“With the virtualisation of our 5G core network, we are laying the foundation for the digital transformation of the German economy. This collaboration with AWS is an important part of our strategy for building industrial 5G networks”, said Markus Haas, CEO of Telefónica Germany.
Sentiment about cloud – especially public cloud – has been on a slight roller-coaster ride since they emerged back in the “noughties”: From initial reluctance to reluctant acceptance – to customer driven enthusiasm to scaling back and migrating back data and apps to on-premises data centres or private clouds to a more recent acceptance, that most enterprise resources may work best in a hybrid or public cloud environment.
Still, the viewpoint of many is still that core resources for the most part belong on-premises – especially if they are essential for the running of the business or involves sensitive data.
It is in this light that the Telefónica Germany announcement is interesting. On the face of it, it may appear that this is a possible major validation of public cloud as a platform for core systems and sensitive data. Although the core network components will remain on a different platform delivered by Ericsson, there is clearly an element of that.
Perception on Public Cloud
Many organisations remain sceptical with regards to public cloud. Ecosystm data shows that almost 40% have private cloud as their primary cloud deployment model (Figure 1); roughly a third have gone for a hybrid model and only around one quarter have chosen a public cloud model.
Most cloud deployment strategies ultimately come down to an evaluation of cost vs. risk and this evaluation is clearly demonstrated in Ecosystm data. Close to 80% of those choosing an on-premises private cloud model mention security and compliance as a main reason whereas cost considerations are the main reason for those opting for a public cloud model (Figure 2). What our data also shows is that public cloud providers are not necessarily winning the argument of cost savings among users.
For many organisations today, security and compliance concerns are still a valid point against public cloud as a primary deployment model. However, as we see more and more initiatives like Telefónica Germany, this argument diminishes – and it will become harder for IT organisations to convince senior management that this is still the way to go.
The Edge Complements the Cloud
The other noteworthy take-away from the Telefónica Germany initiative is how cloud-enabled edge computing is being embraced by the network design to ensure lower latencies for those who need it. The company states, “If companies use 5G network functions based on the cloud-based 5G core network of Telefónica Germany / O2 in the future, they will no longer need a physical core network infrastructure at their logistics and production sites, for example, but only a 5G radio network (RAN) with corresponding antennas.”
As I’m sure that you are an avid reader of Ecosystm Predicts every year, this should not come as a surprise as we wrote about something like this in the Top 5 Cloud Trends for 2020. Although some are touting Edge computing as the ultimate replacement of Cloud, we then believed – and still do – that it will be complimentary rather than competing technology. Cloud-based setups can benefit from pushing computing heavy workloads to the Edge in much the same way as IoT and provides a great platform for managing the Edge computing endpoints.
But to go back to the private cloud bit – while private cloud is not going away in the foreseeable future, we may be starting to see its demise in the more distant future.
To paraphrase a famous Brit: Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning for private cloud.
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The five-year partnership will involve Microsoft and NAB sharing development costs and investments to migrate around 1,000 out of 2,600 applications from the NAB and BNZ stacks, on Microsoft Azure. By 2023, NAB aims to run 80% of its application on the cloud, build a robust cloud foundation, and enable customers to access applications and services on the cloud.
The partnership aims to support NAB’s commitment to continuous improvement and innovation, leveraging the Microsoft global engineering team. It also involves setting up of the NAB Cloud Guild program, where Microsoft will train 5,000 NAB and BNZ technologists to equip them on cloud and allied technology skills.
NAB and Microsoft have previously collaborated to improve the experience for NAB customers, through cloud-based applications. NAB’s cloud-based AI powered ATM was the result of a proof-of-concept (PoC) developed on Microsoft Azure’s cognitive services, in 2018. It involved general ATM security captures along with facial biometrics to enable customers to withdraw cash without a card or a phone.
Ecosystm Principal Advisor, Tim Sheedy says, “If ever there was a sign that multicloud is the predominant approach for businesses, this is it. NAB is a big AWS client – in Australia and New Zealand. They lead the way for businesses in training thousands of employees on AWS technologies through their Cloud Guild. But now Azure is also developing a strong foothold in NAB – the public cloud services market is not a one-horse race!”
“Many businesses that have standardised on – or preferred – a single cloud vendor will find that they will likely use multiple cloud environments, in the future. The key to enabling this will be the adoption of modern development environments and architectures. Containers, microservices, open-source, DevOps and other technologies and capabilities will help them run their applications, data and processes across the best cloud for them at the time – not just the one that they have used in the past.”
Sheedy thinks, “NAB’s competitive advantage will not come from whether they are using AWS or Azure – it will come from the significant time and effort they are investing in giving their employees the skills they need to take advantage of these environments to drive change at pace. Too many businesses are increasing their cloud usage without making the necessary investments to upskill their employees – if you know you are planning to spend more on the cloud, then start now in reskilling and upskilling your staff. There is already a real shortage of cloud skills and it is only going to get worse.”
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The recently held AWS Public Sector Summit in Singapore showcased some of the regional AWS implementations, and how organisations are leveraging the Public Cloud differently.
In her keynote address, Teresa Carlson, Vice President, Worldwide Public Sector set the tone for the industry show cases by saying that a successful Digital Transformation (DX) starts from a radical rethinking of how an organisation uses cloud computing technology, people, and processes to fundamentally change business performance.
AWS Empowering the Public Sector
Carlson is clear on what Public Sector organisations must do and where AWS can help them:
Define what Cloud refers to in the organisation. The first step in bringing about a Cloud First transformation is to be clear on the true definition of cloud computing.
