Cloud Adoption and Maturity

Artificial intelligence (AI) is growing rapidly as well as gaining more attention, often supported by early adopters such as start-ups and small companies, realizing that this highly overused term will help them gain a competitive advantage and generating profit (which they do). Working as a consultant, I have witnessed how small companies exponentially increased value by incorporating AI in their solution and magnifying the visibility that they did in fact use AI. Leading the AI development for the company Boneprox, I was able to experience this first hand.

Consequently, cloud adoption in Norway is increasing, where AI often operates as the initial factor. But a lack of cloud expertise and the complexity in migrating legacy applications are still holding the adoption back in some areas.

Looking at the most important business driver for cloud adoption we have reduced time-to-market with new digital solutions. According to a survey done on cloud maturity by EY, cost savings are, in 2019, less important for the businesses compared to last year, leading to the assumption that being able to release new digital services more rapidly with the support of a scalable cloud platform seems to be higher prioritized that saving in terms of cost. Even though businesses have shifted the focus from cost savings over to service scalability, does not mean that businesses have not become more cost-efficient.

Cloud Maturity

In recent years, we notice a larger number of businesses taking advantage of the services provided by companies such as Amazon, Google Cloud, and Microsoft Azure, which are considered to be the top providers. As we already know and might have felt, is that technology progresses rapidly where new features and services constantly are being launched. Cloud maturity is in its essence a transformation where complex on-premise IT infrastructures move to the cloud where this, in turn, enables businesses to more accessible options as they scale up.

Cloud maturity of organizations operating in Norway, the Nordics, and «Europe plus globally» has been measured in the EY survey and the findings show that they are at a similar level. However, organizations with a Norwegian footprint have lower average cloud maturity than the ones with a Nordic and European or global footprint. The lower average is a direct impact from other sectors in Norway that has not been subjected to the advantages related to the technological advances by adopting cloud services. In the below table, nine different sectors have been measured in terms of cloud maturability on a scale of one to five, where higher scoring represents a higher level of cloud maturity. We notice that the government and the public sector rank lowest, meaning other sectors have already moved towards the cloud and other sectors are more likely to have businesses consider the advantages of moving to the cloud. The reason for this is that adaptation of cloud services within the government and public sector meets many regulations, requirements, and guidelines especially with regard to data, as well as where and when data is stored and processed. The government has strict concerns about the security of cloud services and whether current regulations, as the standard contracts issued by the service providers, permit their use. In addition, the components that make cloud services cost-effective and scalable in the first place are simultaneously creating challenges for enterprises administrating confidential information, personal data or information in areas where regulatory restrictions apply as to which countries data can be transferred.

Sector	Scale (1 – 5)
Government and public sector	2.1
Financial services and insurance	2.2
Consumer products and retail	2.2
Oil and gas	2.3
Industrial products	2.3
Health and life sciences	2.7
Construction	2.7
Transportations and logistics	2.8
Power and utilities	3.1

We notice that the government and the public sector rank lowest, meaning other sectors have already moved towards the cloud and other sectors are more likely to have businesses consider the advantages of moving to the cloud. The reason for this is that adaptation of cloud services within the government and public sector meets many regulations, requirements, and guidelines especially with regard to data, as well as where and when data is stored and processed. The government has strict concerns about the security of cloud services and whether current regulations, as the standard contracts issued by the service providers, permit their use. In addition, the components that make cloud services cost-effective and scalable in the first place are simultaneously creating challenges for enterprises administrating confidential information, personal data or information in areas where regulatory restrictions apply as to which countries data can be transferred.

Benefits and Challenges

In Norway, Moss municipality, the population is about 32,000 with approximately 2,500 employees and administrates around 100 IT systems with the use of 8.2 full-time equivalents on Information and Communication Technologies (ICT). To provide all its employees with e-mail accounts, the municipality had to achieve numerous e-mail licenses. However, the municipality discovered a much more cost-effective option which was the use of Office 365 and further concluded that moving parts of the solution to the cloud would cost less than installing equivalent software locally. It decided for a hybrid solution where desktop application is operated in Microsoft Azure’s public cloud service and the system portfolio, including archives, are operated locally. It also concluded that the continued operation of the on-premise solution would in the future prove far more expensive in addition to the local installation costs.

