How cloud technology is silently revolutionizing our economy

Its potential will be enormous: It should make work more flexible, faster and more productive, save start-ups from building their own infrastructure and offer private individuals more convenience. We are talking about cloud technology. Experts from the management consultancy McKinsey assume that companies have not yet exhausted the enormous potential, but are still scratching the surface.

In 2030, they expect more than $1 trillion in potential run-rate revenue (EBITDA) for Fortune 500 companies alone – primarily from potential savings and new business opportunities. The number will increase even further as the cloud enables the adoption of emerging technologies such as blockchain and augmented reality. This means that field workers are in high demand. According to the Korn Ferry Institute, there will be a shortage of around 4.3 million IT professionals in the technology industry by 2030.

Chaitra Vedullapalli also sees this shortage of skilled workers. She is co-founder and Chief Marketing Officer of Meylah, a US company that helps companies modernize with the cloud. For them, however, the shortage of skilled workers is currently slowing down the transition. Nevertheless, she sees cloud technology as an active driver that is digitizing the economy.

Because: Every company and every manager wants to use it now, she says. The Cloud Monitor from management consultancy KPMG paints a similar picture. According to this, 84 percent of companies in Germany with 20 or more employees use cloud computing, and a further 13 percent are on the verge of entering the cloud.

How the cloud changes or enables business models

There are many examples of how companies are using the cloud. And they come from companies in a wide variety of industries, regions and sizes. In this dossier, we look at the story of Chileaf, a small Chinese company that makes smart fitness equipment. Chileaf uses the services of the Chinese fintech XTransfer to sell its heart rate monitors and smartwatches to Europe and the USA.

XTransfer, in partnership with multinational banks, offers incoming payment accounts that enable small Chinese merchants to receive payments in more than 200 countries and regions. The start-up uses a sophisticated digital system to prevent fraud and money laundering. The basis for this is cloud technology: It provides the enormous computing power that enables XTransfer to automatically check the customer’s payment flows for suspicious cases.

The young company XTransfer also emphasizes another advantage of the cloud: flexibility. If the start-up grows strongly, it can rent additional capacities or reduce them if they are not currently needed.

Large companies like Deutsche Bank also appreciate this advantage of the cloud. In the future, it wants to use the cloud for a large part of its applications and also develop new solutions with it. To this end, the bank entered into a strategic partnership with Google Cloud in December 2020. The technology is to be used, for example, to develop a new online banking platform.

If we have a good idea today and want to try it out, we can get started right away.Samira Lauer

Samira Lauer, who heads a team of software experts at Deutsche Bank working on this new development, particularly appreciates the speed advantage of cloud technology. “Previously, if you wanted to develop a product or a new feature, you had to plan several months to sometimes a year in advance,” she says. “If we have a good idea today and want to try it out, we can get started right away. We can then see relatively quickly what works and what doesn’t.”

How sustainable is cloud technology?

Flexibility, speed, scalability – because of these advantages, not only Deutsche Bank and XTransfer, but also numerous other companies rely on the cloud. So it’s worth taking a closer look at the technology behind which there are actually still very real, physical data centers. The French company Data4 provided this closer look. Data4 operates 27 data centers in France, Italy, Spain, Luxembourg and Poland and is one of the European leaders in the sector.

Against the background of growing amounts of data and the associated energy requirements, Data4 is primarily concerned with one question: How can these data centers be operated sustainably? In this respect, the French company has already achieved some successes in the past. Although computing volume increased by 550 percent between 2010 and 2018, energy consumption only increased by 6 percent.

However, Data4 is also aware that further innovations are required so that data centers can continue to be operated sustainably and efficiently in the future. To do this, the company relies on renewable energy sources and AI.

And what about my privacy?

In addition to sustainability aspects, the issue of data security will also decide whether the cloud will be accepted. Especially for private individuals. We spoke to Carsten Fischer, deputy head of cybersecurity at Deutsche Bank. Fischer finds that the cloud seems more secure than traditional applications.

That’s because cloud service providers specialize in security, he says. They also attract good people and have budgets that “far exceed” traditional firms. Companies can also contractually agree with cloud providers that the data of European customers remains in Europe. Read in our interview with him which two practical tips he has for private users.

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