Cloud Native Upturn Amid Economic Downturn

essidsolutions

In this article, Tobi Knaup, CEO and co-founder, D2iQ, explains why companies will keep investing in cloud-native technologies, such as Kubernetes, despite the downturn based on three reasons and benefits. Companies and IT professionals will have a clear recognition of some of the best outcomes cloud-native can bring to their businesses. 

Uncertain economic conditions are impacting budgets at organizations across the globe, including allocations for IT spending. However, a recent Wall Street Journal articleOpens a new window found that CIOs are responding to a possible recession by adopting a more selective approach to their technology investments. CIOs and business leaders are identifying which technology investments are essential to the business and which technologies fall into the nice-to-have category.

As a practitioner and entrepreneur in the cloud native community for the past decade, I have seen the power and impact of digital transformation on businesses across industries. Cloud-native and Kubernetes technologies are the tip of the digital spear, the foundation of modernization that are giving organizations the agility, speed to market, and ability to create the innovative customer experiences needed to succeed in today’s rapidly changing digital environment. 

We have all seen the numerous ways in which digital transformation has changed how companies perform remote work, service customers, and deliver new products. The impetus for digital transformation has pushed organizations to adopt cloud technologies at a rapid pace. It is no surprise then, that Gartner included cloud-native platforms in its annual Top Strategic Technology Trends report for 2022, calling it a critical technology for organizations looking to gain the agility required to succeed in today’s fast-paced market. 

Organizations relying on these cloud-native technologies are able to accelerate the development and improvement of the applications that fuel their business. For example, organizations can more quickly add new features to existing applications to meet new customer demands or trends. In addition to faster application development, a cloud-native approach reduces operating costs and increases resilience and security. 

To remain competitive, cloud-native technologies are critical for any organization that wants to survive and thrive in the current uncertain economic environment. Below are three ways in which cloud-native technology can help foster business growth. 

Keeping Pace 

Businesses everywhere are always under pressure to modernize, become more agile, and reduce time-to-market for their products or services. However, the acceleration in the advances in digital technologies in the Internet age has accelerated the pace at which businesses must adopt new technologies. The cloud, Kubernetes, artificial intelligence (AI), machine learning, and edge/IoT computing have made such rapid advances that many organizations are struggling to keep up. 

During uncertain economic times, the most agile businesses are able to adapt to the changing environment faster than their competitors, particularly leading-edge technologies that give them a distinct competitive edge. Cloud-native and Kubernetes are leading-edge technologies that can help organizations operate, manage, and scale applications more efficiently while deploying required updates or new features on the fly. This enables organizations to outpace competitors by offering customers high-quality service and unique digital experiences that can grow critical revenue streams. 

Lower cost with greater efficiency 

According to Gartner’s latest forecastOpens a new window , worldwide IT spending will increase by 3% to $4.5 trillion in 2022 compared with 2021. However, this spending will occur at a slower pace than last year, as IT leaders become much more deliberate about investments. CIOs must ensure that every technology initiative is extremely cost-effective. 

This is why many organizations will look to technologies that improve efficiency and cost savings for their IT infrastructure. As one of the cornerstone technologies of cloud-native computing, Kubernetes quickly and efficiently enables the deployment and management of containerized applications at scale. This automation streamlines the deployment of cloud-native applications, reducing operational costs, particularly when compared with what are now considered legacy virtualization-based approaches.

As the ideal foundation for AI, Kubernetes is helping to accelerate AI development and adoption, providing a host of new capabilities for automation and innovative applications. Although AI is a relatively new tool in most organizations, successfully leveraging AI to build better products will be a deciding factor in enabling organizations to stay ahead of their competition. Organizations that learn to adopt cloud native and AI technologies will be able to build smarter next-generation products faster and more agile.  

Fresh experiences

The proliferation of smart applications and devices has hugely changed how consumers shop and companies serve and sell, the smartphone being a prime example. Driven by this shift and increasing demand for these devices, organizations must provide products and services to customers 24/7 while managing enormous volumes of data traffic if they want to achieve stable growth and create new revenue streams. By managing and improving their IT infrastructure and operations with Kubernetes and integrating AI/ML technologies to innovate and improve efficiency, organizations can provide unique experiences and uninterrupted service. 

Smart devices have also rejuvenated many traditional industries, enabling them to upgrade their services and customer experiences with the support of cloud-native technology. For example, my team is working with a global cruise line to elevate its customers’ experience with a host of digital products delivered via a mobile app powered by Kubernetes. 

More efficient data sharing and synchronization between on-ship and on-shore data centers powered by Kubernetes improve the customer experience in many areas, such as making reservations, ordering services, upgrading services, and onboarding. Passengers on board can receive informative data about their voyage in real-time, while customers preparing to board can complete a series of boarding processes and enjoy seamless transactions when purchasing services and offers for their trip. These types of real-time customer experience enhancements are the prerequisite for continuously creating new revenue streams.

Cloud-native Trumps the Downturn

In the current economic climate, cost cutting is unavoidable for many companies and organizations. However, experienced CIOs will see the opportunities and align technology investment spending with the improved business outcomes, competitive demands, and increased profitability that adopting cloud-native, Kubernetes, AI, and edge technologies can afford.  

As Gartner distinguished vice president Milind Govekar relatesOpens a new window , “There is no business strategy without a cloud strategy.” 

While cutting back on cloud-native IT modernization initiatives might save money in the short term, holding back could seriously weaken an organization’s long-term health and competitive position.

Have you had to cut back on cloud-native initiatives? Share with us on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window . We’d love to learn about your journey!