By Jonathan Rothwell, CEO & Co-Founder D55
With consumer demand and governmental pressure ushering a sector-wide focus on sustainability; businesses operating amid a recession must aim to cut costs while meeting environmental objectives. Businesses are taking a head-on approach, aiming for carbon neutrality and net zero by 2050.
Eyeing these targets many businesses adopted new technologies without considering old hardware at the base of operations. It proves far more effective to first overhaul antiquated legacy storage systems and rebuild to meet the demands of today’s markets rather than layering new technology on top of old. With correct support and strategy, doing so presents various opportunities to save future costs and meet sustainability objectives.
Out with the old – Legacy storage systems vs cloud
The way we collect and use data has changed dramatically in recent years. Businesses reliant on legacy IT systems that are archaic in physical and technological capacities will experience a much tougher task when even contemplating how to achieve lower costs and emissions.
Legacy IT and storage systems are often on-premise, meaning the business itself takes responsibility for the working order, effectiveness and efficiency of the infrastructure. When these systems were built, they were rarely implemented to consider future optimisations as a business scales up, and capacity is therefore finite. Equally, green energy alternatives and energy usage optimisations were low on the list of priorities, or excluded altogether.
Legacy systems also harbour additional risks – working on premise means that if a localised power outage or hardware problem occurs the system will fault at that single point of failure. Units also take up considerable space, limiting operations by taking space from other obligatory operational elements, such as stock storage.
On the other hand, cloud-based systems are externally managed by a cloud provider. These systems take into account modern considerations for cost and sustainability optimisations and allow a business to worry about their services and products without much consideration of their storage capabilities. Cloud storage is also more robust and risk-free, with centres housed in various locations mitigating single-point-of-failure issues. Providers also take on improvements, maintenance or repairs in-house, removing the need for IT data specialists to directly serve the business.
While digital transformation extends beyond the cloud, moving systems, data and storage onto external, on-demand data centres provides a surefire method of modernising and optimising operational processes. An effective cloud strategy in place can lead to comprehensive future-proofing, allowing businesses to react quicker and more effectively to market changes.
Considering these differences, it is clear that a revamp of data-storage systems is imperative to meeting future goals. Businesses are already aware of this, with 60% of global organisations’ corporate data now being stored via the cloud. SMEs will soon follow; as 58% of SMEs are not currently taking advantage of the cloud. Indeed, the cloud computing sector has grown dramatically over the last decade, with forecasts predicting a similar outlook for the next ten years. The global cloud computing market size was valued at USD 405.65 billion in 2021. The market is projected to grow from USD 480.04 billion in 2022 to USD 1,712.44 billion by 2029, exhibiting a CAGR of 19.9% during the forecast period.
Successful cloud transformation does not happen overnight. On the contrary, it takes time, expertise and resource management to assemble a future-proof cloud data system strategy.
PwC’s Cloud Business Survey found that more than half (53%) of companies have yet to realize substantial value from their cloud investments while additional research details that 16% of SMEs believe that they cannot afford to abandon legacy systems. However, businesses understand the dynamics at play here, with 56% saying that have migrated viewing the cloud as a platform for innovation and growth. They understand the cloud is not a quick fix, but a long-term strategy built with longevity in mind.
Cost-cutting in the cloud
First, cloud providers like AWS ensure that businesses are only paying for the amount of storage and compute power they are consuming. As opposed to a fixed cost with on-premise legacy systems, cloud pricings scale to reflect business needs. Essentially, this helps reduce vital costs when businesses may be experiencing a downfall in usage whilst ensuring they are prepared for sudden spikes in data requirements.
Second, all hardware maintenance, repairs and improvements are handled by the cloud provider. This dynamic improves business resilience and predictability, negating the need to monitor, repair or improve storage systems in-house. Hardware issues do not affect provider prices and data centres networks form from various locations, removing a single point of failure risk. In simple terms, if a cloud provider’s system breaks down, your business will not be affected.
Businesses transitioning to the cloud can also free up space in offices or warehouses that would have been used to store bulky hardware. For SMEs, the effect this can have on operational scale-up and growth can be significant, particularly considering the heightened cost of renting physical spaces and the ever-growing move toward digital.
Due to its limitless nature, the cloud excels in facilitating the unification of various data streams. The ability to do so improves speed-to-market by working across platforms far more holistically than siloed legacy systems. When you install a cloud-based infrastructure, you are gaining operational agility as well as cost-cutting potential, affecting far more than your data usage figures.
As legacy systems grow larger, energy consumption snowballs. On the other hand, cloud data centres are a relatively new build and have been made directly with reduced reliance on non-regenerative fuel sources and energy-efficient processing in mind.
Cloud providers like AWS adhere to government-based guidelines and objectives for a greener future too. For example, AWS will operate 100% of its cloud banks with renewable energy by as soon as 2025. Businesses can access these green credentials to support their sustainability journey, by leaving environmental concerns to the provider, businesses can put resources into energy saving elsewhere in the organisation.
Equally, by having serverless computing baked into a cloud strategy, businesses can further utilise energy scaling for increased energy efficiency benefits, as server costs are based entirely on required and actual usage.
Cloud’s ability to scale usage does not just benefit cost-cutting, it also works to operate on the minimum energy required. Legacy systems cannot do this, and access maximum storage requirements day-in day-out, leaking energy and cost waste year-round.
Cloud storage centres have also been built with future optimisations in mind, meaning the systems themselves are reactive to the constant evolution of green energy use, greener IT implementations, and sustainability-focused best practices for data management. Ultimately, as technology becomes greener so will your data processes.
Cloud for the future
The pressure is on for businesses to save costs, enforce greener practices and future-proof against the next tidal of technological innovations and customer demands. Migrating to cloud data centers garners significant opportunities to meet cost-cutting and sustainability goals, particularly if serverless applications can be achieved. Despite implementation costs and employee learning curves, leveraging cloud technology is an imperative first step. The cloud is the foundation for greener and more cost-efficient operations; businesses should migrate now to avoid falling behind in the very near future.
Global Banking & Finance Review
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