TL;DR: Businesses in Asia Pacific and Japan (APJ) are increasingly adopting cloud-based economic models for greater agility and cost-efficiency. However, navigating complexities and challenges is crucial. Major cloud providers are hiring economists to help optimize costs. Transitioning to cloud models requires realistic expectations and consideration of additional costs. APJ’s diverse cultures and economies mean cloud economics may evolve at different paces. Singapore, as a mature market, is well-positioned for cloud adoption. Tailoring solutions to local needs and exploring regional providers can be beneficial. Strategic planning, metric-driven approaches, and lifecycle management of data are key to success. Having an exit strategy and integrating security from the outset are crucial for sustainable cloud solutions in APJ. Embracing cloud economics offers transformative potential for businesses in the region, but proactive addressing of challenges is essential.

By: Dave Russell, Vice President of Enterprise Strategy, Veeam; Rick Vanover, Senior Director Product Strategy, Veeam

In the ever-evolving landscape of technology, businesses across the Asia Pacific and Japan (APJ) region are increasingly realising the immense opportunities offered by cloud-based economic models. In fact, research has shown that the Asia Pacific region accounts for 14% of global cloud spending, and governments in different Asia Pacific markets have been ramping up their digitalisation efforts, thereby generating more demand for the cloud industry. This transformation promises greater agility, scalability, and cost-efficiency, making it an attractive proposition for companies looking to stay ahead in the digital age. However, to fully harness the potential of cloud economics, tech leaders must first navigate the complexities and challenges that come with this paradigm shift.

Understanding the Landscape: The Promise and Challenges for Cloud Economics

Major cloud service providers such as AWS and Azure are now actively hiring economists and accountants to assist their customers in optimising their cloud environments and containing costs effectively. This highlights the growing importance of managing cloud resources efficiently, as leaving them running idle can result in unexpected and substantial expenses. Hyperscalers can modify features and pricing without prior notice, leading to unwelcome financial surprises if businesses aren’t vigilant – this financial misalignment is commonly known as the “bill shock”, where companies find themselves confronted with unanticipated and exorbitant bills.

In times of crisis, such as during ransomware attacks, different priorities prevail, and hyperscalers often go the extra mile to support their customers. For instance, they may provide greater connectivity and bandwidth at no additional cost, aiding in swift data recovery.

However, transitioning from traditional infrastructure to cloud-based models is not without its challenges. The hybrid model, combining on-premises and cloud solutions, remains popular among organisations during the transitional period. It is essential to have realistic expectations and consider factors beyond just cloud services, including the need to refactor applications and account for additional costs such as personnel and software.

Considering the diverse cultures and economies in APJ, cloud economics may evolve at a different pace across the region. While major markets are rapidly adopting cloud solutions, some regions may take more time to fully embrace this transformation. For instance, businesses in Singapore are better positioned to implement cloud economics as it is a mature and growing market, with the adoption of cloud services projected to contribute US$6 billion to Singapore’s economy from 2020 to 2024. In a mature market, businesses can leverage economies of scale and benefit from cost efficiencies by adopting cloud economics. In the interim, organisations can look to service providers to bridge the gap and find cloud models that suit their unique needs.

Embracing Cloud Economics in a Diverse Region: Tailoring Solutions for APJ

In the culturally diverse and economically varied landscape of APJ, cloud economics may evolve differently across different markets. Cultural nuances and varying levels of technological adoption can impact cloud economics differently across APJ. Understanding the unique challenges and opportunities of each region can help businesses make more informed decisions and leverage cloud solutions to their advantage.

For specific considerations and localised benefits, organisations can explore the offerings of regional cloud providers. This approach takes into account political concerns and focuses on verticals where specialised services and expertise can be of greater value.

Strategies for Success: Optimising Cloud Economics for Your Business

As organisations embrace cloud economics, strategic planning and a customer-centric approach become paramount to success. By adopting the right strategies, businesses can ensure a smoother transition, maximise value, and mitigate potential pitfalls.

To avoid potential pitfalls, organisations must be metric-driven and understand the evolving lifecycle of technology and data. By categorising data based on its lifecycle, companies can optimise costs and storage strategies, ensuring cloud economics align with their business objectives. 

Furthermore, it’s crucial to have an exit strategy in place before fully committing to the cloud. Organisations need to be prepared to transition smoothly to alternative providers or on-premises services should the need arise, safeguarding against potential vendor lock-in.

Lastly, to strike a balance between security and cloud economics, businesses should embrace a holistic approach to cloud design. By integrating security, economic considerations, and disaster recovery planning from the outset, organisations can achieve a more sustainable and cost-effective cloud solution.

When used right, cloud economics presents a game-changing opportunity for businesses in APJ to embrace digital transformation and stay competitive. However, to reap the full benefits, organisations must be proactive in addressing the challenges that come with this transition. By understanding the intricacies of cloud economics, aligning expectations, and embracing a strategic and collaborative approach, businesses can unlock the true transformative potential of the cloud in the APJ region.

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