Digital Transformation with Cloud Technology [Part 1/4 of Google Cloud Digital Leader Training Series]

This is part of a 4 part series on Google Cloud Digital Leader Training Professional Certificate course available on Coursera:
– Introduction to Digital Transformation with Google Cloud
– Innovating with Data and Google Cloud
– Infrastructure and Application Modernisation with Google Cloud
– Understanding Google Cloud Security and Operations

Cloud technology though is the trend now, but it is actually not something new. It was invented in the early 1960s by Joseph Carl Robnett Licklider.

Cloud Technology

If we look back in history, one would notice that technology breakthroughs that dotted our history have triggered thousands of innovations. And it was not triggered in a linear way, but in waves. There are numerous examples – the printing press, the steam engine, electricity, petrochemical automobiles, the first computers, machine learning and now cloud technology.

There are inventions throughout history that triggered thousands of innovations. It is called “Kondratiev waves” or “innovation waves”, and it ranges for a period of 40 to 60 years.

Kondratiev Waves – Wikipedia

Let me illustrate, take the printing press for an example. As the name suggests, the printing press allows for the mass production of printed matter. Mass production with lower costs meant that people had increased access to written material, which in turn improved literacy. In other words, it help disseminate knowledge wider and faster than before. Knowledge sharing increased at an exponential rate due to the printing press. It laid the roadmap for the Industrial Revolution and heralded an age of prosperity for Europe.

Though it may seem unremarkable today, the printing press was nothing short of revolutionary when it was first introduced. It led to a broader recognition of intellectual property through patents.

Another example is the electricity. Civilisation is forever changed by the discovery of electricity. It led to a spur of invention of labour-saving devices both at work at home. People’s daily activities were no longer dependent on sunlight. Work could be done both during the day and at night. It increased demand for consumer goods.

These two examples are examples of paradigms shifts. It changed the way we work and engage with the world. It created value that did not exist before, as well as new supply and demand. This is the same with cloud technology. We are now seeing the transformation on how cloud technology is impacting businesses to create value, new ways of working, and new technologies.

What is cloud technology?

Cloud technology is the delivery of computing services over the internet (“the cloud”) – including servers, storage, databases, networking, software, analytics and intelligence. Essentially, we’re talking about technology and processes needed to store, manage, and access data that is transferred over the cloud rather than the data that remains in your local computer hard drive.

For most large organisations, they would need to invest a substantial amount of money upfront to set up the necessary infrastructure that would store and process their data. And as they grow, their cost of maintaining and expanding the infrastructure substantially increases too. Cloud technology helps to elevate these constraints and it can do much more.

How does cloud technology help businesses?

There’s a misconception that when we replace something, the function of the new technology is supposed to ease or solve something we need – like the e-mail which replaced the traditional snail mail. But in fact, the new technology does that and much more. That’s also the same for adopting the cloud.

To illustrate, let’s take two companies – Nintendo and Kodak as examples.

A case study – Nintendo

Nintendo started off as a card company in 1889 to produce handmade hanafuda cards. In 1966, they ventured into the toy business, and subsequently in 1972, they ventured into the video gaming industry. You can see here that they have consistently embraced new technology to transform their business and become a leader in the gaming industry. They were among the pioneers to introduce gaming consoles and mobile gaming devices.

Yet, they never settled or got complacent. Instead, they continued to embrace new technology and revolutionise mobile gaming. They launched Pokémon Go in 2016, and the first cloud gaming console, Nintendo Switch in the subsequent year.

Read also: Pokémon GO Fest 2020 – Day 1

This is why Nintendo is still big today. They have jumped from one dying platform to the next, consistently maintaining and expanding its market share and customer base along the way. They have focused on why they operate and not how they operate.

Successful companies consistently focus on “why” they exist not “how” they operate.

A case study – Kodak

Kodak was founded in 1888, selling inexpensive cameras and its consumables. It was the most famous name in the world of photography and videography. Yet the company declared itself bankrupt in 2012. How did the king go bankrupt?

This is because as technology progressed and the digital camera was invented, the use of films and printing sheets gradually came to a halt. The ironic thing was that the inventor of the digital camera was actually an electrical engineer at Kodak at the time. When he brought his invention to the management, they dismissed it as cute.

Kodak’s management continue to fail to embrace digital photography as a disruptive technology, even as its researchers extended the boundaries of the technology. They ignored it because the business of films and paper was very profitable at the time, and if these items were no longer required for photography, Kodak would be subjected to huge losses and end up closing down the factories which manufactured these items. As such, led to the demise of Kodak.

