Indeed, APAC financial institutions are transforming their businesses through new customers offerings empowered by data analytics, artificial intelligence and advanced back-office digitalisation. These rapid transformations were enabled by cloud computing as it has increased their ability to transfer a significant amount of financial activity to the online environment.

The shift is expected to become the new normal as public cloud spending by financial institutions in the Asia-Pacific region will reach $18.1bn in 2024 according to IDC. Similarly, 85% of the leading banks in the region will curate an infrastructure strategy by 2023 through coalescing on-premise or dedicated private clouds and multiple public clouds.

However, APAC financial institutions are still facing many challenges in their cloud journey as they have to modernise their legacy infrastructure and are trapped in multiple data silos. It was recommended that they approach cloud suppliers to solve their infrastructure issues from the start.

Another problem might also be the cost of moving to the cloud. Large companies that have a high dependency on legacy IT will have higher costs of migrating to the cloud.

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Indeed, a study by Adapt showed that the share of IT storage and processing performed by public cloud environments will rise to 47% by 2023 due to the digital transformation happening during the pandemic. However, this quick move to cloud environments led to a new set of challenges that business leaders hadn’t expected.

The most important challenges found during cloud migration are dealing with legacy systems and applications, architectural challenges, compliance issues, lack of internal cloud expertise, data security, cost of migration, and ongoing operations. Due to a lack of planning, organizations are rethinking their strategy.

It was stated that around 18% of organizations are now using more than five public cloud environments while 9% are moving workload back from the public cloud. Businesses are becoming frustrating by the complexity of multi-cloud environments, which need more investments and experts to manage.

It was also found out that productivity tools, customer apps, collaboration tools, mission-critical IT applications, and data storage are expected to consume 62% of cloud workloads by 2023. It is then vital that cloud providers recognize the complexity of their multi-cloud environments and try to work cooperatively with other vendors to give organizations a better view of their assets.

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Indeed, many businesses including financial institutions have started to adopt hybrid working and relying more on the cloud for continuity and productivity. Gartner estimates that cloud spending is only going to increase in the near future.

As the pandemic spread everywhere, financial institutions made the shift to cloud services in order to help internal and external operations run as efficiently as possible. It was reported that the number of financial services firms’ workforces operating from home has increased by 40% in the wake of Covid-19 and more of them use the cloud to ease working from home.

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Indeed, many organizations stated their desire to move more than 75% of their apps/workload to the cloud while 86% of companies chose cloud options in their decision process for new applications. Besides, 40% of companies went for the cloud as their first option. The study thus highlighted that cloud is slowly becoming an ‘all-in’ business strategy.

Moreover, with the rapid shift to new infrastructure, significant issues of complexity and overload increased over the past year. Indeed, it was stated that the increased workload and security risks resulted in higher exposure. 60% of organizations also reported an increase in threat and attack complexity, which has led to weaknesses in legacy security toolsets.

Hence, this rapid move to the cloud has helped reduce these challenges as well as secure their infrastructure. Around 80% of organizations have then started to increase their spending on security for the cloud. By doing so, they have also implemented automated security processes to detect and respond to attacks on cloud workloads. Besides, more than 50% are now offering cloud security training, while 36% added security staff.

Therefore, around 90% of respondents believe that their organization’s public cloud security spending will increase over the next 12 months.

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Indeed, USPTO declared to be advancing in its modernization efforts and that cybersecurity, resiliency, and cloud represent three key points it is working on.

With the number of cyberattacks rising, it is essential to be prepared and build a strong defense system to protect its infrastructure. It stated that agencies should have a backup plan to get back online if their remote devices short out as well as start moving data to the cloud in order to be more agile and innovative.

Moreover, USPTO is also working in the stabilization of its critical systems to increase security, resilience, and automation. Over the past two years, the agency has already been able to stabilize 22 of its 26 systems.

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As every organization is adapting to their business models to match the quick pace of change, only a handful will manage to survive without cloud services. It is then expected that almost all enterprises will implement cloud strategies in the upcoming years.

