Digital transformation equals higher revenues and lower costs – the evidence

Jessica-Belle Greer

Jessica-Belle Greer

Hybrid cloud strategies are the key to leveraging new opportunities in the pandemic business worlds and beyond.

As covid-19 is drastically changing the way we do business, demand for more data and computer power will only increase. This point was not lost on Dirk-Peter van Leeuwen, senior vice president and general manager for Red Hat in Asia Pacific, as he opened the company’s Partner Conference, virtually. “We are facing a huge opportunity ahead of us,” he said.

With so many of us spending more time at home, Red Hat sees hybrid cloud strategies as the key to fully leveraging flexibility and scale brought by 5G, Edge Computing, AI and Machine Learning.

In a shared commissioned study by IDC, large firms investing in hybrid cloud strategies saw a return on investments over five years of over 600 per cent. And in those five years, organisations reported higher revenues, and a lower cost of operations by 54 per cent. There were twice as many applications added per year, IT teams were more efficient by 49 per cent and 80 per cent less downtime was recorded. “This is hybrid connection, and it’s bringing us into the future,” said van Leeuwen when sharing the results.

IDC predicts by 2021, 90 per cent of companies in Asia Pacific (excluding Japan) will rely on a mix of on-premise/dedicated private clouds, several public clouds and legacy platforms to meet their infrastructure needs.

The pandemic has forced a sudden economic shift from physical to digital. Proactive steps by business leaders now can put their companies in a better position for the new and next normal. However, there are downside risks that need to be manoeuvred, including contracting economies, which should only be short term. “It’s precisely why open source is needed to help companies survive,” said van Leeuwen. “The best idea can be anywhere.”

At the Digital Transformation forum, IDC Asia Pacific group vice president Sandra Ng expanded on the enhanced urgency of digital transformation and digital acceleration in a covid-19 world. “When we look at all these new requirements coming out from the buyer community, the focus around ecosystem collaboration, cooperation and co-innovation partner transformation becomes even more important today than ever,” said Ng.

Using IDC’s business recovery framework, Ng explained that slightly less than 10 per cent of the organisations surveyed are in the business continuities stage, particularly in markets where they are still in lockdown, or they have gone back to the lockdown phase. The vast majority of organisations, however, are in the middle three stages of cost optimisation, business resiliency and targeted investment.

In the resilience stage, organisations are prioritising technology resiliency, followed by operational resiliency and financial resiliency. “An increasing pool of organisations are really beginning to reprioritise their initiatives as they embark on this recovery journey,” said Ng. Trust is a significant factor. The top positive influences of resiliency include working with your customers, as well as data-driven programmes to deliver intelligence and insights.

Less than 20 per cent of the surveyed businesses were in a position to prepare and predict for scenarios they will face in a post-covid world, including Red Hat. “The end goal is to become future enterprises,” says Ng. “The ones that will really lead in this next normal era.”

Red Hat is the world’s number one provider of commercial IT products and solutions based on open-source software, with an ecosystem of over 3800 partners. More than 90 per cent of Fortune 500 companies use Red Hat’s products and services, across more than 40 countries. Despite the pandemic, they are still growing. “Going forward, I believe we need to share the new normal together,” said van Leeuwen in his address. “We need to embrace new ways of working.”

Jessica-Belle Greer

Jessica-Belle Greer

Jessica-Belle Greer is an experienced lifestyle features editor and writer based in New Zealand. She believes in big ideas and smart solutions.

Red Hat

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Red Hat is the world’s leading provider of enterprise open source solutions, using a community-powered approach to deliver high-performing Linux, cloud, container, and Kubernetes technologies.

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