Optimise internal resources

Usually when an organisation shifts to the cloud, they will need to redesign and redefine relationships with their employees, customers and partners, resulting in a company-wide digital transformation.

By modernising old infrastructure, businesses are able to solve business problems at a much faster speed, and gain new insights from their data. This in turn, helps the company to optimise internal resources, and focus more on delivering better value to customers.

It also helps meet with the ever evolving and increasingly personalised customer expectations.

Data analytics

Cloud technology can help to map, understand and predict human behaviour and biology, global industrial systems, and every other complex issue and environment. The cloud’s compute capability paired with large amounts of data can create experiences we have never known before.

For example, the Internet of Things, IoT, refers to everyday objects or devices that are connected to the internet and are able to send and receive data. IoT devices have become a part of our everyday life that we cannot live without going online anymore. We live online. In doing so, we also receive and generate vast quantities of data at every moment. With that, businesses are able to build highly accurate statistical models to predict complex behaviours and use that information to anticipate intent.

Cloud technology is powering a new range of applications that are continuously learning and improving. In addition to its predictive capabilities, the cloud delivers high performance analytics and enables businesses to reduce downtime, achieve more accurate supply planning and maintain leaner operation organisations that have more efficient systems and less waste.

Redefining collaboration

The power of the cloud also changes the way we work by automating processes and creating open and real-time collaboration opportunities between people globally.

Why should you hop onto the cloud technology bandwagon?

Any business leader who considers cloud technology as not relevant to them or as a threat to the way they have done business, risks facing a fate similar to Kodak. If you do not embrace disruption, you risk ceasing to exist entirely.

Abandoning old technology for a new one often requires a leap of faith and to continually adapt as new technologies create new paradigm shifts. Adopting new technology empowers faster innovation, flexible resources and economies of scale.

But if you don’t, you risk being left behind, or even worse, cease to exist.

Potential challenges to adopting cloud technology

Changing the way people work

One major challenge when implementing cloud is changing the way they work. Firstly, because as consumer expectations change, business models must adapt to be relevant. Secondly, the traditional advantages of size and scale is now obsolete – it’s no longer as differentiating as it used to be. The universal availability of cloud technology gives equal opportunity to businesses of all size to succeed.

So, organisations need to be innovative, agile, quick to market and highly customer focused.

Innovation is about doing something in a surprising new way. To do that, people need to be able to try new things and failing without judgement. They also need to be equipped with the tools they need as well as having access to the information they need to develop fresh and realistic ideas. How teams are structured, how content is managed, and how communication flows across an organisation are all elements that significantly affect innovation.

Upgrading legacy infrastructure

Another major challenge is transforming the legacy IT backbone structure with which the organisation currently runs. This will be especially challenging for large organisations that have deeply entrenched and complex systems, hardwares and processes that need to change.

There will also be a need to define new governance policies to ensure that security systems are in place. There will also be a need to integrate systems and information across multiple environments.

But with cloud computing, organisations can scale in the cloud and pay for what they use when they use it. This is unlike traditional IT, which required significant upfront expenditure to ensure that the hardware is in place in case there are peaks in demand.

Cybersecurity Policies

Since with the cloud, everything is online, businesses will need to grant access to applications and relevant data with high degree of security. Since the cloud provider will take care of the hardware and software, the onus is on the businesses to be responsible on the data and resource access. This means that businesses need to think careful about appropriate governance and policies for granting and restricting access to information and applications.

Businesses will also need to comply with regional regulations as part of security and governance.

Why can’t you do analytics in your own backyard?

Sadly enough, you just don’t can’t get that kind of computing power.

Right now, the cooling requirements for quantum computing (that can compute large amounts of data in mere seconds) can only be met in large industrial environments. Quantum computing requires absolute zero (or negative) temperatures to operate. Now, only cloud data centres have the ability to meet these conditions where it can be created at scale.

Did you know?
Google’s quantum computer can solve a mathematically designed calculation in 200 seconds that would otherwise take 10,000 years to solve in the world’s most powerful supercomputer, IBM’s summit.

So for now, the only option to access such computing power is through data centres. Companies like Google Cloud, Microsoft Azure, Amazon Web Services, etc have all heavily invested in their own IT infrastructure, and offer organisations around the world to use their digital platform.

In conclusion

Cloud technology is definitely here to stay, and is readily available to everyone. It allows businesses to combine powerful computer technology with vast amounts of data to create new value.

The question is, to embrace it or to risk varnish into irrelevance?

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