News Article

The Cloud: Businesses’ Invisible Ally

By Andrea Villar | Thu, 05/27/2021 - 18:51

You can watch the video of this panel here.

Until a few years ago, the cloud was seen as a far-off tool for companies. Today, driven by technological acceleration, the business community is already looking for ways to integrate it into its daily operations. However, there are still many doubts about its implementation and benefits, agreed panelists during the second day of the Mexico Business Forum 2021 Virtual Edition. “What was once just a storage vehicle is now part of major business processes and developments,” said Javier Allard, Director General of AMITI and moderator of the panel. 

Software Producer SAP, with more than 27 years in Mexico, has witnessed the evolution of companies in the country and their growing welcoming of cloud services. "Every quarter we have seen significant advances in the adoption of cloud technology," said Angela Gómez, President of SAP Mexico. She mentioned that due to the pandemic and digital acceleration, SAP has observed three main areas in which companies are increasing their use of cloud services: customer experience, supply chain and talent management. “Over the last year, all companies realized that they not only had customers, they also had to take care of them and understand how to engage with them in order to keep them. When you sell a product or service to the customer, then you have to deliver on the promise,” Gomez said.

In 1Q2021, Mexico was listed as one of the most dynamic markets for cloud, according to SAP. “That shows that Mexican entrepreneurs are investing in the cloud,” added Angela Gomez. However, she said, one of the biggest challenges remains with growing businesses. "We have identified that 95 percent of SMEs in Mexico do not yet have digital tools to automate their key processes and have real-time information to make better decisions.” 

The cloud is not only here to improve business processes but also to offer a better user experience. According to Maribel Dos Santos, Director General and Senior Vice President of Oracle Mexico, companies are already seeing real benefits from their transformation and migration to the cloud. “The past year made us much more resilient and pushed the technology acceleration forward by many years. 2021 looks like a year of recovery but it is definitely not a year where we are going to go back to normal as we knew it before,” she said.

Dos Santos also mentioned that e-commerce is also driving a shift in the adoption of the cloud, which is making companies much more agile and scalable. “The cloud is allowing the management of everything to do with customer logistics to be done in a faster and more efficient way, which creates a better customer experience,” she explained. “It has also enabled the storage of large amounts of data that allows better business decisions to be made through data analytics.”  

Hybrid and Multi-Cloud Environments Cloud 

In migrating from one location to another, companies often end up operating in hybrid or multi-cloud environments. For Julio Velázquez, Managing Director of Google Cloud Mexico, these have two main opportunities: cost optimization and access to state-of-the-art managed services that “drive the development of business transformation.” Managing these environments, he said, is a challenging task as it involves both public and private clouds. Velázquez said as applications and services are going to be hosted and operated across different locations, it is a very complex administrative task and without the support of technology, this whole infrastructure cannot be optimized.

Faced with this challenge, Google Cloud recently launched Anthos, an enterprise hybrid and multi-cloud platform. According to a study by Forrester Consulting, Anthos reduces infrastructure costs and helps customers design applications to optimize their existing infrastructure, while at the same time combining it with the cloud infrastructure in an efficient way. “This means you can leverage what you already have but also look for new, more flexible schemes,” said Velázquez. This new tool also helps improve cloud security as the service is “transitioning from traditional perimeter security to an application-centric security approach”. According to a Harvard Business Review study cited by Velázquez, some of the benefits that are driving the adoption of hybrid and multi-cloud environments are operational efficiency, performance optimization and increased agility. 

In this regard, Eduardo Gutiérrez, President and CEO of IBM Mexico, said that the recent digital transformation of companies has made the hybrid cloud one of the most relevant trends. “The open hybrid cloud platform today is the main ally and enabler that helps companies in the integration and reinvention of their business processes,” he added. “It will redefine the way companies operate, but more importantly the value they deliver to their customers.”

IBM's hybrid cloud approach gives companies flexibility to balance workloads as they undergo a digital transformation, said Gutierrez. “It is clear that business models are transforming and this is precisely because of the new reality we are experiencing. We know this requires a complete reinvention of customer experience, organizational culture and business processes,” he said. According to him, the five benefits of IBM's open cloud include security, agility, mobility, flexibility and cost-efficiency.

In July 2019, IBM closed the acquisition of Red Hat, marking the company's largest deal in its history. At the time, IBM said it hoped the acquisition would help it improve its cloud strategy, one of its four key growth drivers, the others are: social, mobile and analytics. In April, 2021, the tech giant announced the acquisition of Turbonomic, a provider of software that helps companies monitor the performance of their business applications, for over US$1.5 billion.

A Smooth Migration

When a company migrates to the cloud, shutting down its operations is not an option. For Oracle's Maribel Dos Santos, one of the factors that allows them to maintain operational continuity during this process is transparency. “The safest way to do it depends on the criteria of each company. We need to understand what type of company we are working with, understand its objectives, its process maturity and business architecture.” This way, she added, tech suppliers can better guide their customers on a safe journey to the cloud. 

Migrating to the cloud should be seen as a holistic process, added SAP's Angela Gómez. “We used to offer customers infrastructure or software as a service. Today we need to approach them in a holistic way so that they see it as a 'Business Transformation as a Service,’” she said. “In the past, companies had to first understand what the cloud was, but today the conversation has shifted to issues such as usability.” According to Gómez, cloud providers need to allow companies the freedom to choose which business area to start migrating to. “We have to understand different industries. It is not the same to provide cloud to a retail company that experiences peaks in demand than to a company that produces 24 hours a day and can face large costs if it has to shut down operations to do the migration,” she explained.

Security, a Non-negotiable

In all industries and services, security has taken a central and imperative role, to which the cloud is no exception. According to data storage company Seagate, by 2025, there will be 175 zettabytes of data in the global datasphere. That same year, the amount of data generated each day is expected to reach 463 exabytes globally, says the World Economic Forum (WEF). “Not only is data increasing but so are the places where the information is stored. This results in complex data management,” said Abelardo Lara, Country Manager of Veeam Software. 

Lara added that one of the main solutions Veeam offers is to keep information secure and backed up. “Many of our customers feel that when moving their data from a public cloud to a hybrid cloud, it is the provider's responsibility to keep their data secure,” he explained. In 2020, Veeam was the largest backup and recovery vendor in the EU, the Middle East and Africa, and the fourth largest worldwide behind DellEMC, Veritas and IBM. In Mexico, the company grew 35 percent last year compared to 2019, while in Latin America it saw 30 percent growth, Lara said.

Andrea Villar Andrea Villar Journalist and Industry Analyst