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May 17, 2021
Cloud migration is a much-discussed term, especially in recent times. Gone are those days when considerable CAPEX had to be apportioned for having an on-premise infrastructure in place to store data and software on-site. A bigger picture would mean the business hosts its own data center on-site. At the outset, running applications on-site would require companies to buy and maintain in-house servers and infrastructure. Notwithstanding the physical space that is required, having an on-premise solution would also demand a dedicated IT staff qualified to maintain and monitor servers and their security 24X7.
Let us begin with a stellar case study to bring home the point.
Back in the year 1999, Blockbuster had an opportunity to buy a fledgling Netflix which was also severely affected by the dot-com burst at a mere $ 50 million. A hapless Netflix was convinced that it could be a lifeline during those troubled times and was ready to be acquired, only to be later laughed off by the erstwhile entertainment giant.
What seemed like a joke to the Blockbuster CEO at that time proved to be a cringe-worthy blunder for all times to come. Unbeknownst to the DVD rental mammoth, Netflix quietly stole its thunder in the next few years to become the largest video streaming services provider in the world.
As of today, Netflix’s revenue stands at $ 15.8 billion with a subscriber base of more than 150 million. On the other hand, Blockbuster has a single franchise store that remains open in Bend (Oregon), positioning itself as a nostalgic reminder to those who wish to revisit the bygone days when they have to remind themselves to rewind that VHS tape and return it in time to avoid a late fee.
Netflix is a technology company. It was one of the first companies to visualize the potential of media streaming technology. It began its transition from a humble DVD-by-mail service to a subscription video-on-demand model in 2007.
So, what makes Netflix a poster boy for cloud migration? Only a year after introducing the concept of online streaming of its huge video archives, Netflix management realized they had a huge problem. Their backend could not cope with the increasing subscriber base and they kept having issues with connections and threads. At that time Netflix had already inked a deal with Microsoft to feature its app on the Xbox 360 and agreed to service the customers of the manufacturers of Blu-ray players and TV set-top boxes.
At a time when people barely knew of the existence of the cloud, the top brass at Netflix decided to migrate entirely to the cloud. While there were not many options in the market at that time, Netflix chose AWS over other public cloud suppliers owing to its breadth of features, the scalability it provided, as well as the broad spectrum of APIs that were included in its offering.
This proved to be a prophetic decision because, between December 2007 and December 2015, there was a 1000X increase in the number of hours of content streamed on Netflix, and there was an eight-fold increase in the number of people who signed up for the service at the end of its cloud migration process than they did at the start.
The Netflix of today, which is a television and movie studio that rivals some of the biggest names in Hollywood, would never have existed if they had not thought about migrating to the cloud. Just by migrating to the cloud, not only did they manage to eliminate database corruption but also grew their revenue from 1.36 billion to around 15.8 billion in just ten years. Their subscriber base also grew from 22 million in 2011 to nearly 150 million in 2019.
Cloud infrastructure was able to stretch to meet this expanding demand. This also proved to be a major cost-saving initiative.
For the uninitiated, cloud migration is the process of transferring critical services from on-premises or co-located hardware to the cloud. You would have surely interacted with the cloud when you have used Zoom for an official meeting, or Google Drive to save and share content or simply Gmail, or Office 365 when you wanted to send an email.
Amazon Web Services, Google Cloud Platform, Microsoft Azure are some of the renowned cloud service providers. By signing up with cloud service providers, companies can manage their entire IT infrastructure remotely without the security risk, inconvenience, and costs incurred in maintaining on-premise hardware.
Irrespective of the size of the company and the quantum of the work they do, cloud computing has become a business imperative as it provides cost benefits, agility, and reliable IT resources. Instead of bothering about the maintenance of their own private data centers storing information, companies can depend upon the scalability of cloud storage to build out storage as and when it is required thereby increasing their adaptability and reducing the total cost of ownership.
We gave the example of Netflix at the beginning of the blog because regardless of the industry a company belongs to, it is always beneficial to understand the technological trends in the market, the best practices being followed across industries, and subsequently use the learnings to gain a competitive advantage. Cloud computing has already helped power thousands of companies both large and small across the globe.
Here are some benefits that comes with cloud migration.
This feature is the most cited by cloud and cloud service providers. Elastic scalability is a term coined to represent the ability to automatically increase or decrease computing or networking resources based on fluctuating application traffic patterns.
Due to this feature, companies that use cloud infrastructure can cater to drastic changes in workload due to sudden spikes in user activity. For instance, streaming service providers or e-commerce marketplaces can come across spikes in subscriber base when launching a new series or introducing a seasonal sale, respectively.
Here is an example to explain this better. Black Friday sales are very popular with retailers as it helps them clear their inventory and balance books for the year. At the same time, they are also very taxing on the physical and digital infrastructure. While increased sales are a welcome thing and online sales have gradually increased year after year, the increasing traffic stresses test websites and can cause downtimes which could eventually result in a loss in sales. There is also the issue of bot traffic which makes up for half the traffic on Black Friday and Cyber Monday and has the potential to degrade website performance on these two important days.
It would not have been easy if they were operating in a data center environment. But because they are on cloud infrastructure that can scale quickly as well as carry out appropriate load balancing, they will be able to handle the spike in workload requirements without compromising on the consistency of their performance.
