A lot of the Cloud narratives in the engineering industry revolve around small to medium enterprises (SMEs). Those stories go something like this: by accessing ‘limitless’ processing power, data, software and systems via the cloud, SMEs can compete at the level of large enterprises. That’s because the smaller player can ‘borrow’ anything, via as-a-service models, to boost its computational, software, IT and hardware resources to match the powerful assets purchased by a big firm. With this agility—and the speed at which smaller companies work, anyway—it’s akin to giving David an F-22 Raptor to combat Goliath.
Though the success stories of various David-like enterprises fill our imaginations, the truth is that most don’t beat their Goliaths. In the case of the advantage Cloud offers SMEs, all those benefits are also applicable to the monoliths. The Cloud can and will benefit Goliath just as much as David—maybe more. Because not only can the Cloud make Goliath bigger, but it can also make him as fast and agile as David.
“Large enterprises will benefit from cloud-based solutions to break down silos within the company and become more agile to reduce time-to-market and increase effectiveness,” wrote Tosh Tambe, VP of Business Transformation and SaaS Strategy at Siemens Digital Industries Software, in a previous article on engineering.com.
So, let’s dig into how large organizations can better navigate 2023 by empowering the Cloud and as-a-service models to help them become as nimble as a startup.
The Cloud Gives Large Enterprises the Agility to Meet the Challenges of 2023
Consider the uncertainty behind 2023. Due to the remnants of the pandemic, changing public opinions and new governmental regulations, it’s a good chance that supply chain issues, workforce turnover and sustainability will be the top external complexities for most organizations—big and small. Meanwhile, the products and services that organizations offer continue to become more complex as consumers demand more customization, faster releases and quality.
In another article, Tambe wrote, “To succeed, companies of all sizes must be agile, flexible and nimble, so that they can turn complexity into their competitive advantage.” When you break it down, the large organizations get the same benefits SMEs get from the Cloud. But instead of using it to enable complex processes, computations and workflows, for large organizations the Cloud replaces the physical assets that do that work. With less capital spent on traditionally in-house hardware, software, security and IT services, those funds can go into development, the workforce or diversifying supply chains.
Tambe wrote that Cloud-based, “SaaS solutions enable companies to embrace digitalization, empowering them to get to market faster, turn complexity into their competitive advantage and thrive in an ever-changing marketplace.”
Speaking of the supply chain, organizations looking to upgrade their in-house hardware in 2023 should consider moving to the Cloud instead. Due to the supply chain issues plaguing the chip industry, shifting to the Cloud might be less risky than buying new equipment.
Additionally, large organizations can use the Cloud to become agile in other ways. This is because as-a-service models make technology accessible, scalable and flexible for distributed users. In other words, large organizations only pay for what their employees use, when and where they use it. This is clearly an improvement over physical assets, such as servers, sitting and draining power overnight.
This strategy can also improve the software experience. Why pay for 500 seats when only 250 employees actively use the software at any given time? For that matter, why pay a whole year for software that will only be used one month a year? With SaaS, you have it when you need it and only pay for it when you use it.
As-a-service options have other benefits, particularly when you look at the way office life is changing and becoming more sustainable. Because data is centralized and access is global, people can work wherever they want. In fact, many large organizations are starting to opt out of large office spaces, when applicable. They can further divest themselves of physical locations by shifting in-house systems online and enabling employees to work wherever they have an internet connection.
“The as-a-service model is the natural next step from a business world standpoint, as it provides digital threads as a service,” Tambe added. “The pandemic accelerated the reality of remote workers, especially in terms of evolving work/life balance and the perks that companies offer to their employees to both work more efficiently and as a recruiting tool to attract the best talent.”
This strategy doesn’t just make sense financially and from a worker retention/acquisition point of view—it is also more sustainable. Why spend money and environmental resources on an office when employees can access the digital thread—and work—from home? For that matter, why pay for the electrical bill to support the servers and air conditioning traditionally used in a big office when a Cloud service can do it for you?
