FINAL WORD
The future of business is in the cloud.
That is the message from global
analysts as the latest IT sales figures
show a marked shift away from
hardware. The shift to cloud services
and other digital business solutions
has slashed Gartner’s global IT
spending growth forecasts by half: a
cut of $67bn for this year alone, with
data centre growth predicted at a
modest 0.3% in 2017.
This is not necessarily bad news,
depending on where you are with
your digital transformation journey.
The same Gartner report expects
growth in enterprise software
spending of 5.5%. This was echoed
by SAP’s Q1 2017 revenue figures:
cloud subscriptions and support
revenue in the EMEA region grew
43%, with an overall revenue growth
of 10% for cloud and software
revenue across the region. In South
Africa, the results were even more
indicative, with triple-digit software
growth recorded.
FINAL WORD
From capex to opex
The shift to widespread adoption
of cloud services in essence turns
traditional IT capex into opex. This is
how it works:
Take a data centre as an example.
From the rebar in the foundations
to the halon extinguishers in the
ceiling and everything in between,
it all sits on your balance sheet as
an asset. As CEO, you have to create
a return on your capital employed.
That becomes hard to do when your
scale is sub-optimal and you need
to keep in mind the added costs of
development, testing and quality
assurance systems. Often, you end
up with systems sprawl that becomes
ever more complex to manage and
makes those positive returns all the
more elusive.
Cloud computing takes those
assets off your balance sheet and
turns them into opex: this makes
Every CEO needs a business
strategy for the digital economy
The ubiquitous and constant
generation, processing and
consumption of information and
content is an inescapable part of life
for all but the most marginalised.
The latest global statistics show that
there are currently more than 3.7
The shift to cloud
services and other
digital business
solutions has
slashed Gartner’s
global IT spending
growth forecasts by
half: a cut of $67bn
for this year alone,
with data centre
growth predicted at
a modest 0.3%
in 2017.
82
INTELLIGENTCIO
The ubiquitous
and constant
generation,
processing and
consumption
of information
and content is
an inescapable
part of life for
all but the most
marginalised.
it far easier to predict and extract
positive returns on capital employed,
especially when working with the
leading global cloud vendors such
as SAP. Because they’re operating
at a scale that most businesses are
unlikely to ever reach, they are able
to determine best-practice processes
quicker and transfer these learnings
on to their clients. In addition, they
can provide cloud solutions at lower
costs and offer clients the flexibility
of a subscription model that scales
with the business – this is highly
impractical when you’ve invested
huge sums into physical data centres.
www.intelligentcio.com
Cameron Beveridge, Director: Cloud and Line of Business,
SAP Africa
billion Internet users, of which 2.7
billion use one or more social media.
In Africa, Internet penetration is
still low at around 29%, but rapid
urbanisation and continent-wide
investment in especially mobile
Internet infrastructure is driving web
usage growth.
All of this would point to the need
for a digital strategy for every
organisation doing business on the
continent. But the modern business
does not need a digital strategy.
The modern CEO needs a business
strategy for the digital economy.
CEOs today are tasked to improve
shareholder returns, help the business
become more profitable, ensure the
business survives and grows, attract
and retain scarce talent, reduce risks
www.intelligentcio.com
to the business and drive innovation.
This last point – innovation – is
critical. More than half of the Fortune
500 from 2000 are gone. In their
place are a highly innovative new
breed of digital business: think Netflix,
Amazon, Facebook, Tesla and more.
These companies leverage technology
to become more competitive and
create new profit pools, upending
entire industries seemingly overnight.
Levelling the playing field
Cloud computing enables innovation
by levelling the playing field. All
modern innovation requires a solid
technology backbone to achieve
the type of scale that would help
translate innovative ideas into
commercial drivers. By eliminating
the complexity and managerial
burden associated with running on
premise IT, businesses can direct their
IT to address tomorrow’s business
problems instead of maintaining
yesterday’s landscape.
By virtue of their size and scale,
leading global cloud services providers
such as SAP get the benefit of
feedback from hundreds of millions
of users, giving them unique insights
into the types of innovations and
improvements they have to make
to ensure their cloud services are
delivering optimum value. This
ensures that the cloud technology
supporting modern businesses is
constantly improved and remains
ahead of the innovation curve.
Leveraging the power of cloud
solutions brings every aspect of
the business together, seamlessly
integrating customers, operations,
devices and business partners. It
allows you to focus on innovation,
freeing you up to reimagine your
future in a digital economy.
Can you afford anything less?
INTELLIGENTCIO
83