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How to lower costs and improve innovation with cloud computing

There is no one way to recover. The past year has seen unprecedented challenges for business across the world, with social distancing and quarantine measures forcing many organizations to quickly adapt to remote working. A new report from BCG Platinion, titled “Finding a New Normal in the Cloud”, points out that while companies have done well to survive so far, the overall business environment is still a tough one with contracted economies and lowered revenues. CIOs have to find the right balance between technological innovation and lowering their cash burn rate. 

The report identifies five key ways in which companies can use cloud computing to optimize their operations and reduce overall IT costs by as much as 10%. 

1. Go beyond VPN

The BCG Platinion report states that companies need “rapid, efficient, highly scalable, and device agnostic solutions”. Traditionally, when employees had to work offsite, companies provided them with VPNs. But the sheer scale of the COVID-19 pandemic has shown these solutions to be expensive, slow, inconvenient, and hard to manage when entire workforces are working remotely.

Instead, BCG Platinion emphasizes the need for cloud-based solutions such as BeyondCorp Enterprise for more secure, more effective, lower cost remote access at scale. BeyondCorp Enterprise offers customers a zero trust platform for simple and secure access with continuous end-to-end protection that can be used on any device at any time. Deliveroo, a global food delivery company headquartered in the UK, uses BeyondCorp Enterprise to bring the zero trust model to its distributed workforce. 

“Having secure access to applications and associated data is critical for our business,” says Vaughn Washington, VP of Engineering at Deliveroo. “With BeyondCorp Enterprise, we manage security at the app level, which removes the need for traditional VPNs and associated risks.”1

With a low cost cloud subscription model, BeyondCorp Enterprise eliminates the need for hardware, operating, and maintenance costs that come with VPN solutions and can also enable organizations to offer protection to the extended workforce at a fraction of the cost. BCG Platinion estimates that solutions like BeyondCorp Enterprise can save companies as much as 50% versus the cost of a traditional VPN. 

2. Use SaaS to keep productivity up 

With so much of the workforce fragmented due to social distancing measures, the need for seamless, efficient collaboration is greater than ever. According to BCG Platinion, a fully functional Software-as-a-Service productivity solution such as Google Workspace helps to “alleviate the traditional costs and burdens around availability, backup, and maintenance of on-premise collaboration infrastructure.” BCG Platinion analysts estimate that adopting a SaaS solution can lower computing costs for end users by up to 35%. 

But working in the cloud does more than lower costs. The BCG Platinion report cites a 2020 study from Forrester that found adopting Google Workspace boosted revenue growth by 1.5%, reduced the need for on-demand tech support by 20%, and cut the risk of data breaches by more than 95%. Over the last year, companies of all sizes have looked on the conditions of the pandemic as an opportunity to change the way they work. 

“Airbus has spent the past year thinking about what it actually means to return to work and we’re looking to support greater flexibility with Google Workspace in a leading role,” says Andrew Plunkett, Airbus Vice President Digital Workplace. “In 2020, we held 5.6M Google Meet sessions and we now have more than 70,000 shared Drives where people collaborate. Google Workspace has changed the way people work at Airbus and that will continue as the solution empowers the hybrid work reality.”2

3. Reduce IT overhead and management costs with cloud-first devices

Working in the cloud can be made even more effective with devices specifically designed for the cloud, says the BCG Platinion report. “Cloud-native devices such as Google’s Chromebooks and Chromeboxes are cost-effective, easy to deploy, simple to use, and highly secure,” says BCG Platinion. Additionally, with “thin client” devices, companies can save on hardware costs compared with traditional laptops and desktops.The report suggests that a thin client approach can produce savings of up to 25% in end-user technology and support. 

