Two of the world’s most traditional industries have ascended to the cloud.
To meet new demands from an increasingly tech-centric world, manufacturing and financial services are harnessing digital to transform how they do business. These longstanding industries are often perceived as less flashy in comparison with some of their more technology-forward counterparts, like media and entertainment or life sciences, but the reality is that they’ve found creative, compelling ways to adopt cloud computing for business advantage.
Any company in manufacturing or financial services must fight to stay relevant. They occupy huge global markets and face steep competition from both legacy players as well as up-and-comers. It was therefore incumbent on both industries to rethink their business models – or risk being left behind. Cloud-based solutions help alleviate the challenges that come with large-scale digital transformation – the cloud helps avoid redundancy in a demanding world full of digitally-savvy consumers who expect far more efficient, customer-centric services, together with an influx of new, more technologically advanced competitors.
No wonder, then, that both industries have put more money behind the cloud. Our analysis of more than a billion dollars of cloud spend between 2018 – 2019, showed that financial services and manufacturing overall cloud spend grew significantly faster than the majority of their peers.
Since making the shift, manufacturing and financial services companies have found that the cloud offers a world of benefits and strategies to meet the demands of a global, technology-driven market. The challenge, however, is keeping the cloud tightly managed without stifling innovation: unchecked spend, security risks, and lack of visibility can derail an otherwise successful cloud program. Here are two prime examples:
- Cox Automotive relies on the public cloud to take advantage of economies of scale. It enables them to be agile and test new ideas with limited investment. By consolidating data centres and leveraging AWS they are able to focus on products, services, and clients
- Intuit, a financial software powerhouse, doesn’t let cloud complexity get in the way of its mission to power prosperity throughout the world. The company automates and optimises its cloud spend, avoiding manual processes that can be labor intensive and error prone
Both companies have found creative ways to drive accountability and avoid cost spikes through careful management of their cloud environment. As a result, they are achieving the objectives that bring so many people to the cloud in the first place – namely, agility, innovation and competitive advantage.
The adoption of cloud technology has enabled manufacturing and financial services to keep up with the ‘anywhere, anytime’ need to access and provide differentiation at a usage and consumption level. Specifically, there are three key areas in the public cloud that these industries are adopting at a faster rate – containers, machine learning, and serverless. Each of these provide a unique ability to improve the top or bottom line. For instance, containers can reduce overhead costs (they enable developers to move more quickly and require less system resources than traditional environments) while offering increased flexibility.
Containers run virtually anywhere; from the branch, to the data centre to the public cloud, across virtual machines or bare metal; they allow companies to move fast, deploy software efficiently, and operate at an unprecedented scale. This application’s agility and ability to improve application delivery, helps reduce costs, making it a strategic, long-term investment. Indeed, when we analysed the data collected for the last financial year, we found that both industries increased their spend in containers by a sizable 37%.
Cloud technology also unlocks access to advanced analysis and deeper insight into data (e.g. consumer and supplier engagement), which has enabled both industries to establish more cost-effective solutions and innovative strategies moving forward. Financial services companies increased their spend on analytics by nearly 2x – with top use cases like faster reporting and deeper analytics and insights.
The most popular cloud services are data warehousing, search, and big data analytics. Big data analytics is widely deployed by manufacturing companies who are looking to gain new insights from the vast amounts of information their machines collect. Consuming these offerings as managed services from a cloud provider means less overhead and maintenance for the organisation, as they are no longer responsible for the application operations.
The agile nature of the cloud also allows for quick responses to changing markets and developments, in a way that can accelerate a company’s business strategy. This helps to ease operations so that they function more efficiently. Manufacturing companies are able to remain fast and responsive to customer demands, which has resulted in shorter product cycles and less time to market, without sacrificing quality. Interestingly, the shift by financial services to the cloud was also spurred by the desire for greater sustainability, largely driven by stockholders and employees, so adopting cloud technology was a natural progression.
Perhaps the most fundamental way the cloud has transformed these industries is through serverless technology. According to our study, there’s been more than a 3x increase in serverless spend by both manufacturing and financial services over the past year. The latter in particular has seen immense value. Why? Scale. One the largest benefits serverless technology can offer companies is the ability to map high scalability- it is highly responsive and provides strong differentiation. For financial services like insurance and banking, it’s useful for predicting consumption and usership outcomes with a high level of accuracy.
Serverless technology is also extremely nimble: it has the ability to create applications for quick dissemination to the public, supporting radical change and real-time innovation. For financial services, where the level of differentiation between products is often small, this delivers a competitive advantage to born-in-the-cloud fintech companies, digital challenger banks and non-bank payment providers and pay services from technology giants such as Google, Apple and Amazon.
For manufacturing organisations, serverless is an ideal technology to power edge computing and IoT. Now, even when remote sites don’t have consistent network connections or robust infrastructure, serverless functions can trigger basic actions like record information, turn on a code, or message a user.
Cloud computing is transforming virtually every facet of every industry. It is clear that cloud adoption is no longer simply a technology decision for companies – it’s a business strategy that can give them agility, speed, and insight. It’s the way to do business in the modern age.
Interested in hearing industry leaders discuss subjects like this and sharing their experiences and use-cases? Attend the Cyber Security & Cloud Expo World Series with upcoming events in Silicon Valley, London and Amsterdam to learn more.
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