Examining the Benefits of Cloud-First Digital Transformation

Written By: Colin McMahon
  • 4/14/2022
  • Read Time : 6 min
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For industrial enterprises, shifting to a cloud-first mentality comes with a host of benefits for digital transformation (DX) - including increased agility and mobility, flexible collaboration, and increased innovation velocity. It is not, however, as simple as flicking a light switch, or even purchasing and installing new hardware. Shifts from on-premise solutions to software-as-a-service (SaaS) infrastructure can be challenging, especially if the organization in question believes one of several falsehoods:

1. The change must be universal, every solution now must be cloud-first.

2. The change must be rapid. If you’re going SaaS, you have to be prepared to be fully SaaS by the end of the quarter/year.

3. The change will create more work for IT.

These beliefs can stifle cloud-first DX projects before they even start, but none are accurate. The key to determining whether incorporating SaaS-based infrastructure will benefit your business begins with education of what is and (perhaps more importantly) what isn’t a cloud-first mentality.

What Is Cloud-First Digital Transformation

Being cloud-first does not mean being cloud-only. Savvy executives can look at their organization and evaluate pain points, such as siloed data, costly outages and maintenance, and unstandardized (thus frequently isolated) information – all of which can benefit from SaaS-based solutions. A cloud-first mentality only means that when you approach a challenge occurring within your organization, you first consider the use of non-premise solutions.

More organizations are looking to the cloud for answers, in part due to challenges created by the COVID-19 pandemic. Simply put, it is difficult to run an on-premise enterprise when even just a notable percentage of employees operate – at least in part – remotely. Even colleagues working industriously in their homes can create siloed data and produce bottlenecks without the right infrastructure. That said, while 2020 accelerated the shift toward cloud, the pandemic is not the sole reason businesses are embracing the technology. What began as a short-term fix has, for many, transformed into a long-term solution as cloud platforms have a host of benefits that go beyond supporting remote workflows.

This brings us to SaaS. While SaaS is not the same as cloud, the two terms are frequently used in tandem. Whereas cloud (or cloud computing) refers to a decentralized on-demand online computer platform, SaaS is software that is licensed by subscription, deployed in the cloud (public, private, or hybrid) and ideally architected to take advantage of cloud compute technology and licensing models to deliver benefits that no other software can.

While SaaS is an emerging concept in industrial software, many have been using SaaS in at least some capacity for years. Have Microsoft Office 365 – that’s a SaaS solution. Ever used Google Docs? That’s SaaS. In the PTC space, if you’re using Onshape, Arena, or Vuforia then you are using a SaaS solution. Basically, anything optimized for collaborating and operating in decentralized work environments.

3 Benefits of Cloud-First Digital Transformation

By understanding what cloud-first is, the use cases start to become apparent. The benefits of cloud first take into consideration both the advances in technology and an understanding of the evolving human work experience.

1. Cloud-First Digital Transformation Unburdens IT

Designing a competent, secure software infrastructure has always been a significant investment in IT resources, both in funds and in people – and people can burn out, especially in high-stress environments (such as the past two years). In its 2022 State of Burnout in Tech report, mental wellbeing software company Yerbo surveyed over 36,000 IT professionals in the US. The findings showed that over 40% of IT personnel felt they were close to burnout – whether from the sheer workload, the longer hours, or the loss of work/life balance.

This problem isn’t unique to IT, but it is hard to overlook just how challenged the tech sector has been over the last two years, as many organizations suddenly had to call upon these groups to create and support the rapid shift from the traditional infrastructure to one that was more remote-optimized – in addition to still performing all their additional duties. By shifting to the cloud and using SaaS platforms, companies can ease the burden on their IT departments without significant financial investment.

2. Cloud-First Digital Transformation Empowers Collaboration

Properly implemented, shifting toward the cloud can increase productivity potential and allow businesses to be more efficient than before. One such advantage is cloud-based product design:

 

 

Take the simple example of communicating design updates. Design engineers will often share CAD files via e-mail with no assurance that their collaborators are operating off the same revision – this is especially hazardous when communicating with suppliers and customers. Without some mechanism to ensure alignment, work may be duplicated, or critical changes missed. At best these simple collaboration missteps can result in hours wasted, at worst they may go unnoticed long enough to influence a chain reaction of misinformed engineering and business decisions.

Onshape, PTC’s SaaS -based CAD solution leverages cloud technology to resolve this issue. In Onshape, documents are shared through links rather than distributed as copies. There is therefore only ever one version of a design that can be accessed, viewed, and even edited simultaneously by those with permission.

3. Cloud-First Digital Transformation Facilitates Anytime, Anywhere Engagement

Many of the traditional boundaries of the work-life balance were dictated by on-premise architecture. While employees could take work home, it was typically isolated from the main network, either paper-based or field-based (I.e. an employee could take home a document to fill out or email themselves a file to work on). With SaaS infrastructure, network access isn’t dependent on proximity.

Businesses can now operate in a new environment, one where the work-life divide has become increasingly blurred for some. Employees working on a SaaS-based infrastructure can, provided they have proper authorization, access any file they need, at any time, from any location. This has completely changed the definition of “workplace” from a rigid, pre-defined area to almost any internet-enabled location. There are enormous upsides to this change, but also a few barriers that companies should keep in mind.

We already discussed burnout in the context of IT, but broader burnout is possible for employees who push themselves (or who are pushed) too strenuously to be “always on.” Adapting to an anytime, anywhere work mentality isn’t just a shift in software infrastructure, but also one in mindset. Regardless, however, it is only possible with a SaaS-based infrastructure.

What Experts Are Saying About Cloud-First Digital Transformation

There is one final compelling reason to consider not just a cloud-first mentality, but also the utilization of SaaS solutions: competition. Research firms like Gartner have been increasing their expectations for worldwide end-user spending on public cloud services, as it is becoming obvious that more investments are being made. According to Forrester, secure infrastructure-as-a-service platforms (like Microsoft Azure) reported growth as high as 48% over 2020. These investments will not be forgotten if and when the pandemic lessens enough to allow for a significant return to the office. In new IDC research, SaaS adoption across vertical and functional markets reached new heights in 2021. Revised forecasts indicate SaaS application revenue will surpass $300 billion by 2025, representing 53 percent of the total cloud software market. 

"The value of SaaS continues to surpass expectations to the degree that most businesses will only consider SaaS for new business applications," wrote Frank Della Rosa, Research Vice President, SaaS, at IDC. 

Organizations leveraging cloud and SaaS solutions will likely be more agile than those still using on-premise, legacy platforms. As we saw with Onshape, the benefits of a SaaS solution go beyond simply complying with remote work limitations.

SaaS: The Linchpin of Sustainable Digital Business

Read this IDC InfoBrief on how (and why) cloud-enabled digital transformation is accelerating.

Tags:
  • Cloud Native
  • Digital Transformation
  • SaaS
  • Augmented Reality
  • CAD
  • Industrial Internet of Things
  • PLM

About the Author

Colin McMahon

Colin McMahon is a senior market research analyst working with PTC’s Corporate Marketing team, helping to provide actionable insights, challenging perspectives, and thought leadership on trends, technologies, and markets. Colin has been working professionally as a research analyst for many years, and he enjoys examining and evaluating just how large the overall impact of digital transformation technologies will be. He has a passion for augmented reality and virtual reality initiatives and believes that understanding the connected ecosystem of people and technology is key to a company fully realizing its potential in the 21st century.