Why Companies Need To Be Cloud-Native By 2030

Avi Shua is the Chief Innovation Officer at Orca Security. The speed of business, the pace of innovation and the evolution of the cloud have led inexorably toward the adoption of cloud-native environments. For most organizations, the sooner the better. At many organizations, the cloud has evolved fitfully. In its early days, considerations of cost tended to go back and forth. The obvious appeal of the cloud was in paying as you go rather than buying and maintaining the servers and physical infrastructure. But initial forays at lifting and shifting applications simply ported the same applications into the cloud. There was no difference in performance, and organizations almost always wound up paying a higher price. After all, cloud providers are also in business themselves. This led to the failure of a lot of cloud projects. In some cases, organizations invested heavily, pouring millions of dollars into cloud migrations, and they were paying more without reaping the real benefits of what the cloud offers. Some of them returned to on-premises operations simply to save money, in their view.

Calculate real costs versus real advantages.

One problem is that calculating the real costs of on-premises versus cloud-native can be difficult. It must go beyond comparing the costs of a server, database and license, for example, against a monthly, quarterly or annual bill for managed services. On-premises, you should factor in the overhead costs of staff time spent on operation, maintenance, upgrades and other steps, which can be difficult to quantify. There are also electricity and other expenses involved. The costs for cloud services initially appear to be high, but they need to be weighed against the savings produced in other areas, such as workforce and resource overhead expenses. The benefits of the cloud also need to be considered, such as the fast, easy scaling that a managed service enables, which otherwise could prove to be time-consuming and expensive. Parallelization—carrying out many computations simultaneously—is also something the cloud provides easily, allowing you to automatically scale up or down quickly. A significant advantage of cloud-native development is that it reduces the amount of time an organization needs to focus on things that are not part of core business requirements, such as enabling dramatically faster processing of routine tasks. Consider a bank that did batch processing every month and had to shut systems down for six hours. With the cloud, you don’t need to carve out those hours because you can scale just the amount of resources you need for the job, without taking away from other resources. It’s another example of how cloud environments allow organizations to improve processes in ways they couldn’t before. Another advantage of the cloud is that its flexibility and scalability allow you to experiment with new applications relatively cheaply compared with on-premises, where you may need to plan ahead regarding facility use and what you need to buy, along with building an application. If the experiment fails, you’ve wasted that money. If it’s a success, you still may need to scale quickly, which requires more resources. With the cloud, underwhelming experiments can be easily abandoned, while successful ones are scaled as needed.

Cloud-native enables future innovations.

Cloud-native also provides a path for future-facing companies, because cloud providers can take these advantages to extremes that were almost impossible in on-premises scenarios. One example is training an AI model on huge amounts of data. A process like that may happen only every few months, or even once a year, but it requires a huge amount of resources. It wouldn’t make sense to buy the resources just for that purpose, but the cloud’s scalability enables tapping into them. Cloud providers are competing to provide services higher up the value stack, enabling customers to implement more advanced and complex services. For example, Microsoft has made the integration of OpenAI into Azure one of its core differentiators among cloud services, and Google and AWS are now striving to compete. In scenarios such as that, the customer wins. And taking advantage of it would not be possible for on-premises organizations.

Cost and benefits favor cloud-native environments.

Moving applications to the cloud isn’t always the right choice; organizations need to think carefully about where they need to innovate and provide new capabilities. The costs associated with modernization are high, but the potential improvements once implemented can be advantageous. Organizations need to consider more than a simple billing gradient between lifting, shifting and buying cloud services. If you look at it just from a bare initial cost perspective, it will almost always seem like it’s better to stay on-premises. However, it would be rare—and possibly odd—to see a new business today start as on-premises. When considering the cost differences between leveraging legacy services versus cloud-native migrations, opting to not be cloud-native will always require paying a premium that eventually outranks migration costs. If you consider what an organization will be able to achieve in a cloud-native environment, you might see the value of the cloud in a different light. A cloud-native environment allows organizations to experiment faster, fail sooner and try new things, such as AI implementations or adding new components that you won’t have to backport to legacy, on-premises systems. You should always consider those types of innovative capabilities, both for now and in the future, that a cloud-native environment could provide and support. By the end of the decade, organizations that want to remain competitive will likely only be able to do so using cloud-native environments.

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