Hence, we have talked to experts in the industry so they can shed light on the future of the cloud.

Why switch to a cloud strategy?

Over the last year, since the global pandemic started, organizations have reverted to remote working, Dan Curtis, Manager, Cloud Validation Services at IDBS tells me.

He points out that this transition had begun before the pandemic in many technology-driven organizations but acceptance as a viable working solution is now accepted by all. It will then be very difficult for businesses to enforce a return to the workplace, with a little argument to show it as not being suitable or against their policies.

As a result, Dan emphasizes, supporting a widespread remote workforce will play nicely into the adoption of a Cloud-based infrastructure. Sustaining the security of tin-based on-premise installations will continue to become a cost that business sees as unnecessary. Indeed, on-premise not only requires security around server rooms but also security around office buildings and access control. This is without mentioning the effort to keep systems up to date and maintained.

Hence, he believes that all this effort and cost can easily be dismissed as a service with Cloud Infrastructure with the added benefit of faster time to value and easier budgeting.

Moreover, Tomasz Gawlik, Cloud Platform Team Leader at Boomin, highlights a few reasons why businesses should adopt cloud infrastructure.

First of all, he starts by saying that it’s all about the pace. You can have the greatest idea, but if it’s not available to customers there’s no gain for anyone. Adopting the cloud can help to simplify the process of acquiring resources needed for the business to exist and help with ever-growing demand if needed.

Besides, Tomasz continues, with cloud adaptation, the business will gain access to a massive toolkit, full of useful and well-maintained capabilities, ready to use, so the business can focus more on its core domain and not be in need to re-invent some of the common needs which every company needs.

Tomasz also adds that cloud adaptation helps to share security responsibilities between the business and cloud provider. Security is very important for every company, no matter the size or maturity and it’s hard to get right. Although adopting cloud does not mean you can stop thinking about security, it can significantly reduce the scope which a business needs to look after.

‘Adopting the cloud will help to acquire talent from the market, as engineers are more likely to choose the place of work where they could use the latest cloud technologies.’

Furthermore, Dan Hills, Head of DevOps at Costain Group PLC, explains that, before the COVID pandemic hit last year, his company had already been forging a significant role in digitizing and transforming National Infrastructure projects within the construction industry – in the provision of data insights to complex delivery projects, by utilizing digital twin technology, adopting drone and GIS mapping techniques or enabling more effective collaborative working.

Hence, by having already gained cloud experience within the various cloud delivery models (SaaS, IaaS, PaaS), he highlights that his company felt they had a real significant head start as the pandemic hit. Indeed, having the ability to scale out their cloud Infrastructure capabilities really allowed them to meet the demands and pressures that traditional office workers were able to transition to working from home as seamlessly as possible.

Besides, he keeps on, due to their significant cloud presence, this working from home requirement was completed without the need to visit any of their offices or off-premise data centers and completed fully using a mixture of Iaas, PaaS, and SaaS services. As a result, this saved the need for any costly and (at the time) highly demanded on-premise infrastructure of clunky connections or legacy server efficiencies as well as taking the pressure of making swift architectural and costly CAPEX decisions.

By using their cloud infrastructure, it gave them the opportunity to get crucial feedback from their various logging tools to make significant decisions based on simple data and analysis, as well as the ability to collaborate much more easily and effectively with end-users, many of whom were working from home for the first time. This analysis and collaboration also gave them the confidence they needed to provide an extra resource or bandwidth quickly and effectively (or indeed the ability to scale back and save costs) as well as build up the confidence and new relationships across the business simply that was not there prior to when the pandemic hit.

Dan Hills emphasizes how proud he is of his team knowing that the pandemic could have easily bought business processes and productivity to a swift halt. Yet, with the upheaval that the last 12 months have thrown at the industry, they have been able to maintain their roadmaps, targets and stay consistent with business strategies as well as evolve and enhance the way of working for many.

Hybrid cloud VS multi-cloud

According to Tomasz, in a hybrid cloud solution, the company possesses both on-premises resources and cloud resources. This might be either a permanent state due to security concerns or cost considerations or a temporary state, migrating to the cloud.