Cost-effectiveness is one of the most common benefits accompanying cloud maturity, where it has been a key factor of motivation in many countries. In 2013, the UK implemented a cloud-first policy, which issues the organizations within the public sectors to fully evaluate and consider potential cloud solutions and services before considering any other option. The initiative allows development and technological advances within the country as well as creating the need for expertise within a field considered to grow in the future. As the demand increases, the effect ripples through the educational system which potentially establishes educational programs. However, with the number of services each cloud provider has and the number of cloud providers available, I must say, I don’t envy the person responsible for evaluating these alternatives and narrowing down to a decision on which to proceed with.

Switching focus over to scalability, cloud services offer practically unlimited capacity for data processing and storage. The cloud resources are allocated to customer organizations only when needed, this means that enterprises need not worry about running out of capacity, as they can be configured to scale up. This is advantageous for enterprises with services that are vulnerable to overload during peak periods, often without being able to foresee their occurrence. But the geographical data storage location pose potential challenges as mentioned above.

Flexibility

In many cases, cloud computing makes it easier to gain access to the system from different client types such as PC, tablet or mobile phone. Nowadays, almost every individual possesses a phone, and due to their accessibility both public and private companies are increasingly allowing their employees to use their own phones to access information within their systems. This policy is often referred to as Bring Your Own Device (BYOD), but also brings new security and accessibility challenges. Even though cloud services can make it more convenient for users to store their work in the corporate storage area in the cloud rather than locally on their personal equipment but outside the control of the enterprise. Most businesses have employees who already use unauthorized cloud services for consumers to give them flexibility in their work lives. This poses a risk to businesses, not least because license agreements for end-users in the consumer market often give service providers broad authority over what they have to do with customer data. As businesses gradually acquire more services in the cloud, this will affect the need for local expertise. This can lead to reduced competence in some areas because employees no longer work in these areas on a daily basis. On the other hand, it can save key personnel from having to perform routine tasks and allow companies to spend more energy internally on strategic planning and service development.

«Telenor will hijack 130 million customers in all channels and on all platforms, with Comoyo in the front»

In 2011, Telenor ventured into the realm of streaming services and established the service named Comoyo. In May 2013, Telenor’s announcement sounded: “Telenor will hijack 130 million customers in all channels and on all platforms, with Comoyo in the front”. In November the same year, Telenor terminated their innovation attempt after the major international streaming services Netflix and HBO captured most of the market and was well established.

During Telenor’s business expansion they used an Amazon infrastructure to provide the streaming service and only paid for required resources to serve the users at any given time. As a result, as they discontinued the service, Telenor had not invested largely in an infrastructure the company no longer needed.

The story exemplifies flexibility and how the cloud has the potential to effectively launch innovational initiatives and at the same time minimizing risk. As the cloud market progresses and new services increasingly becomes available, in some cases, only in the cloud, those governments and public sector businesses that refuse to embrace the power of the cloud may see their capabilities marginalized going forward. Below, I have added a video of a tenthgrader, deeply interested in AI, discussing how moving to the cloud eliminates challenges with emphasys on the provided AI services.

In a future post, I might dive deeper into strategies busninesses take and which model principle they follow when transforming to the cloud.

Thanks for the read and stay tuned.

About the writer:

Pedram is currently working as an expert Machine Learning Engineer with emphasis on developing object recognition systems which in addition to his background in Artificial Intelligence is an attained experience gained during his several endeavors within a professional domain. Furthermore, he has been involved in diverse fields of Information Technology such as Front-End and API development or Machine Learning applications.

Pedram has a background in Nanoelectronics and Robotics with specialization in Signal processing and wrote his Master thesis research within image classification of medical imagery. He developed an assistive real-time classification system for doctors performing endoscopy on patients, which was the leeway into the exciting domain of Artificial Intelligence.

Pedram has a long term interest in the area of application of machine learning and AI. His main interests are in topics such as Computer Vision, Natural Language Processing and DataOps. And how the combination of the topics and how explaining, utilizing, producing solutions and understanding new challenges and situations where AI & ML is at the center, can create value.