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Cloud native leads to innovation

Cloud migration and the switch to Cloud Native are not just for IT. They are necessary for the entire company to boost its innovation.

The critical challenge of enterprise innovation is the lack of time, space, and talent. According to the Hackett Group report “Improving innovation From Technology,” these factors are even more important than organizational resistance to change, fear of change, or financial barriers.

Cloud Native model overcomes these obstacles. Hackett Group explored how it helps reorient and refocus companies that switched to the cloud. According to “The Business Value of Migration to Amazon Web Services” report, up to 70% of IT, team members switch to development tasks rather than maintenance. This is clear evidence that companies achieve one of the top three cloud transformation aims: more than half of all companies and three-quarters of the best-performing ones expected that this change will enable the creation of new products and services.

Our previous article discussed how Cloud Native transformation starts and goes. However, it concentrates on overcoming obstacles and challenges on the road to Cloud Native. In Mindbox, we focus on a spectrum of benefits from the very early stages of cloud migration planning. In addition, we consider the fundamental improvement in innovation processes as the most critical affordable gift.



Cloud-era innovation sources


Data is considered the fundamental source of business innovation nowadays. In addition, data analytics provides ideas and recommendations for business and operational model change.

Thus, many companies apply the cloud model to analytics from the start. Cloud model provides infinitely superior data computing potential and far more tools and functions. Moreover, the possibility of quick and accurate insight into the company situation radically reduces the time to find solutions and create new ideas. Marketing and research company Known in the “Business Value of Cloud modernization” report reveals that 35% of companies speed up analytical processes with Managed Analytics.

Access to a dynamically growing ecosystem of solutions is an essential source of innovation in the cloud model. In addition, cloud Native, as a technology-agnostic approach, enables the integration of various vendors and platforms and open-source repositories. The traditional model doesn’t offer this scope of flexibility.

Technology is a source of both business models and product innovations due to the deep and surrounding digitalization of the products. Except for physical attributes, the digital shell of the product decides its success. This shell enables us to create ecosystems dynamically adapting to the moods and needs of customers. Some business sectors, such as car rental (sharing) or food delivery, are hard to imagine without its digital ecosystem – a set of applications combined with external cloud services, IoT, geolocalization, etc. But only the Cloud Native paradigm allows orchestrating, scaling, and dynamically modifying an entire range of technologies to serve it.

Prototyping and experimentation that precede full-scale solution implementation are principles and good practices in a cloud-oriented model. Cloud Native provides space for innovation and improves the probability of success. Entering the market can be gradual. Step by step, adding new features, scaling up, and optimizing regarding what has been observed so far. This model of innovation building does not require as much effort and capital as the traditional model.

External impulse often stands behind the adoption of Cloud Native, as we described in our previous article. However, the necessity and context of change encourage new ideas. It is worth mentioning that the following development and modification will be performed most effectively in the Cloud Native environment.

These currently dominate sources and innovation paths gain more power and value after the Cloud Native adoption.



Benefits structure


Known’s “Business Value of Cloud modernization” report gathers 22 cloud services performance indicators. They are grouped into four paths of state-of-the-art cloud model adoption: containerization, managed services in data and analytics areas, and serverless approach.

Completing all those paths during cloud transformation led to earnings gains in 43% of the companies. In the case of container adoption itself, 28% recorded revenue growth. On the other hand, 40% of the companies that adopted the serverless model noticed a decrease in IT spending. Moreover, 35% of companies using Managed Analytics have accelerated their reports and analysis performance. Up to 13% of the companies utilizing Managed Data react faster to security incidents.

According to Hackett Group, migration to AWS delivers measurable business benefits from resilience, agility, cost efficiency, and performance perspectives. For example, in the “Cloud Services Study” report, 43% of the surveyed companies declared that they deliver new applications and functionalities faster.

Using cloud computing combined with the Cloud Native model leads developers to reorient themselves into development instead of maintenance and bug fixing. As a result, the number of developers concentrated on innovation – new functionalities and new feature creation – raised from about 30% to 70%.

Reducing the delivery time of new application functionalities (by more than 60%) improves process effectiveness and enables faster service development. Both front-end and back-end processes, for example, HR processes, benefit from it. Productivity improvement among the development teams results from software delivery process automation. It combines effectiveness with speed. Standardization and automation of processes lead to improvement in security as well.

All mentioned benefits, crucial for the innovation process, are listed by our customers, and we can see them in projects we implement together.



How to start the transformation


Successful transformation to a cloud model is run following some standards, but it should also be oriented on the organization’s particular context. From the beginning, it should be subjugated to business value and innovation improvement.

Transformation to the cloud model starts with containerization. It allows building or retaining technological neutrality and avoiding the risk of vendor lock-in. Known’s report stresses that applications’ mobility between environments rises to 45% in such cases.

The next step is to choose the environment and tools for the CI/CD processes. Again, it requires know-how and customization to the organization’s needs and abilities. Unfortunately, many advanced and sophisticated settings remain idle because developers refuse to use them.

The Cloud Native approach offers specific methods and practices to be used during implementations and, later on, during the following operations. It’s a step-by-step approach towards application migration to microservices and container architecture according to the Transformation Factory concept. However, the fundamental point of reference should always be the 12 rules of application creation in the Cloud Native model (12th Factors App).

There are other crucial points of reference – the business resilience and recovery after a failure.

The change’s most critical assumption and criteria remain its business aim and nature. Technological forms and standards should thus be chosen and built with business value in mind.



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