One concern organizations have in moving away from the office format is the idea of the ‘watercooler effect.’ Those chance meetings between employees of different teams—where ideas fly—can’t happen if everyone is split across the world. But since many Cloud tools come with collaboration features that share data and information between people and teams, this argument is losing strength. Tambe wrote, “Subscribing to [SaaS] is really subscribing to two things: more connected technologies and the community, because that connectedness naturally creates the connective tissue between the users to form a community.”
He later described how if a team were to work on a CAD tool via cloud access, that team could not only synchronize files but also their collaboration. He wrote, while referencing a real-world example, that this can open “the capability for users to view, measure and mark up models within the 3D space using a browser-based interface. What once took them three weeks to design and develop, now took them just three days.” And these benefits aren’t just limited to one team. By giving every stakeholder access to the 3D space, departments from sales to manufacturing can share input early in development. In essence, the Cloud becomes a watercooler that everyone visits simultaneously.
Cloud Implementation Strategies for Large Organizations
The troubling thing about the benefits the Cloud can bring large organizations is the realization that, according to a Harris Poll commissioned by IBM, 69 percent of professionals working at companies with annual revenues over $500 million say that their organization lacks the skills to be proficient in architecting and managing cloud applications. The same survey explained that 73 percent of respondents believe that their organization lacks an advanced digital transformation journey.
With the narrative of the Cloud focusing on the benefits to SMEs, it isn’t shocking to see that many large organizations have a long way to go. To catch up, they must start cloud adoption discussions as soon as possible.
It is also common for large organizations to stall during their digital transformations and cloud adoption processes. That is because the number/sizes of processes, people, data and more, all being digitized and digitalized, are proportional to the size of the organization. The more that needs to be moved to the Cloud, the harder it will be to manage.
Perhaps, this explains why so many large organizations have opted for hybrid and/or multicloud approaches? In a hybrid cloud scenario, only a portion of the organization’s assets are moved to the cloud; the rest remains within on-premises systems. In a multicloud approach, multiple cloud systems are utilized to simplify the transfer. The reasoning behind these approaches is that some assets will work better completely in-house, and others have already been optimized to work with specific cloud options.
For example, industrial and farm equipment manufacturer Harsh International moved from an on-premises version of Solid Edge 3D CAD to Siemen’s Xcelerator-as-a-service (XaaS). Since both options are provided by the same vendor, it stands to reason that the transition would be simplified. Tambe wrote, “Leveraging Xcelerator-as-a-Service, Siemens’ SaaS offering, as the foundation of their digitalization strategy, companies like Harsh International are achieving their goals more quickly and efficiently.”
If another software used by Harsh International were optimized to work on a different cloud system than Xaas, it stands to reason that—for simplicity—both would be utilized. The statistics support this assumption; according to a 451 research report sponsored by Oracle, 76 percent of companies are adopting a multicloud approach. Meanwhile, recent reports from IBM state that the average company within their digital transformation journey uses six to eight different cloud systems at a time.
Hybrid and multicloud strategies are not a silver bullet. There are risks of higher costs to accommodate multiple vendor subscriptions and data management systems. Fortunately, there are multicloud tools available to manage these disparate systems. This is because cloud vendors like Google, Amazon and Microsoft have realized that the number of customers they share continues to grow. As a result, they have seen the need for cloud-vendor agnostic tools to manage multicloud data, security and other potential complications.
Since these multicloud management tools exist, it stands to reason that the best way for a large organization to start its digital transformation and cloud journey is to focus on the low-hanging fruit instead of the bigger picture. Find the tools already used throughout the organization that have Cloud alternatives from the same vendor. That vendor likely has optimized and secure methods to make the transition. Since much of the hard work is already done, that large organization can start quickly transferring its assets, one at a time, to the Cloud. Though this method will naturally move towards hybrid and multicloud, by the time that becomes a problem the tools to solve it will only be better.