The potential for the convergence of technologies such as cloud computing, artificial intelligence, blockchain and 5G to alter business processes was already evident. Yet the Covid-19 pandemic and subsequent lockdown has shone a light on how hesitant organisations ‘are likely to be flattened by savvier competitors that push the edges of innovation.’

Those words are taken from a KPMG report, put together alongside HFS Research, which surveyed 900 business and technical executives at Global 2000 enterprises.

The report, titled ‘Enterprise Reboot: Scale Digital Technologies to Grow and Thrive in the New Reality’, focused its research on two phases. Phase one was conducted as many countries began to see the impact of Covid-19 in March and April, while phase two took place during shutdown a couple of months later.

Impact on investment

Overall, more than half (57%) of executives polled said coronavirus had ‘significantly’ changed their organisation’s strategic priorities for emerging technologies. This means that the immediate focus, understandably, was survival. Yet a greater number (59%) said the pandemic had created an impetus to accelerate their digital transformation initiatives.

The problem, however, is that to help ensure survival, budgets have been slashed. Investing in digital transformation will create value down the line – but are organisations able to take that first leap of faith?

Getting a clearer picture and goals, therefore, is needed. 56% of those polled said cloud migration had become ‘an absolute necessity.’ This is partly driven by the maturity of some technologies, such as cloud, automation and analytics. Less mature offerings are also evident, however. Two thirds (64%) said the combined use of emerging technologies is much more beneficial than usage in isolation. ‘AI-powered’ and ‘cloud-enabled’ are emerging as the standards, the report added.

Looking at the two separate phases of research, cost reduction was cited as the primary objective when investing in many of the technologies. Hybrid or multi-cloud was seen as a cost-cutter, as was artificial intelligence and process automation. 5G was seen as ‘essential for future survival’, while blockchain and edge computing were seen as more long-term plays; blockchain as a foundation for infrastructure modernisation, and edge to generate brand value.

In phase two, all emerging technologies analysed – bar blockchain and edge – were seen as essential for future survival.

The investment gap between the phases of research was illustrated starkly (above), with some industries, such as healthcare and life sciences, and banking, almost halving their spend. Industries most impacted by Covid-19, such as travel and hospitality ($15m average spend phase one, $12.4m phase two), manufacturing ($15m/$11.6m) and retail and CPG ($13.8m/$8.5m), were more likely to put their chips on red.

Hybrid cloud takes over from multi-cloud

For cloud computing specifically, the report showed how the pandemic has not only shifted priorities, but scope. “Instead of piecemeal migrations of small datasets, many companies are now intent on moving an entire function’s data to the cloud at scale,” the report noted.

Priya Emmanuel, managing director of cloud strategy and transformation at KPMG’s US division, said understanding of the cloud’s benefits – value creation and collaboration – were well-known. “The daunting task is figuring out how to digitally rearchitect the business leveraging cloud, while continuing to deliver day-to-day business services,” the report added.

As the pandemic has progressed, hybrid cloud has emerged as the primary model. While 51% of executives polled in phase one were looking at multi-cloud, this dropped to 15% in phase two. Hybrid cloud, which saw 25% adoption in phase one, went up to 45%. Microservices (11%/18%) and containerisation (13%/23%) saw modest increases.

“Major enterprises are planning to adopt this architectural cloud approach in the future to reduce risk of service disruption, extend the corporate network and functional workloads, take advantage of the best available services and features, and improve overall flexibility and interoperability of the business,” the report noted.

Hybrid cloud, as an extension of private cloud infrastructure with an existing public cloud, is therefore seen as a safer bet than wrangling with multiple cloud providers. This can also be seen in another recommendation by the report: changing the operating model. This includes security; cloud security may be an attractive proposition if it works, but leave a door ajar and your environment becomes a liability.

You can read the full report here (pdf).

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