Dan Curtis notes that hybrid cloud consists of a mix of cloud-based infrastructure and Dan Hills adds that a hybrid cloud infrastructure utilizes different types of more than two cloud environments, such as on-premise, private and public cloud.

Dan Hills highlights that, in a hybrid model, by utilizing the public cloud, you can extend the capabilities of the businesses’ current on-premise IT infrastructure without potential costly CAPEX investment. Hence, this can safeguard existing on-premise investments and create a realistic timeline and strategy to modernize applications and processes in a controlled and budgeted way to fit the business needs.

Moreover, Dan Curtis also adds that you may have databases located locally on-premise and host your web application in the cloud through AWS or Azure. This can be a good first leap into Cloud-based infrastructure for organizations looking to migrate. They could retain the control locally of the parts of their data that are sensitive whilst hosting end user-facing parts of the system in the cloud.

Hence, a Hybrid cloud can provide a good cost control capability by adding constraints around the locally hosted parts of the system whilst enabling other less costly areas to scale.

On the other hand, Dan Curtis points out that multi-cloud is an architecture choice to host your systems across different cloud providers such as AWS and Azure. For Dan Hills, a Multi-cloud infrastructure spans multiple public cloud environments from different providers and vendors such as Azure, AWS, GCP, etc.

There are a few benefits as the different providers do have areas of specialism and technological choices. Adopting a cloud platform that is aligned with internal development architecture choices can help with integration and deployment mechanisms. Besides, there are also different cost models for the providers which could provide savings by hosting certain parts of the application in different clouds. But there is a greater risk though, as your applications are not only sensitive to a single provider and problems, they may have but to multiple providers.

Dan Hills points out that a multi-cloud model allows the business to operate potentially much more quickly than in a hybrid model, choosing the best architectural solution across multiple vendors and not be tied to vendor locking to not become dependent on one provider’s technology. This diverse infrastructure from a number of vendors can be more efficient and cost-effective

With a multi-cloud solution, Tomasz adds, the company’s system might be designed in a way, to be speeded across multiple public cloud providers.

The benefit of multi-cloud might be higher availability of the system – as the risk of multiple cloud providers having similar outages at the same time is much lower than a single one. Another benefit could be that business can select across a wider catalog of cloud provider features and use the one which is the most beneficial.

Which cloud deployment?

Tomasz, Dan Curtis, and Dan Hill all emphasize that the type of cloud deployment always depends on each business as each has benefits and merits.

Indeed, Tomasz notes that there are a lot of things to consider and there’s no solution that will be the best for everyone. He still advises that a business should aim to use one of the main public cloud providers (AWS, Azure, Google Cloud). Within the public cloud, there will be many potential strategies – usually investing some effort and using services hosted and provided by a provider (Software As A Service, Platform as a service) over “raw” virtual machines (Infrastructure as a service) will bring more benefits over time, as with those configurations there will be more responsibilities shared or taken care of by cloud provider, thus leaving more time for core business domain development time.

Besides, he continues, there should be some extensive planning and trades-off review done before trying to go into a multi-cloud strategy. Although this model is tempting, it brings lots of complexity and cognitive load into engineering times and potential benefits might not be sufficient to justify this move.

Dan Hills gives the examples of Costain, which is already on a journey to migrate to a multi-cloud model from a hybrid cloud model, so as to benefit from the capabilities of cloud infrastructure and cross-platform tools that provide security, affordability, agility, reliability, and speed to market.

Hence, he advises that choosing to move to a hybrid or multi-cloud setup should not be the end goal, but it should be to know which of these strategy models will provide your business with the best future scope opportunities, options, and cost models to meet the business requirements.

Dan Curtis also highlights that the benefit the cloud brings is as variable as the different businesses and technology choices out there. Indeed, organizations with different levels of maturity will have different needs and want from the Cloud.

He adds that, personally, if he was to make a choice he would go all in, move everything to the Cloud. But he still advises making sure organizations have good processes and controls in place to mitigate against scalable costs and train your workforce to think differently in using the cloud.

