The USD1tril Potential Value of Cloud Computing
What is the value of cloud computing? That’s a question often posed to technology companies like Neural Technologies.
On an individual business level we would argue that the cloud provides a powerful and cost-effective pathway to access advanced software solutions like our cloud-native Optimus Platform, unlocking valuable cloud solutions such as our charging-as-a-service platform. Cloud offers a pathway to anytime, anywhere access, which can be rapidly scaled up to meet changing business needs.
These cloud computing benefits unlock major cost savings, with reduced investment needs, business continuity reassurance, and automatic updates without costly in-house expertise or architecture.
No longer are businesses reliant on expensive in-house IT stacks or installations, with significant upfront capital expenditure needs and long run-time for implementation. It’s a click and play reality of future business software needs.
Cloud also brings benefits to predictable cost tracking, providing a reliable and cost-effective operational expenditure solution to business software that unlocks access to a diverse range of software.
The combined benefits of cloud adoption have seen a real change in weather in business circles over the last 10 years. Businesses are increasingly turning away from costly internal solutions to adopt software-as-a-service (SaaS) and cloud-based opportunities.
Now a recent report by McKinsey estimates that the value of cloud is today greater than that of the traditional IT landscape, and potentially represents more than a USD1tril opportunity for the global economy. That reveals the remarkable potential of our cloud opportunity.
The expanding cloud opportunity
While the McKinsey report perhaps stands out for that eye-watering trillion-dollar potential, it is not alone in forecasting the meteoric value acceleration of cloud computing. Analysts IDC predict that worldwide spending on public cloud services and infrastructure will double from 2019 to reach USD500bil by 2023.
The COVID-19 pandemic is likely to accelerate that trend further. Never has the benefit of secure, anytime, anywhere cloud business software solutions been more apparent than in the enforced social distancing and remote business operations of 2020-21. Some studies show that 90% of companies have accelerated cloud adoption as a result of the pandemic. Analysis of decision makers by global consultancy Boston Consulting Group (BCG) revealed that in June 2020, before the full scope of the COVID-19 impact was clear, 45% of companies expected cloud would be a major priority over the following year or two.
Even prior to the COVID-19 pandemic, Neural Technologies was itself embracing greater provision of cloud solutions for our customers. The CaaS charging platform offers a perfect template of these benefits, providing a flexible, scalable solution that allows companies to innovate faster and deliver faster time to market on new products and services. That means the ability to provide cloud vendor agnostic native solutions, which makes advantage of the new technologies provided by Kubernetes managed containerised solutions. Scale your solution up and down accordingly to your business.
McKinsey’s report projects that cloud for business could deliver USD430bil of ‘rejuvenation’ benefits, reducing risk, optimizing IT costs, and supporting the vital digitization of core businesses. At the same time it offers USD770bil of ‘innovate’ benefits, driving growth, accelerating product development, and delivering hyper-scalability of solutions. That reflects the full pipeline of potential we at Neural Technologies see by combining our powerful machine learning solutions with the flexible scalability of an enterprise cloud solution.
What’s remarkable about the potential of cloud is how it extends across all industries. In absolute value, high-technology companies are estimated to have the greatest possible EBITDA growth benefits, up to USD160bil according to McKinsey’s analysis. Yet in terms of percentage impact, oil and gas, retail, healthcare, insurance, and automotive and assembly could see the greatest gains, up to 70-74% EBITDA impact for the likes of healthcare and insurance.
Cloud adopters reveal significant benefits across a range of key operational parameters. According to McKinsey that includes an average 37% reduction in time to market for new features, 57% reduction in downtime, and 32% reduction in critical incidents.
A well-navigated path to cloud adoption reveals clear benefits. A study by Accenture highlights that 45% of companies are very satisfied with their cloud outcomes. That shows that the benefits of cloud are there to be realized, yet remain challenging for some companies to adopt. Just 37% of companies are realizing the full value expected from their cloud investments.
Working with experienced technology partners like Neural Technologies offers a valuable path to success on this journey. We can help deliver cloud software solutions that help reduce overall costs while delivering rapid return on investment. That’s critical if businesses are to deliver on the benefits of the potential USD1tril cloud opportunity McKinsey and other analysts envision.
With the right solution, cloud can deliver secure, flexible, and cost-effective opportunities to drive value to your business. It’s no secret that the future is increasingly in the cloud, but the real value of that opportunity is perhaps only now becoming apparent.