To remain viable in an unrelentingly dynamic market, today’s technology, media and entertainment, and telecommunications (TMT) companies must strive to become tomorrow’s adaptive digital enterprises. To do so, we believe a cloud-enabled enterprise is a prerequisite to staying ahead of the market in an era of elevated customer expectations.
Why are TMT companies flocking to the cloud?
TMT companies are moving very rapidly with their cloud adoption, and it isn’t just about achieving cost savings.
For many, the primary motivation is to satisfy business demands for increased speed, agility and responsiveness to changing market conditions. And for some, the cloud holds even greater potential to transform business models and gain an outsized edge over competitors. For these businesses, the cloud has become a primary enabler of new product development and accelerated time-to-market strategies.
By fully leveraging the cloud, leading TMT companies are transforming themselves into businesses that plan to introduce new products and services in near real-time. Once a company embraces a cloud-supported agile development model, it will be capable of rapidly piloting, withdrawing, reconfiguring, and reintroducing new product offerings based on market feedback – and all with minimal risk.
What does it mean to be cloud-enabled?
The drive to maximize IT agility while holding down costs is leading many CIOs to reimagine core IT infrastructure. Some are choosing a hybrid approach that integrates on-premise with cloud-based resources – offering both operational continuity on the one hand, and an affordable way to rapidly scale and absorb new workloads on the other.
But integrating data centers with a service provider is only the first step in a cloud-ward journey. For enterprises to become fully cloud-enabled, they must adopt cloud-native application architectures supported by new, agile models of development.
Through this approach, application components can be reused, mixed and matched to speed development. So, rather than getting caught up in releasing software changes once every six months, tightly integrated collections of cloud-based microservices can sidestep component failures and open the door for TMT companies to quickly adopt the most current technologies.
Maintaining trust in a cloud environment
A widespread prejudice among IT professionals is that on-premise data centers are more secure, more compliant and therefore more trustworthy than cloud-based operations. But is that true?
Although many aspects of security are the same for cloud environments as they are for on-premise data centers, the cloud is highly interconnected. This makes it easier for traffic to bypass traditional perimeter defenses. Moreover, since virtually everything in the cloud is virtualized, security is more software- than hardware-driven. This has pros as well as cons: while cloud security is heavily automated and dynamic, it is also possible that misconfigured cloud-security settings can expose highly sensitive data to the world.
Bonds of trust with customers take years to build, and failing to safeguard their data and privacy can destroy them very quickly. Yet this threat is just as prevalent in on-premise data centers as it is in the cloud.
So, while the risks posed by cloud computing must be properly managed, we believe that the biggest risk is letting fears over security vulnerabilities deter a business from capitalizing on the competitive advantages that the cloud offers.
Digital transformation and the cloud
In today’s landscape, TMT companies must rapidly respond to constantly evolving customer expectations. The only way for them to achieve this successfully is through digital transformation, enabled by the cloud.
Businesses that are leveraging the cloud to achieve digital transformation are now reporting rapid growth and improved efficiencies. We believe that the cloud paradigm will help transform TMT companies by accelerating their capabilities to roll out new products, gauge customers’ responses and make rapid-fire adjustments. And by applying cloud-based analytics to all the user data that they generate, these companies will gain far greater insights into customer behavior than was ever before possible.
To design, deploy and secure applications that can be offered as services in this way, companies need to acquire a new agile mindset, along with a cloud-based development model that makes it feasible to modify, track and protect hundreds of moving parts on which these applications depend. However, while the complexities will increase, so will the payoffs. As service-centric applications become the basis for new subscription and pay-per-use business models, new sources of recurring revenue will emerge, enabling the entire business to run that much faster.
TMT companies that cling to a traditional, application-centric development model will fail to keep pace with today’s unrelentingly dynamic markets. Leading players have already moved key applications to the cloud and are reaping the benefits, while the most forward-looking are using the cloud to re-envision how they roll out new products and respond more rapidly to customer demand.
Dave Padmos is EY Global Advisory Technology Leader and EY US-West Advisory TMT Leader, leading more than 1,500 client-serving professionals. Ken Englund, is North America Technology Advisory Services Principal, Ernst & Young LLP US, focused on helping technology companies solve critical business issues. Explore the latest EY insights on how TMT companies can become cloud-enabled enterprises here.
The views reflected in this article are the views of the authors and don’t necessarily reflect the views of the global EY organization or its member firms.