‘Developing applications natively for the cloud provides many benefits, performance, resilience, security, accessibility, pay as you use, the list goes on.’

Cloud strategy

Throughout the pandemic, public cloud vendors like AWS, Azure, and GCP have provided a vital service for quick, cost-effective solutions to cope with the challenges COVID has thrown at the industry, Dan Hills tells me.

Hence, as businesses emerge from the post-pandemic era, the relentless technology investment and service progression from these public cloud vendors will provide more adoption, reliance, and dependency from businesses for their digital transformation.

Moreover, Dan continues, as public clouds vendors technology and investment grows more dominant and becomes more and more mainstream, the adoption of multi-cloud will become more prevalent as the days of on-premise infrastructure and hosted services will naturally be superseded by these public providers as the on-premise infrastructure becomes the end of life in local businesses data centers and private clouds become defunct or hosted solutions are migrated to the cloud.

Besides, Dan Curtis believes that if a business migrates to the Cloud, no matter which strategy best fits, whether that be hybrid, multi, or full cloud, it will ultimately end up being a full cloud.

‘As you use it more, the benefits become more evident, and the older ways of working become redundant. Once that culture shift has happened the outcome is inevitable,’ Dan Curtis tells me.

Moreover, according to Tomasz, container technologies seem to be the most popular choice for cloud deployments. Indeed, Kubernetes seems to be the winner of container orchestration technologies, with each major cloud provider is offering its own hosted version of Kubernetes. There’s a variety of features being improved or added each week for capabilities such as monitoring, security, configuration management, auto-scaling, fault detection, auditing, and high availability.

Tomasz believes that, in coming years, there will be fewer reasons to try competing with those services by trying to maintain Kubernetes clusters in their own infrastructure or on bare virtual machines.

Another cloud strategy worth noticing is serverless, Tomasz adds. With serverless, cloud provider customer doesn’t need to be concerned with application framework and the majority of bootstrapping, as this is maintained and provided by the cloud. Serverless architecture requires quite high granularity and enforces small functions which are all connected using various communication technologies. A high number of functions brings lots of challenges with observability, local development, and visibility, but additional tooling will be created and exposed by cloud providers.

Challenges of migrating to the cloud

For Tomasz, the first challenge is to acknowledge that cloud migration is rarely done if the business wishes to be up to date with the latest technologies.

He points out that there are various ways to migrate into the cloud, one being called “lift and shift” where machines are migrated into cloud provider virtual machines (IaaS), but even though there might be some benefits from this movement, there might be an appetite to migrate the solution to other solutions (Software as a service, container technologies, serverless).

The other challenge might be business continuity, he continues, as in the transition phase, the business might need to operate from both on-premises solution and the cloud. A solid and rigorous strategy must be in place, as the problems which might occur could be downtime or loss of data integrity.

‘The business must be aware that if migration to the cloud is going to be successful and beneficial, it will require new ways of thinking and knowledge of new patterns and technologies. Existing team members need to have time to experiment and learn.’

In Dan Curtis’s opinion, the largest challenge is a culture shift and educational shift in the personal development of the new technology being adopted.

Indeed, he continues, industry sectors that have become used to having “control” over their infrastructure can see the Cloud as an insecure, untried, and tested threat that works for others but not them. There is a shift needed in IT departments to give up the day-to-day ownership of the server rooms and focus on efficiency drives to become more flexible and streamlined. This doesn’t need to mean job losses, but retraining in Cloud Architecture as well as looking at better ways to deploy and utilize the Cloud whilst dropping the more mundane tasks of hardware upgrades and network cabling. There is a shift from installation and hardware maintenance, to software configuration and architecture.

Besides, a general awareness of resilience in the Cloud and incorporating new approaches to test live systems such as Chaos testing will open new doors of opportunity and growth.

Over the last couple of years, Dan Curtis highlights, the awareness of the secure Cloud, the benefits and opportunity have become more recognized, especially by some of the slower-moving industries like Pharma and Biologic development. Indeed, these industries are heavily governed by regulations, which makes moving to the Cloud a challenge.

