Thankfully, not all the impacts of Covid-19 were bad. The overnight enforcement of work-from-home accelerated digital adoption plans by a few years. Now that the worst of the pandemic is behind us, enterprises are enthusiastic, and also better positioned, to move ahead. And one way many are moving is to the cloud.

For many organizations, innovation is the first step forward. Recently, when 800 executives from the Asia Pacific region, the UK and North America were surveyed, 89% said they were under pressure to innovate to overcome disruption and uncertainty in their industry. Interestingly, this applied even to sectors such as infrastructure, construction and transportation, which have been slow to modernize. 

For organizations that want to advance, there is only one environment for innovation, and that is the cloud. Enterprises that are not quite there should therefore start with cloud transformation as preparation for next-generation innovation.

However, many organizations assume, wrongly, that this simply calls for lifting on-premise infrastructure and shifting it to the public cloud. They should understand that to extract the full value of the cloud, and create a solid foundation for innovation, they must center their cloud transformations on the following:

1. Data and analytics

Data is the lifeblood of innovation, and there’s no stemming the flow: A survey published in January 2022 revealed that in North American enterprises with more than 1,000 employees, the average monthly rate of growth in data volume was a staggering 63%, and the average number of data sources was 400. It is absolutely unviable to manage information of this size and complexity with on-premise infrastructure. This is why more than 99% of respondents said they would migrate their data to the cloud within two years.

Cloud offers not just unlimited storage and compute, but also a wealth of analytics, machine learning and AI solutions as a service, so enterprises can extract accurate, actionable and real-time insights.

A clear use case for cloud, data and analytics that will resonate with most enterprises is supply chain improvement.

Supply chain disruption, which started during the pandemic in 2020, and extended with the Russia-Ukraine war in 2022, continues to challenge businesses in 2023. However, they can mitigate the impact by improving end-to-end supply chain visibility and leveraging that visibility (read data) for supply chain modeling, strategic planning, and risk and reliability assessments, using solutions off the cloud. 

Toyota is a great example of how to use the cloud’s analytical power to strengthen the supply chain. In North America, the company’s aging on-premise vehicle data warehouse (VDW) was struggling to handle rising data volumes. By modernizing the VDW with a next-generation data lake on public cloud, the company was able to reduce complexity, eliminate data duplication, raise data quality and create a foundation for sophisticated analytics. 

2. Security in the cloud

According to one estimate, 60% of corporate data is already in the cloud. Thus, cloud security is a huge priority for the leadership in data-driven organizations. The good news is that hyperscalers have made huge strides in securing their environments. Still, enterprises need to take certain steps to secure their cloud transformation.

The first is to shift from network-centric to user-centric security. This is because when users access cloud data from anywhere, traditional network perimeter security becomes irrelevant. Instead, the need is to secure information and applications where they are — in the cloud — using zero-trust architecture. 

Next, organizations need to reconfigure systems and applications for the cloud. Misconfiguration is almost always the underlying cause of a cloud breach. Today, new models and architectures protect cloud-based workloads.

A proven method is to treat security as “code.” Security as code (SaC) automates the enforcement of security policies and standards. So, if company policy says a certain data category must be encrypted before being uploaded to the cloud, any code that fails to do this is automatically rejected. 

Another advantage of SaC is that testing is integrated within a continuous Integration and delivery process so vulnerabilities can be found and fixed quickly. It also enables security teams to work at cloud speed, and embed security within workloads to minimize risk. In effect, SaC allows enterprises to innovate freely and rapidly by providing them a safe cloud environment.

3. Sustainability

If climate change were not reason enough, soaring bills are driving enterprises to search for ways to lower energy consumption.

Scaling back energy-guzzling data centers is definitely one of them. Migrating workloads from on-premise infrastructure to the cloud can cut energy usage dramatically because cloud providers use their capacity much more efficiently: A cloud server can handle 100 times the workload that an on-premise server of similar size can. In addition, hyperscalers are further improving the sustainability of their clouds. Together, these measures can help enterprises shrink their carbon footprints significantly. 

Indeed, organizations should use the full potential of the cloud for improving sustainability. For example, they can migrate their workloads to the cloud of a provider that helps them retire their old servers and hardware in a sustainable manner. Amazon, Cisco, Dell and Google are all part of the Circular Electronics Partnership (CEP), which promotes the reuse and recycling of technology infrastructure.

The cloud can also streamline highly complicated ESG reporting by standardizing data and automating reporting processes. At least one hyperscaler has a cloud-based SaaS offering for reporting carbon emissions and monitoring progress against reduction targets. An encouraging sign is that many leading corporations are using the cloud to support their ESG agendas. 

4. Connectivity

Today’s enterprises are global entities, with operations distributed all over the world. And with the hybrid work model taking hold, the workforce in most organizations is untethered from the office.  Consequently, software applications, equipment sensors, supplier networks, customers and employees need to access company systems from just about anywhere.

When embarking on cloud transformation, organizations should ensure their providers can deliver the connectivity, integrations and compute required by their highly dispersed operations.

5. Scalability

Often, in order to experiment with new ideas, enterprises need to create large computing capacities. This capacity goes unutilized once the project is complete. Even if that weren’t the case, enterprises may find it challenging to expand capacity amid the enduring chip shortage. One way to avoid waiting for hardware is to tap the cloud’s vast infrastructure.  

With its near-unlimited flexibility, the cloud allows innovators to scale compute and storage up and down on demand. Cloud also supports innovation in other ways. For example, entrusting infrastructure hosting and provisioning to a cloud service provider frees up time that an enterprise could then devote to innovation.

The emergence of multicloud/polycloud, and consequent dismantling of vendor lock-in, bring unprecedented agility to provisioning, which is critical for “fail fast” innovation. 

Summing up

The cloud can save enterprises time and money. However, cloud transformation is incomplete until it changes them into highly innovative organizations — effectively, into next-gen digital businesses.

To create such an environment of unlimited innovation, it is important to factor in five priorities in cloud transformation: data and analytics; security; sustainability; connectivity; and scalability.

Besides powering innovation, the cloud can also help organizations overcome the pressing challenges of 2023, including supply chain disruption, energy costs and a chip shortage that’s affecting everything from hardware purchases to business continuity.

Anant Adya is executive vice president at Infosys.