Almost every enterprise is looking for that “trusted” digital transformation to amplify sustainable value to the business. Given the flexibility of the cloud, this value is expected throughout the life cycle stages of digitalization driven by a cloud adoption strategy. Cloud computing and adoption as a solution for digital transformation and application modernization has already become the new normal across all enterprises. With a smart orchestration strategy for application, technology platform, and data, enterprises can create a contextually smart cloud for an intelligent, agile, and automated Business 4.0 world.
Cloud Adoption Trends
Earlier concerns around data security, loss of control, availability, and performance have subsided; businesses recognize that public cloud benefits now far outweigh the risks. The worldwide public cloud services market is projected to grow 17.5 percent in 2019 to total $214.3B, as per Gartner. Through 2022, Gartner projects the market size and growth of the cloud services industry at nearly three times the growth of overall IT services. Cost optimization, rapid innovation, process and architecture standardization, scalability, and reduction of technical debt are only some of the key drivers behind the current rising demand for world-wide cloud adoption.
Today, major cloud adoption trends are primarily:
- Migrate with modernization option
- Modernize business-critical applications
- Opt for multi-cloud with the right platform choice
Value Realization and Opex Reduction
Application migration and modernization are two ends of the cloud adoption spectrum. Cloud migration mostly impacts economics by reducing the cost of running business operations. On the other hand, the modernization of applications enables real value realization for businesses. Application modernization brings about hyper-personalized customer experience along with rapid response in servicing transient markets. For this reason, modernization activities are slowly gaining significance over migration-related activities. Yet, cloud migration is the bedrock for modernizing the legacy landscape of an enterprise.
Enterprises that are looking for continuous transformation and not as a one-time initiative, realize that both migration and modernization must go hand in hand. Most enterprises are dependent on legacy applications. While the smaller applications are moved to the cloud, enterprises must ensure that legacy applications do not hold back their business transformation plan. Application requirements and environments are constantly evolving, creating challenges in architecture, scale, security, and maintenance. Thorough analysis, strategic planning, and platform knowledge are key to moving legacy applications to new environments and processes.
Security and Regulatory Compliance
Enterprises can leverage modernization investments for their ongoing security and regulatory compliance requirements as well (for example, PSD2 and EBA compliance for the European Banking and Financial sector).
Harnessing Abundance through an Ecosystem Play
Another compelling reason for a combined approach to migration and modernization is to take full advantage of a connected ecosystem. Today’s business is not just individual industries, but a larger ecosystem connected across various related verticals orchestrated together to facilitate an immersive customer experience. The connected ecosystem, when exploited innovatively, catalyzes exponential business growth by the introduction of new business capabilities at about 51% accelerated time to value. This idea has been exploited extensively by the Banking and Financial sector. ABN Amro in Europe and Barclays in the UK have been rewarded with lower costs, faster innovation, and improved customer satisfaction by integrating their ecosystem even as they shifted their businesses to the cloud. ABN Amro enabled various third-party fintech providers to connect through secure application programming interfaces (APIs) to facilitate the creation of new business offerings in partnership with the bank. In fact, as a group, these offerings are growing faster than traditional banking businesses. One such new service is Tikkie, a payment app used by retail store owners in Amsterdam that allow shoppers to scan items with their smartphones and settle their bill on their way out.
Modernization Best Practices
- The first step in a modernization journey is to carry out an application assessment that will help determine the readiness of an enterprise for application modernization. It will help identify the candidates for modernization, the roadmap and its alignment to the business, and the budget required for modernization.
- The automation of the CI/CD pipeline is the next step. An agile approach that enables seamless DevOps will help accelerate the modernization journey of an enterprise.
- A microservices industry reference architecture approach leveraging techniques such as AI, design thinking, and developer jumpstart kits can enable modernization at scale.
- Lastly, a carefully thought out data migration plan is essential for a smooth modernization journey. Test the migration of trial batches of data to see how they function in the new application.
Enterprises must choose the optimal mix of cloud migration and modernization strategy that best fits their needs, considering the application estate, technology stack, and business considerations.
The road to the cloud is not simple or smooth. Enterprises can accelerate their digital transformation by taking advantage of the ecosystem and partnering with an expert with the experience and contextual knowledge to study business challenges, identify opportunities, and design a roadmap that best balances the migration and modernization path.
In a recent survey around application modernization and migration by a leading independent market research firm, comprising of 14 service providers worldwide, TCS was positioned as a leader and one of the top partners in this space.