However, savvy individuals work to comply with the regulations by looking at them differently, and slowly the regulations are updated, enabling industry-leading organizations to adopt the new ways of working. New players to the sector find it easier to adopt new technologies and infrastructure pushing older, slower organizations to make the shift to remain competitive in sectors they have previously dominated.

Finally, he continues, another major challenge is cost control. In a scalable infrastructure, it is very easy to spend money, with little governance. Auto-scaling of systems and cost models based on data flow can easily get out of control with no prior approvals. Often leading to massive overspend. Proper control of this and monitoring is essential to retain the efficiencies offered by the Cloud.

Dan Hills highlights the main challenges linked to cloud migration:

• Security – Although the cloud has come a long way since its early days, the complexities of data security, the regulatory requirements of GDPR, and the penalties are difficult choices to trust the outsourcing of their data to a 3rd party. However, having a close and robust relationship with your partner can provide the confidence and trust to recommend the right model, applications to provide the assurance, security, and tools that the data is secure.
• Cost Model – Moving from a CAPEX model to an OPEX model is a fundamental change to how IT is costed and budgeted historically. There are pros and cons to both expenditure models, however, it’s a significant change to the culture that businesses have to understand and adopt migrating to the cloud. OPEX does provide the flexibility to increase or decrease server capacity at any stage to fit demand and there are no expensive hardware vendor warranty or support to maintain upkeep nor local data centers to provide cooling, DR capabilities, or consuming electricity, reducing your carbon footprint.
• Legacy Applications – Some businesses are still reliant on legacy applications which are critical to productivity where a move to the cloud may at this stage be unobtainable. However, the tools that are constantly being provided by the public cloud vendors along with the explosion in SaaS models is making this scenario much less of a challenge when it comes to migration in the current era
• Control – Not having full visibility or control within the public cloud does cause issues, by hosting our IT infrastructure within the cloud we are reliant on the vendors to ensure there is no interruption to service. If there is an issue at the vendor, you have no control over the downtime experienced, instead, wait for updates and resolution. This is where a multi-cloud environment can help by pushing the Core business IT services to a multi-cloud DR scenario, the likelihood of both public cloud vendors having downtime at the same time is negotiable.
• Inhouse Knowledge – With the IT skills gap constantly evolving as new tech, services and platforms hit the market, ensuring in-house IT departments have the right skills is a constant challenge. This lack of knowledge or understanding of cloud technology in IT departments can create cultural and technological barriers to enhance the businesses cloud adoption which has to be solved by consistent improvement techniques like regular training opportunities, baked and ringfenced into sprints, as well as team hackathons and show and tells can enhance teams adoption and learning capabilities.

Cloud: a key driver of business innovation in the future?

Tomasz believes that each day cloud providers are improving and hardening their solutions, gathering feedback from a big variety of customers – learning from mistakes and listening for what are the most demanded features. Instead of trying to mirror the solutions on-premises, it’s much better to “stand on the shoulders of giants” and benefit from it.

With every business where competition is high, he notes, the ability to focus on the core business domain is crucial. The more time is being spent nurturing that, the greater the chance is for success.

‘Globalization of success can be a key driver for many businesses. The ability to quickly spin up cloud resources almost everywhere in the world instantly could be beneficial for expanding into new territories or simply examining the market.’

Similarly, Dan Hills doesn’t see any future innovation, no matter how significant, not have a cloud presence. With the statistics showing an increase in local IT server rooms being decommissioned and businesses’ adoption of cloud providers growing rapidly, he points out that all business innovation has a reliance and driven by the cloud and its technologies.

‘With the advent of 5G, AI and machine learning, autonomous cars, digital twins, and real-time data insights, this reliance will only become more and more baked into our working life and society as the decade progresses.’

On the other hand, Dan Curtis doesn’t think the cloud will be the key driver. However, he says, it certainly has a part to play. It opens up people to thinking differently. Scalable resource, remote resource, only spin up what you need when you need it, no extensive server rooms, access from anywhere, anytime, easily sharing data in large or small quantities.

