Cloud has become a ubiquitous buzzword, but it's now being spiced up with the secret sauce of AI, making it even more essential as every organisation wrestles with the challenge of disruption.
Cloud computing is still an infant concept but it's evolving much quicker than many people realise.
Some organisations in New Zealand have embraced cloud fully.
However, growing numbers are now choosing to have a foot, or toe, in the cloud camp while maintaining a strong link to legacy.
What we're seeing is a wholesale move away from relying on one monolithic ERP system, towards one that's either legacy or in the cloud, while being augmented by micro systems and services.
This mix-and-match approach is made possible through multiple APIs.
It's a very palatable proposition for most organisations because it enables them to evolve step by step, without the need to throw the ERP baby out with the bathwater and start again.
While the case for cloud is strong and well understood, it hasn't been strong enough to encourage more organisations to move further towards it.
However, the pressure to use it more in the future may be about to increase with the growing importance of AI.
What is the value proposition of cloud?
It's well-known that cloud's value comes from the potential to lower computing costs and increase business flexibility by being able to upscale and downscale data quickly and efficiently.
In addition to this, there's no need for up-front capital expenditure, it delivers better collaboration and document management, and it provides the ability to work from anywhere.
It also supports competitiveness and is kind to the planet.
But there are also reasons why organisations are reticent to move more of their ERP to the cloud including existing financial commitment and investment in legacy platforms - fear of losing control, concerns about security, performance and being tied to one provider.
However, whatever side of the fence you sit on, or if you are perched on the top, the advent of AI brings a different perspective to this discussion and may tip the balance in favour of cloud.
This is because of data volumes and the need for flexibility and scale.
AI's potential and appetite
The potential for AI is enormous, and we don't yet understand the full extent of this.
It's already providing virtual assistance to connect customers with company information, mining for and adding value to data, and making existing technology better by learning and adapting.
It also presents a very real way to develop capability and efficiency by managing many mundane and time-consuming tasks.
AI will free employees to focus on more productive activities, and this leads to a better working environment, culture and ultimately customer service.
AI's fast food is vast quantities of data – it is a hungry beast and will have a growing appetite as more and more AI functionality arrives.
Will legacy cope in an AI world?
So here's the question - for businesses to take advantage of AI, are legacy systems up to the job?
The issue with legacy is that it can be confining and inflexible.
Cloud computing is an ideal fit for an AI world because of its ability to corral information, deliver intelligence and be flexible and adaptable.
Possibly mixing and matching cloud with legacy in a hybrid ERP system is the best solution for many organisations who want the benefits of both approaches.
But there are a lot of thought leaders in the IT world seeing AI together with cloud as the next major step.
Sundar Pichai, Google chief executive said, “We will evolve in computing from a mobile-first to an AI-first world,” and his view will mean the need for as much potential to scale as possible.
The Financial Times said that once data is moved to the cloud, companies will have much more access to varied data feeds and intelligent services and infusing this with their own operations will be possible thanks to “AI in the cloud”.
The message here is if companies are to take advantage of the next big change, they should lean further towards the cloud because if they don't, opportunities could be missed.
Eric Schmidt, chairman of Google's parent company Alphabet, says:
“It's clear to me [AI] is going to be the foundation for the next layer of programming.
This echoes the late Steve Jobs who called it the “one more thing” — the unexpected bonus that would outshine all other benefits of moving to the cloud.
With the weight of commentary about AI, it's hard to ignore the potential of it when it's driven by the cloud, whether it's connected to a legacy ERP system or not.
Put simply, if companies are still only on legacy systems as the AI juggernaut comes down the road, there's a strong possibility they won't have the ability to adapt fast enough and they could become just that - a legacy.