Demand for digital services and business continuity solutions has increased significantly in Australia during the pandemic. And Gartner estimates that Australian enterprise IT spending will increase by 3.6 per cent in 2021.
But will businesses spend that money on IT infrastructure that reduces risks and increases efficiency?
Of course, cloud infrastructure can help achieve these goals. It can support a strong business case for moving from a CapEx to an OpEx model while focusing on cost reduction and control.
Here are some current cloud issues resellers should consider.
Agility for a smooth digital transformation
Companies focusing on cash flow may be considering downsizing their offices and other facilities. A key question for them is whether to switch to cloud infrastructure or stick with on-premises IT.
The benefits of moving IT infrastructure to the cloud are well documented. It is no surprise that 42 per cent of Australian businesses use some form of paid cloud computing.
But cost and complexity have held back some organisations from updating legacy applications, originally designed for on-premises, to work on cloud platforms. Moving legacy applications to the cloud can be difficult and costly – although public cloud offers a faster, less complex and less costly route.
So, some companies are at an IT crossroad: do they invest in upgrading legacy on-premises infrastructure for applications they have kept there out of necessity rather than choice? Or, do they invest in moving workloads to the cloud?
Economic uncertainty and an increase in the number of people working from home have made cloud migration more appealing.
Moving to cloud can also accelerate digital transformation.
Migration costs and complexity are also becoming less of a barrier with the use of public cloud and open source.
These factors have made the cloud a genuine and compelling alternative to on-premises IT. And it is one that will help improve performance, efficiency and reduce business costs.
The success of “born in the cloud” organisations that have grown rapidly to dominate industries shows that the balance of cloud risk and reward may have shifted. More organisations may be wanting to emulate their agile, digitised business models which quickly scale up or down to meet changing market demands.
This trend, and the falling cost, complexity and risks of cloud migration, have in our view tipped the balance in favour of moving legacy applications to the cloud and enjoying the benefits of an OpEx business model.
Focus on reducing and controlling business costs
IT leaders have traditionally focussed on bringing competitive technological advantages to their businesses. But now, cutting unnecessary costs is just as important.
They can do this by lowering software licence costs, reducing storage complexity, virtualising databases and integrating applications and workflows with operational and inventory management systems. They can also use Managed Service Providers to streamline spending.
While this is creating many new revenue opportunities for IT resellers, it is also putting them under increasing pressure to reduce costs. To mitigate this downward pressure on margins, partners are creating differentiated services.
By employing best practises in such areas as cloud migration audits and roadmaps, technical design, process automation and support contracts, and by reducing the costs of exiting cloud services, these channel businesses are reaching new heights.
What’s next?
IDC has estimated that by 2022, empathy among brands and for customers will drive ecosystem collaboration and co-innovation among partners and competitors, driving 20 per cent of the collective growth in customer lifetime value.
This might involve use of a Cloud Service Provider Partner which provides cost efficient IT infrastructure to help organisations predict their business costs. This can help them provide a better customer experience.
One such partner is us: OVHcloud. We offer a simple, multi-cloud, accessible, reversible and transparent cloud platform that can help businesses through their digital transformation.
As businesses continue to experience uncertainty, many will prioritise essential, short-term IT projects that involve minimum exposure to risk and capital costs.
Some IT leaders will view this uncertainty as a reason to adapt and strengthen their business models by working with channel partners.
We believe that resellers which adapt their business models quickly to these changing customer dynamics – by accelerating their multi-cloud managed services offering, for example – will find new ways to differentiate their businesses, add customer value and boost sales.