By virtue of the intrinsic auto-scaling policies which are defined and triggered based on environment resource usage (such as CPU, memory usage, or network traffic) or time-based settings, cloud providers help retailers manage the extra workload by spinning up additional instances and scaling up when these thresholds are exceeded.
Many organizations are undergoing digital transformation to create incremental value out of their existing business and assets.
Enterprises want to provide a highly engaging customer experience to their end customers using systems like AI-based chatbot, AI/ML-based customer analytics, and many more. Building such services from scratch could be a humongous task for an enterprise and would require a huge capital investment in terms of research skills and time.
Cloud Providers provide several such innovative products and services via their Platform as a Service (PaaS) offering which could be used directly by an enterprise to speed up their digital transformation.
To meet the ever-evolving business needs, organizations must invest both time and money in scaling up their IT infrastructure. Trying to achieve this in-house has proven to be both time and money-consuming along with sub-optimal utilization of resources.
Cloud technology has emerged as an alternative technology solution that helps address this problem by increasing the computing power to carry out millions of instructions per second. The high availability of cloud services ensures that a line of business applications or services has the maximum potential uptime, thereby maintaining customer confidence and preventing any additional expenditure or revenue loss.
In a high availability solution, the data is distributed across multiple servers. Hence when one server becomes unavailable, the data can still be read from the other servers.
One of the major contributors to high availability on the cloud is the embedded redundancy feature. While system downtime cannot be totally ruled out, its effect is considerably minimized by moving to the cloud, wherein single points of failure can be eliminated so that if one element, such as a server, goes down the service is still available. This readiness is achieved by having redundancy across 4 levels:
Not being able to respond to the changing market landscape puts a business at a grave competitive disadvantage. By migrating to the cloud, companies can engage in the deployment of new business infrastructure and solutions at an unprecedented pace.
Cloud computing can be deployed in a matter of a few hours rather than weeks. As businesses put a lot of importance on achieving faster deployment and swifter Go-To-Market and eventually better ROI, it is becoming a common phenomenon nowadays to align a DevOps move along with the cloud migration endeavor.
It is also a lot easier to test and deploy new business apps via the cloud by utilizing its dev/test cloud environment without crashing the production environment.
The use of containers also allows development teams to move fast and deploy software efficiently. Containerization helps in decoupling applications from the environment in which they run, thereby separating the concerns of the developers and IT operations team further enhancing their efficiency.
For instance, starting from Gmail to Youtube to Google search, everything at Google runs in containers. It is also known as the Google way.
What had once been the most discussed disadvantage of cloud computing in several forums has now turned into its biggest strength. Cloud service providers relentlessly work on making a cloud-first journey secure by design to deliver better business outcomes.
As data breaches were frequent a decade ago, it was a common practice to store mission-critical data/user data in the IT infrastructure on-premise. However, now most IT leaders have started believing that the cloud is as secure or even more secure than on-premises infrastructure.
As quoted in an Information Age article, “Almost all of the massive data breaches we’ve seen of late were within traditional on-premise IT.”
By moving their IT infrastructure to the cloud, businesses can leverage the data security investments that their cloud provider has made. This enables the business to remove the need for large, up-front capital expenditures on hardware and security measures. To provide a robust offering to their customers, cloud providers integrate strong multi-layered security for their IT Infrastructure thereby providing a secure environment in the cloud. This would be a significant cost for a company that is not in the business of creating IT infrastructure as part of its core business.
Before the COVID19 pandemic drove people to work from home, research from Gartner in 2019 predicted a massive boom for collaborative tools and team collaboration software – from around $2.7 billion (£2.028 billion) in 2018 to an estimated $4.8 billion by 2023 (£3.6 billion).
With the onset and rapid spread of the pandemic across the world, today most organizations irrespective of whether it is an SME or an enterprise have a certain level of experience with team collaboration tools in one way or the other.
Transitioning to a cloud environment provides greater flexibility to employees as all the documents kept in a central, cloud-accessible location. Due to this, employees can work on a document without having to send an updated version. Regardless of their physical location, employees have access to the latest version of the document as all changes and updates appear in real-time while working in a cloud environment.
With cloud collaboration, all team members get an equal opportunity to provide input and hence improves productivity thereby leading to high levels of participation.
Several organizations across the globe vouch for reduced operational costs and substantial improvement in IT processes achieved by migrating to the cloud. The same was the case with Netflix.
Yet another advantage of migrating to the cloud is the pay-for-what-you-use feature, thereby eliminating the need to maintain costly data centers especially when business-critical information is hosted in the cloud.
According to a survey conducted by Microsoft Office 365, 82% of SMBs report reduced costs as a result of adopting cloud technology, and 70% are reinvesting the saved money back into their business. A survey by Datometry that solicited responses from 166 IT Leaders showed 61% of companies move their computing to the cloud to cut costs.
There are multiple benefits of moving to the cloud, both to your business and your customers. If your business needs improved scalability, enhanced security, reduced total cost of ownership (TCO), seamless software integrations, and greater access to business-critical functionality, you should consider getting in touch with a cloud migration company to help you execute a smooth transition to the cloud.
With HSC’s expertise and experience in the business, we can provide the required cloud migration services suitable to your business requirements. Our cloud migration service offerings include lift and shift cloud migration services, cloud re-engineering services, cloud-native application development services, and legacy modernization services.
HSC has also partnered with all the major cloud providers such as AWS, Google Cloud Platform, and Microsoft Azure and can help you in your cloud migration journey. Connect with us for more information about our offerings.
