Innovation in the Clouds: Sky's Blue-Sky Approach to FinOps - Build What's Next
Case Study

Innovation in the Clouds: Sky’s Blue-Sky Approach to FinOps

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Sky is using a bold, innovative strategy to revolutionize their financial operations. Join us as we explore their journey and the cutting-edge approaches they're using to achieve success. Know more!

Google Cloud’s partnership with Sky Group, one of Europe’s largest media and entertainment companies, dates back more than four years to when Sky first became a Google Cloud customer moving diagnostic data from millions of its Sky Q TV boxes to its Google Cloud data platform.

In June 2019, a few years into their cloud adoption journey, Sky was faced with a challenge they had anticipated from the start. Their recent bill across all major cloud providers had been increasing rapidly, reaching their planned yearly budget after only six months. Sky wasn’t sure if they’d undershot their forecasts, if they were overspending, or both.

“In the beginning, we were given a brief to investigate internal cloud spend with the aim of finding out where we could make savings, but in reality we didn’t know what we would expect to find,” said Nathan King, a cloud architect in the Cloud Enablement Center and now Head of Cloud Financial Management (FinOps) at Sky since the start of 2020.

Nathan assembled a small team who started to explore Google Cloud spend using the Cloud Billing tool. At first, they drilled into their biggest Google Cloud cost categories and discovered some immediate cost optimizations with BigQuery, Compute Engine and Cloud Storage. Over the course of the next six months, through careful analysis, they managed to find over $1.5m in immediate savings, exceeding expectations.

Yet they soon realized this was just the tip of the iceberg—it was clear there were millions of pounds more savings to be made, but actually achieving them at scale would require careful planning. “We formed a FinOps function to target these savings, but with 600 to 700 projects for Google Cloud alone, spanning four Google Cloud organizations, it would have been a manual process and difficult for teams to digest our recommendations,” Nathan said.

After attending a Google-led FinOps workshop and shaping their FinOps strategy, Nathan’s team focused on iterating through the FinOps lifecycle phases of Inform, Optimize, Operate and generating savings over time. Here’s how they did it:

Inform: Make Information Visible

The first step was focused on developing a clear vision for cost allocation and recharge, which required partnering closely with the finance, procurement and tax teams (particularly for international and affiliates) to understand the supporting business logic and processes. With a lot of hard work, the team managed to break down barriers to implement and embed new processes into broader business functions like finance.

WIth the recharge model in place, the team ran a number of pilots to find the right FinOps tooling to meet their needs. They ran a number of pilots, including using Data Studio and visualizing BigQuery exports. Given their ambitions to scale across the enterprise globally, the team chose Google Cloud’s Looker to realize their vision, building intuitive dashboards to visualize spend and recommendations across all cloud providers. “We wanted one view across all clouds, where customers can dynamically see cloud spend and intelligent optimization recommendations in just one place,” Nathan said.

After less than three weeks of development, the Looker dashboards were ready to go and have been a game changer ever since. “The moment our leadership and different departments started seeing the Looker dashboards, the value we were adding as a FinOps team became immediately clear,” Nathan said.

There are different report pages for each stakeholder group, each custom developed and automated using Looker and BigQuery. The BigQuery Optimization page, for example, provides insights on Slots consumed across the organization, down to granular query data like the cost of each query, how it was written, who submitted it and number of slots utilized. The dashboards also highlight potential areas of optimization, like BigQuery datasets without retention policies set or where data isn’t partitioned.

A recent breakthrough has been building pages for business teams, showing the related cloud spend contributing to a business unit of value, such as the cost per live stream or per subscriber in Sky’s case. Although this is an inherently difficult metric to capture, the opportunity has been made possible with the FinOps team’s progress and is starting to drive business investment decisions.

Optimize: Drive Cloud Efficiency

The second stage of the FinOps lifecycle focuses on delivering optimizations. As Sky’s FinOps dashboards were operationalized and highlighted savings opportunities, they enabled users to generate more than $3 million in Google Cloud savings alone in 2020 and over $800,000 in other cloud providers.

The team began with focusing on the top four products by spend: BigQuery, Compute Engine, Cloud Dataflow and Cloud Storage. Working with their Google account team and studying Google whitepapers and blog posts like Cloud cost optimization: principles for lasting success, they developed their own best practice guidance and embedded recommendations into the dashboards.

Creating their own recommenders and leveraging Google Cloud’s recommenders, the team discovered a plethora of cost optimization opportunities. “Key examples were overly expensive queries, storage buckets set without retention policies, and VMs without autoscaling enabled,” Nathan said. Teams were then empowered to make their own savings, like the NowTV business unit that had been forecast to overspend for the year until they received their dashboard with thousands of optimization recommendations. After just three weeks, the team had implemented more than 90% of recommendations and brought their spend under budget for the year, saving more than 50%.

The FinOps team still searches for new recommendations every day and have been collaborating with Google product managers to take their insights to the next level. “We’ve loved partnering with Google product managers, who encourage us to give feedback on new features before they go to market. We’ve also shared some of our in-house recommenders to influence the features being developed by Google, including the Idle VM and Idle Persistent Disk Recommenders as part of Active Assist,” Nathan said.

