By Sudhir Nair, Chief Delivery Officer & Global Head, Infra & Cloud Business, Tech Mahindra

Today, many businesses’ digital transformation journeys are well underway. Our latest IT survey with business and technology leaders confirms the accelerating pace of at-scale core technology transformations. The results point to a much greater focus on cybersecurity and on investments in cloud technologies, even as most companies have continued transforming their core architecture and infrastructure.

While this transition began before COVID-19, due to the $1trillion business value cloud adoption could unlock, the pandemic significantly accelerated the trend. The survey also confirms that the competitive divide between winners and the rest has only grown during the pandemic.

In these uncertain and volatile business environment, CEOs will be pleased to learn that migrating to the cloud offers a plethora of benefits, that is not limited to increasing including the ability to greatly boost operational efficiency and cutting operational expenses but also improving their market share by accelerating GO TO Market strategy execution. A successful CLOUD Transformation results in a positive impact in every one of the following value-creation measures we asked about: increased revenue through existing streams, increased revenue from new streams, decreased costs, and improved employee satisfaction.

These advantages are encouraging organisations to ramp up their adoption of cloud technologies, which can create a more flexible infrastructure speed up technology deployment and get digital products to market more quickly.

A rain(cloud) on the parade

All of that said, risks do remain. Valuable data will always attract the attention of unwanted bad actors and their attempts to access this information will continue to be a thorn in company’s digital journeys. Cloud outages caused by cyberattacks, human errors, technology failures, application defects, poorly designed architecture and inability of the organisation preparedness for the failures, which can be reputational and financially crippling, but the risk can be significantly reduced by CIOs taking preventative action and preparing adequately for the potential aftermath. 

In 2021, a one-hour outage cost Amazon an estimated $34 million in sales. Not every company is the size of Amazon, nor would most cloud outages have that level of financial loss directly associated with them, but it does highlight how significant a cloud outage can be. 

It is also a common misperception that most outages are caused by cyberattacks, although this is not the case. Infrastructure or software failure has been the most common cause of cloud outages since 2022. Obviously, this does not imply that security should be overlooked; the more data organisations store in the cloud, the more likely they are to become a target. Every organisation is in some shape of hybrid and multi cloud environment brings more challenges to cause cascading effect across the spectrum (Ex: 3rd Party API’s).

Increasing number of cyber incidents coinciding with growing reliance on digitisation, a proliferation of endpoint devices, and increased vulnerabilities in hybrid and remote-work setups—is not a pandemic-era phenomenon but rather part of a new business reality.

The most damaging effect of an outage or data breach is the loss of customer trust and their business reputation. Consider the example above: for a marketplace less embedded in the current ecommerce landscape, an outage like the one Amazon suffered could lead to its sellers losing trust in the platform and moving to a competitor. A data breach that includes confidential information about your employees, suppliers, and customers will inevitably lead to a loss of stakeholder trust and unwillingness to continue sharing information. In these scenarios, the final nail in the coffin could be the economic implications of losing clients to competitors as a result.

So, with the effects of an outage being so severe, what can CIOs do to guard against them?

Prevent, Predict, and Protect

The good news is that there are many ways to minimise the chances of a business experiencing an outage. The first thing a company should do is undertake detailed due diligence when selecting a cloud provider. It’s imperative to understand the condition of their infrastructure, their system functionality, and their processes and guidelines to be followed in the event of an outage. There are several hyper scalers s who natively provide highly available and resilient infrastructure across dispersed geographical region to minimise or nullify the impact of outage. 

Second, during the design phase, the architecture design team must ensure that the design have built adequate disaster recovery provisions according to the criticality of business application.  As many outages occur due to hardware and infrastructure issues, they often only affect one physical location. Having a backup cloud location will continue to allow your users access to services if an outage happens, limiting the impact on your users and therefore your organisation.

According to Mckinsey report, human errors contribute to one-third of cloud outages, therefore, CIOs should make a conscious effort to mitigate this risk. It’s crucial to invest in skill uplifting of employee to the changed operating model post cloud migration, not only to ensure they are bought into the transformation initiative, but that they fully understand the system. Having a clear understanding of how the new digitised system operates will help team members spot when something isn’t quite right or when there’s an opportunity to further streamline processes. 

Another effective tactic is using emerging technologies such as Machine learning (ML) to identify possible outages ahead of time. Workload forecasting with ML involves considering all necessary variables, including timelines for future rollouts, long-term planning, and customer metrics, to project workload trajectory and recommended timelines for infrastructure maintenance. ML programmes can analyse cloud performance data in real time, and if they identify a disruption, they can automatically offer an alternative, fully functional workflow. As a wider society, we have not yet fully reached ML’s potential, but technology leaders across the board believe that mass adoption is imminent thanks to its many high-value use cases, including cloud outage prevention. 

The road to redemption

The path to recovery is expensive, time-consuming, and demanding, but organisations must be prepared for it. Having a clear plan in place in advance is essential for ensuring that the recovery process is as efficient as feasible. CIOs should take the lead on this by setting clear protocols and procedures to follow and making sure that all relevant employees, from developers to customer success teams, know exactly what to do in the event of a cloud outage. 

In fact, IDC reports 80% of small businesses have experienced downtime at some point in the past, with costs ranging from $82,200 to $256,000 for a single event. This could be hugely detrimental to a growing business, as well as those operating at enterprise scale. 

As such, CIOs should take all the preventative steps possible to reduce cloud outages – and ask all the necessary questions of their cloud providers.