The key driver, according to him, is thinking differently. Not doing the same thing over and over, in the same way. ‘You must look at the end goal, not the journey, and then look at how you can achieve that more effectively by learning from previous successes and failures.’

This will also force people to retrain, learn new things and new ways of working, which will drive innovation for those with the mindset to continuously evolve and improve.

Special thanks to Dan Curtis, Dan Hills, and Tomasz Gawlik

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Following the impact of the pandemic, the company realized that it was time to accelerate its digital transformation and shift its IT infrastructure and management into the cloud so as to better meet the business and customers’ needs. Hence, this migration should make scaling easier and increased agility simpler as consumer demands shift and evolve continuously.

Moreover, the company is also making the changes in order to reach environmental, social, and corporate governance (ESG) sustainability objectives. Indeed, Oracle and Azure’s operations both use renewable energy, thus, migrating to the cloud will help the company reach its 2030 carbon neutrality goal.

Therefore, TIM’s data center-to-cloud transformation will involve the migration of 7,000 servers, 35,000 cores, 1,200 databases, and 15 petabytes of storage into a hybrid Oracle Cloud Infrastructure and Microsoft Azure environment. TIM Brazil is then one of the first telecom companies in Brasil to move 100% to the cloud.

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Indeed, various government agencies have started to speed up their cloud projects in the last year so as to ease remote work for employees, secure information as well as create new services for residents. Besides, many states turned to cloud services to improve their unemployment systems.

As a result, Google Cloud is working with several states and local governments to help them make the move from legacy on-premises systems to cloud-based environments. Similarly, last fall, Rhode Island launched a Virtual Career Center with Google Cloud and Wisconsin worked with Google in order to improve its unemployment insurance claims processing.

The main challenges for these communities are the continuity of operations and employee training on cloud technology. Indeed, the process of migrating a system can be overwhelming when it’s already hard to keep everything from falling down.

Hence, it was recommended to start modernization work within a single domain that can be self-contained and single-sourced or with smaller Internet of Things deployment projects that are not mission-critical. This will enable IT teams to learn how to manage the system without having to do a full-scale data center migration.

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Indeed, it was reported that 95% of organizations have moved their applications to the cloud but with difficulty, and that 72% had unfortunately moved their applications back on-premises. According to the respondents, this is due to the fact that these applications should not have been moved to a public cloud in the first place, they faced technical issues with public cloud provisioning, they experienced degradation of performance, and finally, they witnessed unexpected cloud costs.

Hence, this shows that many businesses face complex challenges during cloud migration, which revolve around which applications to migrate, a lack of visibility into application dependencies, and a poor understanding of how workloads will act in the public cloud once they are migrated.

Moreover, the survey also stated that, despite the challenges, many IT leaders still consider moving to the public cloud a key strategy for their businesses. Thus, 68% of respondents have already migrated 25% or more of their applications to public clouds and 78% of companies are investing in public clouds at the same or an accelerated pace. Besides, 81% of respondents reported that they are using more than one public cloud provider.

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Indeed, the study found out that 80% of enterprise IT respondents are planning to migrate 50 on-prem apps or more to the cloud in the next 12 months while 74% plan to migrate anywhere from 11 to 100 legacy warehouses to the cloud in the next 12 months.

Moreover, it was also discovered that IT budgets for cloud migration projects are substantial, with 45% of participants stated they plan to spend more than $5 million on legacy migrations. Only 10% of firms are planning to spend more than $40 million on cloud migration projects.

This huge movement towards the cloud can be explained by the need for organizations to innovate – offer better and more customized products, services, and customer experiences with optimized costs –  and the need to stay relevant and competitive. Besides, the spread of the pandemic also affected many enterprises as they found themselves with no other choice but to implement a cloud solution.

Finally, the study demonstrated that we are still in the early steps for migration maturity as less than 18% of organizations have begun their first cloud migration project and less than 13% have begun to migrate any of their applications to the cloud.

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