrid cloud, together with existing technology it plans to keep, it will deploy a single-dashboard, multi-cloud management system.
UK-based fintech company, Finastra, is migrating to the cloud to accelerate not only its own digital transformation but those of its 8,000 global customers. The objective is to revolutionise the use of technology in the financial services sector by developing a platform that financial companies can use to speed up innovation and improve collaboration.
To achieve this, Finastra will migrate its entire customer base to the new cloud platform. From here, they will be able to create digital-first workplaces and provide their own clients with financial services and solutions, such as electronic notary services and electronic signatory, which are better suited to today’s digital world.
Major bank migrations: Deutsche Bank and HSBC
Two of the world’s major banks, Deutsche Bank and HSBC, have both announced plans for migrations over the last few weeks. A key element of its digital transformation, Deutsche Bank sees the cloud as being crucial for increasing revenue and minimising costs. It aims to make use of data science, artificial intelligence and machine learning to improve risk analysis and cash flow forecasting, as well as to develop digital communications that are easier for customers to interact with and which enhance the customer experience.
The German bank is also using the move to improve security, seeing it as a way to help it comply with data protection and privacy regulations and to ensure the integrity of customer data.
HSBC Holdings, the parent company of HSBC Bank, is adopting the cloud to benefit from its storage, compute, data analytics, AI, machine learning, database and container services, as well as for the cloud’s advanced security.
Its major goal is to provide more personalised and customer-centric banking services for its customers, for which it will develop customer-facing applications. It also intends to use the move to update its Global Wealth & Personal Banking division, develop new digital products and improve compliance.
Car manufacturer migrations: Daimler and Nissan
Two leading car manufacturers, Mercedes-Benz parent company, Daimler AG, and Nissan have also announced plans to adopt cloud technology. Daimler will migrate its after-sales portal to the public cloud to help it innovate and accelerate the development of new products and services for its global customer base, as well as to provide it with scalability. Like many other companies, it also sees cloud as being a secure platform and will use it to encrypt and store data to protect it from ransomware and hacking.
Nissan, meanwhile, is using the cloud primarily to help cut costs during the post-pandemic downturn. With poor sales throughout 2020, it views digital transformation as essential to remain agile and resilient.
The move will allow the car maker to store its vast quantities of data far less expensively than in-house and provide it with cost-effective, scalable processing resources. These it will use to undertake application-based, computational fluid dynamics and structural simulations which are needed to design its cars and test them for aerodynamics and structural issues. The cloud will also enable it to carry out performance and engineering simulations, helping it improve its vehicles’ fuel efficiency, reliability and safety. – Read more
We believe there are many reasons to migrate your organisation’s applications to the cloud, not least of which are cost savings, streamlined operations, redeployment of resources, reskilling of your internal teams and talent retention.
In this blog, I answer the five most common questions I get asked about moving applications to the cloud, so you can make an informed decision about whether it’s the right thing for your organisation.
1. Is it secure and where is my data?
“Is it secure?” is one of the most commonly asked questions about the cloud. But as the cloud has become universal in organisations, the nature of the question has changed.
Every year, major cloud providers like Amazon and Microsoft spend billions to make their cloud services stable, robust and secure. Security measures and compliance certifications are available for all to see, and Microsoft’s cloud offering is as secure as it gets in terms of compliance, governance and physical security.
The result? Today, almost everyone accepts that the cloud is secure. The conversation now is less around how secure it is and more around data control. It’s essential that organisations understand where their data lives, where it may go and who can access it in order to feel comfortable with moving to the cloud.
A lack of understanding around how the cloud works is a barrier to adoption for many organisations. In the UK, law firms are amongst some of the most cautious adopters of cloud solutions, largely because of questions about where confidential client data will reside and who can access it.
There needs to be an understanding that, by its very nature, the cloud exists in multiple locations – and your data can too. Azure, for example, for resilience can have multiple copies of data in multiple locations. And this conversation isn’t always an IT-led discussion; it needs the business to decide in which country their data should be reside, and whether they are comfortable with it potentially leaving UK soil. The cloud gives customers choice here, different services having different options about where data is stored, but it’s important that well informed decisions are made in this regard.
Organisations need to know what they are letting themselves in for and understand how data will be stored and accessed which needs a complex, but not impossible, discussion about trust and understanding. In our experience, anyone who truly understands the options and how the cloud works has been confident in making an informed decision based on facts not fear.
2. Will all my IT staff be out of work/redundant?
Generally, there isn’t a direct correlation between adopting cloud services and IT staff being let go. We prefer to see this as freeing up IT staff to focus on more strategic tasks.
Whether they’re in retail, manufacturing, healthcare or any other sector, businesses are trying to be ‘the best’ and provide the best service to their customers. IT should enable them to do that. It should be a supporter and enabler for a business to do its job and operate at its highest level. And for organisations that are held back by inefficient, outdated IT systems, embracing the cloud is one way to make improvements.
Few organisations today choose to use physical servers; they are costly, require office space and need people to maintain and manage them. Solutions like O365 and Exchange Online are making delivery of common IT services easier, better and lower cost, and like it or not, the requirement for on-premise skills will reduce as cloud adoption becomes the new norm. As IT evolves, the skillset of IT teams needs to evolve with it, or face being left behind. – Read more