The role of Cloud technology in digital transformation
Undoubtedly, we are living in times of sudden and exponential changes, where the pandemic has only accelerated the pace and depth of the trends, which were already being perceived. The behavior and habits of consumers have been moving from the physical to the virtual world, the way companies compete is based on information and user experience, the relationship between the citizen and the administrations must be more agile and convenient, everything is changing significantly in a short time. The result of all this reinforces the need and urgency of digital transformation that implies both change and innovation in the ways of doing things and in technology.
Today we are going to focus on the role of Cloud technology and its strategic importance in any digital transformation process.
If we go back some 25 years, we can see that the internet – initially and in a simple and restricted way as a set of technologies that allowed networks to communicate with each other, enabling access and exchange of information – radically changed the business and social scenario. The Internet democratized access to information and the market, regardless of the size of the organization, and destroyed entry barriers allowing small companies to compete globally that had not invested in physical assets on the same scale as large ones. It created new business models and destroyed others.
Cloud is no different, we are facing a change of similar but greater proportions. Cloud is not simply a set of technologies that allow us to consume computing or storage on a pay-per-use basis. Cloud is democratizing access to innovation for any organization regardless of its size. Today, large companies, with large investments in information technologies, with which they differentiated themselves from small ones, have seen how these assets have been transformed from an advantage into technological debt.
Cloud allows any organization, country or group to compete, on equal terms and with the best available innovation, regardless of its size. Most of the projects of artificial intelligence, advanced analytics or other cutting-edge technologies are executed in public clouds that allow ease of use, the best available technology and its evolution at no cost to the user. The levels of investment in innovation by Cloud providers are much higher than what any customer can do on their own. The differentiation and innovation of the companies that make use of the Cloud is thus focused, not on the construction of platforms, but on the additional innovation built from said platforms already created by the provider.
The EU is well aware of the external dependencies that this growing trend raises. Currently the Cloud market (excluding Software as a Service – SaaS) is an oligopoly of four global players, none from the European Union, most of them American and one Chinese. There are differences between them and it must be analyzed how open their technology is, the exit barriers, the sovereignty over the data and the ease of working through them in a multi-vendor way.
Faced with this situation, several countries, such as Poland or Monaco, are betting on the creation of national clouds based on third-party technology, mainly Google and AWS respectively. Additionally, the European Union is promoting solutions around the integration and exchange of data between providers, which allows creating a federation between local Cloud service providers, with the necessary confidentiality and digital security.
Defining what to do is critical, but how to do it as well. Establishing an appropriate strategy for the country, taking into account the opportunities and limitations, while observing what other countries have done, will be critical in a differentiation strategy.
Cloud can help with execution. The opportunity for all countries lies in how it consumes these innovative services while building, in turn, «above» solutions – from existing cloud platforms – related to secure access to information and use cases that promote the digital transformation of the country. But certain requirements will have to be established. It will be key to carefully choose the ecosystem of alliances that allows to innovate and digitally transform society and companies, in order to be able to compete in a world and in global technologies. Having a local tech champion is critical to being successful on this journey.
