Business and technology optimists want to believe in beneficial, self-reinforcing cycles. Technology titans including Amazon and Uber even attribute some of their growth to built-in flywheels.
Similarly, the evangelists of artificial intelligence depict a higher-order virtuous cycle, combining bigger data, better AI and more powerful cloud computing. Larger volumes of data serve as the feedstock for artificial intelligence, which produces sharper insights, which companies can quickly put to work using integrated cloud systems
New research from Infosys has found evidence of a self-reinforcing cycle involving, AI, data and cloud.
Infosys Cloud Radar 2021 inquired about how enterprises have adopted cloud and used it to boost business performance. The survey found some things that fit with conventional wisdom: cloud adoption has accelerated and will continue accelerating. Companies still look to the cloud to reduce costs and save time, something that’s been building for more than two decades.
But now, cloud has grown so pervasive and powerful that it can deliver new capabilities for companies, such as cloud-driven artificial intelligence.
Among other findings, companies that have shifted their business functions (CRM, ERP, procurement, HR systems) deeply into the cloud report much greater ability to extract value from data and AI. More than half of companies with 80% or more of their business functions in the cloud described their ability
Overall about 28% of survey respondents described their ability to unlock value from data and AI in the cloud as very developed. But that proportion jumps to 57% for enterprises with more than 80% of business functions in the cloud.
On closer examination, some clear logic underpins this apparent quantum leap. First, companies can use cloud to build data platforms that consolidate and surface enterprise data. AI models can then unleash the value of data in new ways. Second, AI models often require large amounts of processing power. Cloud allows enterprises to access such power on-demand, when the need for AI analysis occurs. Cloud also provides enterprises rich AI tools available on a per-use basis. Finally, better insights lead to better customer engagements, which leads to more sales and data, which can be consolidated via cloud in a way to further train AI.
Financial services, telecom, high tech and manufacturing companies each showed some distinction in AI capabilities. Top-performing financial services respondents indicated exceptional interest in using cloud and AI to enhance online and omichannel customer experiences. Telecom companies view AI and automation in the cloud as a new tool to forecast demand. High tech and manufacturing businesses generally keyed on using cloud and AI to improve quality-check functions and deploy cloud-based engineering tools for product development.
A cloud network-effect
AI aside, the Cloud Radar analysis showed evidence of a cloud-computing network effect. Now that cloud has grown more powerful and pervasive, companies can unlock new capabilities that directly impact the bottom line.
Cloud has long helped companies save time and money. But now, cloud has developed into a tool for enterprises to accelerate innovation, fuel digital transformation and achieve faster time to market. In addition to remote working, cloud enables richer collaboration and quicker innovation.
When used effectively, cloud gives enterprises complete visibility of their data and helps streamline business processes to gather, integrate, analyze and present insights to key decision-makers. Cloud provides businesses the capabilities to launch new products and services and ensure that the customer experience is at its best. The analysis found that effective cloud usage could add up to $414 billion to annual profits in the markets surveyed by increasing the development speed and utilizing the cloud’s capabilities.
Companies in any region or industry can boost their profits through the cloud. However, those benefits only kick in when businesses have at least 60 percent of their IT infrastructure in the cloud.
But thus far, few companies have achieved that level roughly 17% of companies surveyed have more than 60% of IT systems in the cloud.
But the disruptions of the past 18 months have set cloud up for further acceleration. Defensive priorities such as access, resilience, and cost all rose during 2020 – access becoming the most prominent. Those defensive functions had little impact on business results, but they’ve laid the groundwork for more impactful cloud functions to come.
Offensive priorities such as scale and capability fell in 2020 – but rise higher than ever by 2022. By that time, 41% of companies surveyed say they will have shifted at least 60% of IT infrastructure to the cloud.