Data Cloud - the skill to transition from a rowing boat to a speedboat

This goes beyond just running IT systems "in the cloud," which can also be offered by specialized Latvian companies; nowadays, major cloud providers (AWS, Google, and Microsoft) also offer unique and innovative technological services, such as protection from malicious attackers, video transcription tools, access to artificial intelligence resources, and even renting a space satellite by the hour. The efficiency of such operations cannot even be compared to traditional business, where we buy physical hardware, maintain it in our data centers, and worry about cyberattacks.

What is being done with clouds in Latvia?

Unfortunately, we tend to look more at the stars than take action. Instead of evaluating how to leverage the potential of the cloud for growth, many companies still choose to follow the traditional path, purchasing additional servers as needed and hiring extra labor. In working with Latvian companies, we observe two main groups: those who buy their own and pay a lot to operate their data centers using proven but outdated technologies, and those who buy local hosting services without fully understanding what that actually means. The common phrases used for these decisions are “It’s cheaper” or “Our engineers know better!”. This is also confirmed by Eurostat data – we use clouds less often (28.5% in 2021 and 35.8% in 2023) compared to most EU countries (in 2023, Latvia ranks 23rd).

Of course, there are companies that use the Microsoft Azure offering, though this typically means renting an additional server rather than utilizing the integrated innovations available there. This can be explained by both decision-makers' and engineers' lack of knowledge. Even experienced engineers may not know how, with the help of cloud technology, they could set up a secure and stable service in just a few hours - for example, an elegant video upload process and then the ability to view it in high quality across various devices and continents simultaneously.

It should also be noted that the popularity of clouds varies. Our observations show that Microsoft Azure is more popular in Latvia than Amazon Web Services (AWS), while globally, AWS continues to hold the lead with 31% of the market, Azure is second with 25%, and Google Cloud Platform (GCP) consistently holds third place with 11%.

So, what are the expected benefits? - not just cost savings, but also the company’s efficiency metrics.

The range of cloud computing offerings is very broad, and the benefits are diverse and individual to each company. After migrating to the cloud, one of the most noticeable benefits is typically global access and the elimination of waiting times. While in the past, ordering additional computing resources or launching a new digital product on a live system would take weeks, now this can be done in just a few minutes. It’s worth mentioning that security experts are often quite surprised by the improvements in cybersecurity metrics in the cloud, as global providers have invested huge resources into it. Over time, the company’s cultural mindset shifts from "we operate in Latvia with specific resources" to "our clients are all over the world, and our resources are unlimited." This significantly enhances innovative thinking and opens up new, unexpected opportunities. If technological products are cleverly re-engineered during migration, overall costs can drop by as much as ten times.

What to do? - the foundation of success is a carefully developed plan.

Just as Riga is not yet ready, migrating to cloud computing is not a one-day task and may seem daunting. Such changes are not like simply switching from a trolleybus to a tram; it’s more like stepping from a rowing boat into a speedboat, where one wrong decision could capsize the boat. One must consider that, regardless of the company's size, resources, and long-term plans, the transition can become a disruptive change in the company, involving almost all employees and departments. Before making any decisions, it’s recommended to conduct an inventory and evaluation of the systems and services against potential cloud solutions. This applies to both external and internal systems. In this first step, it’s advisable to include technical specialists (cloud architects) who can help navigate the broad range of cloud computing offerings.

Once the company’s heatmap is created, with the expected improvement values, it’s time to assess which departments and systems to start with. Logical and sequential development is crucial both from a technical perspective and in terms of ensuring smooth employee education and readiness management. This is followed by a roadmap, where technical architects can provide estimates about the required workload and thus create a timeline-based plan.

Such changes will also require a financial investment. Surprisingly to some, the recommendation is that the calculation of potential costs should be entrusted to a representative from the finance sector, who should work closely with the technical staff, rather than the technical manager being responsible for it. It’s important to consider various types of costs – maintenance, wear and tear, workforce development, and so on. Change management plays a very significant role in such a project, requiring involvement from both senior management and communication representatives, as well as engineers and all involved parties, and sometimes even call center employees.

But how long will it take? - for some companies, a project-based approach is suitable, while for others, a product mindset is recommended.

If IT systems are not the core business of the company, the most common choice when moving to the cloud is a project-based migration with a clear end result. This often means giving up their own server room and replacing internal systems with cloud solutions, as well as training engineers both in tool usage and management. Other company employees might even be surprised that the user systems don’t change much but become more modern and efficient. Such projects are recommended to be planned and executed within a short timeframe to avoid delaying related business processes.

On the other hand, in cases where the core business of the company is IT system development and sales, it’s better to think long-term about the product and gradually align business and engineering collaboration in the cloud. In this case, it’s crucial to evaluate which systems are used for development and operation, as there’s a chance that some of these systems may no longer be needed in the cloud.

In the end, it’s important to remember that the cloud is a paid service, and its careless usage can lead to significantly higher costs than necessary. If the company doesn’t already have knowledgeable cloud computing engineers, it’s recommended to at least initially reach out to professionals who are not only experts in cloud technologies but also understand IT process organization and DevOps methods. A successful and resource-saving model is to establish a partnership with a consulting company that is long-term interested in your company’s development, focuses on improving its expertise, and draws experience from working with other companies. Such a partner will also help secure cloud resource usage discounts! This way, you can continue focusing on your core business while the partner company takes care of your cloud needs.

Article expert - Uldis Karlovs-Karlovskis. IT Trainer with 20 years of experience in leading Latvian and international IT companies. Thanks to his engineering background, experience leading up to 150 engineers, and specialized additional training in psychology, he has an in-depth understanding of the latest technologies and engineer behavior. He supports business management representatives in decision-making and can build a communication bridge between these groups. Currently, Uldis, together with the ZenIS team, is developing the AI adoption with Professional DevOps support program, which helps partner companies technically master AI capabilities and improve IT efficiency, costs, and speed.

References:

1. Comparison of cloud service providers https://www.techtarget.com/searchcloudcomputing/tip/Top-public-cloud-providers-A-brief-comparison  

2. In-depth comparison of cloud service providers https://brocoders.com/blog/gcp-vs-aws-vs-azure/  

3. 2021 vs. 2023 data on cloud usage in companies across Europe https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20231208 1#:~:text=In%202023%2C%2045.2%25%20of%20EU,pp)%20increase%20compared%20with%202021

4. Q1 2024 cloud computing market overview https://www.statista.com/chart/18819/worldwide-market-share-of-leading-cloud-infrastructure-service-providers/