Organizations and businesses of all sizes have found that Chrome OS and devices have greatly enhanced their capacity to work together in even the most challenging circumstances. Chrome OS provides employees with a modern experience and devices that stay fast, have built-in security, deploy quickly, and reduce the total cost of ownership. “Chromebooks are simple-to-use and cost-effective devices that do everything that our staff need them to do, which is mainly accessing Google Workspace online,” says Henry Lewis, Head of Platform for the London Borough of Hackney. “As soon as the Grab and Go Chromebooks were available, they were well used every day.”3

4. Lift and shift for easier transitions

While migrating to the cloud is a priority for many organizations to succeed, it does not have to happen all at once and in the same way. A total cloud migration can be a huge undertaking, involving redesigns of architecture and refactoring of applications. For many organizations, this process can take several months, even years. 

But in times like these, CIOs need to make decisions quickly and reduce cash burn as much as possible. When resources are stretched and time is tight, BCG Platinion recommends a “lift-and-shift” approach for minimal disruption. With Google Compute Engine, for example, organizations can simply rehost their existing workloads on virtual machines without transformation. BCG Platinion reports that moving non-critical workloads to the cloud with lift-and-shift approaches can reduce IT spend by as much as 4% in just three months. Additionally, a quick, effective migration paves the way for more advanced IT infrastructure changes, creating effects that ripple long into the future. 

5. Make data work for you with the cloud

Data is central to any industry and making the most out of it is more important now than ever before. With business as usual upended by the pandemic, organizations have turned to data for urgent tasks like demand forecasting or predicting supply-chain disruptions. A McKinsey report from last year points out that while many organisations had already started to engage with analytics and AI technologies, their progress was dramatically accelerated by the urgency of the pandemic: “Analytics capabilities that once might have taken these organizations months or years to build came to life in a matter of weeks.”

With the right setup a company can use data to drive efficiencies, respond quickly to its customers and open new markets. But big wins require huge amounts of information and powerful analytics, which means that effective data handling can be very difficult and expensive to do with on-premises architecture. 

Moving to a cloud-based infrastructure minimizes infrastructure costs while opening up cutting edge techniques like machine learning for greater insight. The BCG Platinion report found that using a cloud-based data platform was not only cheaper and more efficient for businesses, but could result in a 70% increase in “effectiveness” which it defined as increased sales, lower costs of procured goods, and reduced inventory holding costs. “Moving to cloud provides competitive advantage as you scale innovation, accelerating the creation of new services to keep ahead of the competition,” explains Norbert Faure, Managing Director, Platinion Western Europe at Boston Consulting Group (BCG).

The key mission of any data platform is to make sure that the right people have access to the right information at the right time. Google Cloud helps to unify data across the entire business, increase agility, and innovate faster with a range of products. BigQuery runs complex analytics at infinite scale while helping organizations save up to 34% on the total cost of ownership compared with alternative cloud-based data warehouse solutions.4 Cloud Spanner provides a fully managed relational database that operates at 99.999% availability. Meanwhile, with Vertex AI, businesses can access the same groundbreaking machine learning tools that Google uses itself for unprecedented insight on a unified AI platform. “The whole Google Cloud suite of products accelerates the process of getting established and up and running, so we can perform the ‘bread-and-butter’ work of data science,” says David Herberich, VP, Head of Data at fintech startup Branch.5

Minimize costs today, innovate for tomorrow

As the world recovers from the pandemic, continued success depends on staying nimble and adaptive, argues the BCG Platinion report. Cloud computing can make companies more resilient by helping them to keep costs low, reducing overall IT spend by as much as 10% overall according to BCG Platinion. “For CIOs, cloud migrations can offer important near-term savings and benefits, while also reinvigorating progress toward the long-term goal of digital transformation.“

To learn more, read the full report from BCG Platinion.

1. BeyondCorp Enterprise: Introducing a safer era of computing
2. Building the future of work with Google Workspace
3. Hackney Council: Empowering 4,000 staff to keep serving their community from home
4. The Economic Advantages of Google BigQuery versus Alternative Cloud-based EDW Solutions
5. Fintech startup, Branch makes data analytics easy with BigQuery

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