In part three of our focus on cloud services, we look at the benefits and opportunities these technologies offer to chemical producers and the accelerated adoption they’re now driving in the sector.
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In our previous articles on cloud computing we’ve examined the different layers of service chemical producers can harness to digitalize aspects of their operation and cost effectively add capacity and capabilities beyond the scope of their own plant resources.
We also focused on the robust security measures the leading cloud platform and service providers use to ensure any data hosted or used in the cloud remains protected at all times, with its owners always in full control.
Here, we’ll look at that rate of adoption of cloud services, which has accelerated in recent years, and benefits such as rapid deployment, instant scalability, and improved cost efficiency that are driving the change.
Cloud adoption is accelerating
Cloud computing is becoming more and more important in our everyday lives, at work, at home and everywhere in between.
Many of us now use tools such as Google Drive, Microsoft OneDrive, and Apple iCloud to store and share important files, photos, and communications. All are cloud-based services that work without us giving them much thought. Our mobile devices and the online services they’re connected to do their work behind the scenes.
Meanwhile, businesses increasingly innovate in the design, manufacture, and delivery of products and services using cloud-based development platforms like Amazon Web Services (AWS) and Google Cloud Platform (GCP). And the increasing rate of cloud adoption suggests not only that it’s here to stay, but also that its usefulness and potential is broadening too.
In late 2019, a survey of ‘the future of the cloud’ by Logic Monitor forecast that over 40% of enterprise workloads would run on public cloud platforms by the end of 2020. In contrast, it predicted just 27% would run on premise, down from 37% at the time of its research. Of course, that was before Covid-19 struck.
Gartner points out that the impact of the pandemic on traditional ways of working has seen cloud adoption accelerate to the point it’s becoming the ‘new normal’. By 2025, it predicts, 85% of enterprises will operate with a ‘cloud first’ principle.
In chemical manufacturing specifically, the rate of adoption is also gaining pace. Back in 2014, Accenture found producers were mainly considering cloud-based Software as a Service (SaaS) offerings for functions not directly linked to the chemical production process, such as HR, accounting, sales, and marketing.
Today, they’re increasingly being used across a much wider range of functions, from the running of day-to-day business operations and supply chains to product development.
Clariant, for instance – the parent company of Navigance – is migrating its many hundred global on-premise servers, including SAP, into the cloud. Its local servers have largely already made the move and are working well, with just two central data centers in Germany the last to do so. It expects to complete the process by mid-2022.
What’s driving this broader, accelerated cloud take-up? Some commentators suggest it’s the need to increase margins in a sector where they’ve traditionally been low. The subscription contracts typical of cloud services look more attractive than costlier and rolling technology licenses.
Another factor may be the desire of parent companies that are growing quickly through mergers, acquisitions, and divestitures to get their many different businesses using the same software at speed, and without a huge capital outlay.
Cost savings in the cloud
So what benefits are those businesses that move more and more of what they do into the cloud enjoying compared with those still working on premise?
One of the major advantages is that the upfront costs of cloud computing are comparatively low, and the savings continue once you’re up and running.
With many different customers using the same cloud service in a shared or ‘multi-tenant’ setup, the cost of licenses for hardware and software accessed online are usually lower than if you deployed them at your site, for your company’s use alone.
On-demand and subscription-based models of payment also mean maintenance, software updates, support and security are all taken care of by your service provider’s dedicated, expert teams. So there’s no need to tie up your own personnel dealing with these points or troubleshooting along the way.
Faster deployment and upgrades
Speed of deployment is another big plus. Cloud servers can be set up and applications configured and installed in a matter of hours, far quicker than on-premise deployments.
Cloud providers will also work to continually improve their service and offer their customers more. A continuous integration and delivery (CI/CD) methodology means they can deliver code updates and bug fixes much more quickly, frequently, and reliably than is possible with an on-premise setup.
The latest functionality can be available immediately for all users with the right access. And the capabilities they can access and enjoy keep improving incrementally all the time.
Rapid, easy scaling
With cloud computing, you only pay for the capacity you need, so you can add more of it or take some away whenever you need to.
For some small and medium businesses especially, this ability to scale at speed opens up possibilities previously out of reach under the on-premise model, with its high cost of some software licenses. There’s no need for physical kit cluttering your own premises to give you headroom for growth.
As well as capacity, using cloud-based SaaS offerings also enables you to access capabilities and expertise that might otherwise be out of reach. Technologies such as machine learning, for instance, offer massive scope to improve operational efficiency but can be time and resource intensive. Cloud services can solve the headache of trying to find the necessary capacity and expertise internally by making them simple to ‘turn on’ instead.
In short, making the move to the cloud enables you to quickly and cost efficiently tap into additional capacity, expertise, and the latest capabilities when you need it. It’s why more and more producers are looking to harness cloud services to get ahead of market pressures to optimize their operations.
Navigance can help you take the next steps and use your data securely to get you working smarter. We can connect with your own IT experts to discuss what you need and what’s possible. So talk to us any time.