Create a “Cloud First” policy. To adopt a Cloud First policy, it is imperative to have leaders with a clear vision who really drive technology initiatives forward for all the right reasons like security, cost reduction, scalability, privacy and rapid acceleration of citizen services.
Focus on Security & Compliance. AWS has global compliance certifications with 200+ services and key features focused on security, compliance and governance. New services such as the use of AI for threat detection have been implemented and are quickly evolving into a mainstream feature.
Modify your Procurement vehicle. A formal cloud procurement model must be adopted instead of creating ad-hoc processes and a rush to adopt cloud to meet the specific needs of individual departments. AWS has the expertise to assist government IT leaders in selecting the right acquisition approach for their agency.
Do not ignore Skills Development. Investing in cloud skills development – whether at the central IT level or in the individual business units in the Public Sector – is imperative, as roles evolve and new roles emerge. AWS has over the years offered free courses and industry certifications to Public Sector employees interested in learning the foundations of cloud computing, storage, and networking on AWS to advanced skills courses in emerging technologies such as AI.
While cloud may have started off as a means of offsetting CapEx, its role has since evolved into being a major vehicle for DX. Several governments across the world have adopted Cloud First policies to spearhead innovation, increase agility, and improve citizen services. Cloud is increasingly seen as a foundation for many emerging technologies that governments are experimenting with and implementing such as AI, automation, Big Data analytics and Smart Nation initiatives.
The skepticism around Public Cloud security seems to have diminished over the years, with the perception that cloud providers use state-of-the-art technologies to protect their environment and continue to upgrade their security features in the face of new and evolving threats. However, the Ecosystm Cybersecurity study finds that nearly 53% of Public Sector and allied organisations that use Public Cloud feel that the security measures offered are sufficient. Leading cloud providers such as AWS should make it clear that essentially it is a shared responsibility and impress on organisations that the responsibility to secure their own applications and the interface with the Public Cloud ultimately lies with the deploying organisations.
Industry Use Cases
There were several industry use cases presented over the 2 days and it was heartening to see so many Asia Pacific examples of transformation. Tan Kok Yam, Deputy Secretary, Smart Nation & Digital Government Office shared that the key to a successful Smart Nation initiative is to build user-centric services rather than having an agency-centric approach, in his presentation on Singapore’s “The Moments of Life” app. Edwin H. Chaidir, IT Manager at WWF Indonesia presented on how AWS’s machine learning capabilities has helped the organisation to automate identification of specific orangutans in the wild, freeing up resources (money and time) to reinvest in other wildlife protection initiatives.
One of the implementation stories that impressed the Ecosystm analysts was the one shared by Rookie Nagtalon, Consultant for Digital Transformation at the Chinese General Hospital and Medical Center (CGHMC) in the Philippines, where he spoke about how they were able to bring about transformation in their patient life-cycle management. Healthcare in Asia Pacific is a diverse and disparate market with organisations at different levels of IT and business maturity – against a backdrop of different country-level goals and healthcare policies. It was encouraging to hear about a transformation project in a not-for-profit organisation from an emerging economy.
The challenges that healthcare organisations face are unique in many ways:
Legacy systems that still work and hence there is no business case for replacing them
Approximately 2/3rd of the IT budget going into running the basics, leaving limited resources for emerging technology adoption and transformation projects
The shift to value-based healthcare and the need for data-driven insights to support it
The unpredictability of the workload and the need for an agile IT infrastructure
Security and compliance mandates that protect patient data and require storage of records over extended periods
Working with these challenges, how does a healthcare organisation bring about Digital Transformation?
Nagtalon’s team was assigned the task to bring about this transformation within a 10-month timeframe.
The key challenge.An awareness that no one vendor can provide the entire gamut of functionalities required for patient lifecycle management. In spite of recent trends of multi-capability vendors, hospitals need multiple vendors for the hospital information system (HIS), ERP, HR system, document management systems, auxiliary department systems and so on. Each of these vendors have their own development team and infrastructure requirement, which stresses the internal IT resources. DX involving multiple legacy systems requires a step-by-step approach. The challenge is to identify the right systems to start the journey with.
Vendor selection criteria.The need to find one solution that would enable seamless data sharing across the disparate systems. The vendor selection criteria that were used focused on ease of use and speed especially when working with multiple data sources. In keeping with the industry, the ability of the vendor to support mission-critical applications was put through the filter of what was referred to as ‘Code Blue’.
The solution choice.A cloud solution that can empower teams and remove worries about the infrastructure. The hospital chose AWS as their transformation partner, who used a system interface blueprint to integrate data from their SAP ERP system, Medcurial’s MeRx HIS, 128 HR system, Canon’s documentation system and multiple diagnostics systems.
The future roadmap.Enabling the organisation to be a Digital Hospital. The solution was implemented in 7 months and hit the right ROI requirements, reducing billing time and impacting the bottom line in terms of both recovery and revenue. It has created the base foundation for future plans such as device integration and the provider is well set on its journey of Cloud, IoT and Robotics.
Nagtalon raised an important point when he was asked the key reason for the success of the project – executive buy-in. Transformation projects work best when it is enterprise-wide and senior management sponsorship is a must to enable that. However, he also mentioned humorously that he had become extremely unpopular during the implementation. This is where a centre-of-excellence with ‘champions to the cause’ from each key department helps. Organisations should look to engaging with the stakeholders early and to get their buy-in as well as the executive’s.
AWS’s marketing message to healthcare providers includes allowing them to focus on their mission and create their differentiation, and enabling them to incorporate new and emerging technologies. This implementation certainly ticked those boxes. What was particularly positive was the big thumbs up the AWS implementation team received. Organisations will increasingly partner with platform providers in their transformation journeys and implementation capabilities and best practice guidance will be the key differentiators for vendors.