Demand for cloud services has significantly surged during the pandemic. Various emerging industries have also advanced during this time. Indeed, the growth momentum of cloud services is expected to continue in the post-pandemic era.
Leo Liu: Operational Reform a Requisite for Business as Cloud Changes our Lives
The pandemic has not only propelled digital transformation in companies, but also digitalized the public’s way of living. According to Leo Liu, General Manager of Hong Kong, Macau and Philippines, Alibaba Cloud Intelligence, the concept of cloud native is gaining popularity as companies urgently adopt internet technologies in response to the resumption of business activities. When cloud native solutions become inseparable from the public’s everyday lives, they will be underpinning the construction of future business systems and the commercial world.
Cloud native solutions form one of the most important technical concepts in the domain of cloud computing. Liu quoted an example: “After fully adopting cloud native products, the core system of Alibaba was able to improve the cost-effectiveness of its resources; the efficiency of development, operation and maintenance; as well as the delivery effectiveness of scaled application during last year’s Alibaba 11.11 Global Shopping Festival.”
“Cloud migration” inevitable for companies
Liu reckons that “cloud migration” is inevitable for companies under the new normal. “The speed, agility and stability provided by cloud products can generate very positive benefits for business development and revenue growth.”
As the economic outlook remain uncertain and changes in business requirements evolve, Liu suggests that companies’ IT departments set up an IT infrastructure that includes cloud native and other products well in advance, so that companies are ready to embrace any rebound in demand or market opportunities that could happen at any time.
Local seafood shopping platform “FreshGo” is a notable example that captured market demand amidst the pandemic. As early as in 2019, “FreshGo” has been saving on costs by engaging Alibaba Cloud’s support to manage its platform’s business. During COVID times, “FreshGo” integrated its logistics, ordering and payment services. The company has also attempted to introduce its seafood offering through live broadcasting online, and successfully achieved close to 10-fold growth in sales.
Liu also shared that, over the course of building own-brand shopping sites for small to medium enterprises, Alibaba Cloud often receives urgent requests for putting new products and new functions online; the company is also asked to respond to traffic spikes during public holidays. “The cloud native solutions of Alibaba Cloud are able to allocate resources based on demand, and then flexibly adjust the capacity accordingly.”
O2O is a new development strategy for retailers
Figures from the Census and Statistics Department reveal that Hong Kong’s annual retail sales plummeted by more than 25% in volume in 2020 – the biggest yearly drop on record. In the face of the pandemic-induced crisis, local retailers have been actively seeking a way out. The integration of online and offline (O2O) is indeed a new development direction for the industry.
In March 2021, Alibaba Cloud hosted a webinar for the retail sector. Chow Tai Fook, Bonjour and other local retailers spoke at the event, noting that since consumers have become accustomed to online shopping during COVID-19, they are now more demanding in terms of the e-commerce experience. Under such a trend, Chow Tai Fook has streamlined the workflow of its brick-and-mortar stores and e-commerce platform. Bonjour, on the other hand, has built a unified platform that connects its three business infrastructures namely payments, logistics and data to overcome the prevailing problem for many local and cross-border e-commerce businesses.
Liu pointed out that cloud service providers could help retailers resolve the pain points they encounter in their operations. For example, Alibaba Cloud has recently launched a new retail IoT solution known as “Cloud Electronic Shelf Label” (Cloud ESL) in Hong Kong. It supports retailers to change the price of hundreds of millions of items instantly. It can also display a range of information, thus significantly improving the operational efficiency of branch stores.
Liu believes that retailers are not the only group that has increasing demands for cloud; the same is happening in the financial sector. He said that Alibaba Cloud will be fully engaged in this direction and it envisions empowering the digital transformation of Hong Kong’s financial industry with more comprehensive technologies and services, so as to help customize better service for financial clients.
Dave Chen: Continual Growth Expected for Cloud Services Amidst Inevitable Digital Transformation
The pandemic has been speeding up digital transformation in every aspect of our work and day-to-day life. According to Dave Chen, Director of Emerging Technologies of the Hong Kong Computer Society, “We have become inseparable from cloud solutions. In fact, all the apps on our mobile phones involve services supplied by cloud providers.”
Chen reckons that digital transformation is inevitable, and the cloud has provided us with a quick, reliable, flexible, and highly scalable platform, on which new digital services and applications can be developed by companies. At the same time, the application of digital transformation requires support from massive cloud services, which is driving a surge in the demand of relevant services.
Bright future ahead
“Before the advent of cloud technology, only sizeable companies had the capacity to acquire many servers or to construct sizeable websites or digital services.” Chen pointed out that circumstances have changed much. “A credit card is all you need to enjoy the same infrastructure and cloud service scalability of large companies instantly. In other words, the access requirements are much lowered.”
Since cloud technology is not bounded by geography, every industry has their vast demand for cloud solutions, and accelerated growth in demand is particularly evident in the sectors of finance, insurance, and retail, etc. “The mature development and strict security requirements of cloud services are a good match to the compliance needs of these sectors,” said Chen.
According to Chen, the future for cloud service is luminous. He also pointed out that many cloud service providers are also providing big data analytics, artificial intelligence, machine learning, collaborative communication software, mobile app development, IoT, and blockchain, etc. All these will prove to be key growth areas for cloud service providers.
Designing services from the customer perspective
Chen suggested that cloud service providers should pay more attention to the customer experience and design suitable services from the customer perspective. For example, they should construct more personalized services based on artificial intelligence, as well as make good use of big data analytics and AI applications. Furthermore, companies can consider developing their digital architecture from existing cloud services, which could speed up development and reduce costs.
Chen reminded companies not to overlook essential efforts into information security. They should also carefully consider the operating costs of cloud service to assess whether cloud adoption is beneficial.
Cloud security not to be relaxed
In the past, many companies were skeptical about the security of cloud platforms. Chen commented, “Major cloud service providers often invest massive resources on information security to ensure compliance with international certification and industry standards.”
It is a common misunderstanding that security can be enhanced simply by moving the server to the cloud. He stressed that security efforts in network and software design are not much different from the pre-cloud era, thus relevant work must continue.
Chen reminded companies that security will remain a corporate responsibility and suggested improving staff awareness on information security by strengthening training in cloud and information security. “When we use public cloud services, make sure sensitive information has been appropriately stored and encrypted, and take note if there is any sharing with third parties.” He also highlighted that companies must comply with various international standards. For example, the European Union has set out very high information security standards and violation of relevant laws will incur enormous penalty for companies.