Operate: Embed FinOps & Drive Self-Sufficiency

Now that teams could visualize their cloud spend and make real-time decisions based on cost optimization recommendations, the FinOps team has begun working on embedding processes, leveraging machine learning, and improving efficiency in their own ways of working.

Looker’s extensive capabilities continue to play a role in this. “Before we started using Looker, our most popular report was an electricity bill showing customers’ detailed monthly cloud spend, previous month comparisons and forecasts for months ahead,” Nathan said. “This report took days, sometimes weeks to run. With Looker, we’ve automated the entire process and brought that time down to just minutes.”

More teams are embedding the dashboards into their own processes, like finance, which now uses the interactive dashboards in meetings instead of static report snapshots, or in-house Google Cloud architects, who use the recommendations to optimize their cloud spend before deploying any technology.

As the FinOps team continues to operate like a product function, designing with CX/UX in mind and iteratively releasing new features like anomaly reporting, budget alerts, and forecasting based on machine learning, it’s becoming clear that Cloud Financial Management is a key capability and mindset that can impact wide-reaching parts of the business at scale.

Elevating Sky’s FinOps journey to the next level
Indeed, as more business teams collaborate with the FinOps function, the opportunities are growing. “The FinOps team has changed the way we view and manage cloud spend, enabling us to partner with finance and show digestible reports to the CFO. We’re now looking further to broaden our range of insights, like elevating our dashboards to understand how using Google Cloud is supporting Sky’s Net carbon zero ambitions by incorporating Google’s data center sustainability metrics,” says Vince Marco, Architecture Manager at Sky.

So, after being unsure of drivers for their increasing cloud spend in 2019, 18 months later Sky is far more confident about its investment decisions. The team knows that every dollar spent is being used optimally and driving maximum value for its investment.

If you’re an enterprise using cloud, but want to better manage cloud costs, consider setting up a FinOps capability and creating a FinOps mindset. Looker can help you get started by providing reporting and insights into cloud expenditures to identify initial savings. As you learn more and scale, empower teams to make their own savings utilizing built-in actionality for monitoring and customizing for business billing activity nuances and department-specific chargebacks. Reimagine how cloud finances can be managed and optimized as Sky is doing.

To learn more about Looker’s Cloud Cost Management Block visit Looker Marketplace.

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Accelerating Success: Tips and Techniques for Optimizing and Scaling Your Startup

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Maximize the impact of your startup by learning from the Build Series. In this series, we'll cover the key elements of growth and show you how to optimize and scale your business for success. Read more.

At Google Cloud, we want to provide you with the access to all the tools you need to grow your business. Through the Google Cloud Technical Guides for Startups, leverage industry leading solutions with how-to video guides and resources curated for startups.

This multi-series contains 3 chapters: Start, Build and Grow, which matches your startup’s journey:

  • The Start Series: Begin by building, deploying and managing new applications on Google Cloud from start to finish.
  • The Build Series: Optimize and scale existing deployments to reach your target audiences.
  • The Grow Series: Grow and attain scale with deployments on Google Cloud.

Additionally, at Google we have the Google for Startups Cloud Program, which is designed to help your business get off the ground and enable a sustainable growth plan for the future. The start of the Build Series delineates the benefits of the program, the application process, and more to help your business get started on Google Cloud.

A quick recap of the Build Series

Once you have applied for the Google for Startups Cloud Program, there’s so much to explore and try out on Google Cloud.

Figuring out a rapid but solid application development process can be key to many businesses in reducing time to market. Furthermore, learning what database to use to handle application data can be tricky. Deep dive into our Firestore video which walks through how Firestore can help you unlock application innovation with simplicity and speed.

We then move on to a deep dive into BigQuery and how it can help businesses. BigQuery is designed to support analysis over petabytes of data regardless of whether it’s structured or unstructured. This video is the goto video for getting started on BigQuery!

If you are someone looking to run your Spark and Hadoop jobs faster and on the cloud, look to Dataproc. To learn more about Dataproc and how this has helped other customers with their Hadoop clusters, click the video below to learn all things Dataproc related.


Next, we find out what Dataflow can bring to your business; some advantages, sample architectures, demos on the console, and how other customers are using Dataflow.

We also talked about Machine Learning, starting from selecting the right ML solution to Machine Learning APIs on cloud to exploring Vertex AI. Following that we look into API management in Google Cloud and how Apigee helps operate your APIs with enhanced scale, security, and automation.


We ended the series with the last two episodes focusing around security deep-dive and using Cloud Tasks and Cloud Scheduler.

Coming up next – The Grow Series

Dive into the next chapter of this multi-series, with our upcoming Grow Series, where we will be focusing on growing and attaining scale with deployments on Google Cloud.

Check out our website and join us by checking out the video series on the Google Cloud Tech channel, and subscribe to stay up to date. 

See you in the cloud!

Blog

A Year of Going Carbon-free! Google’s Road to Sustainability Looks Promising

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Google Cloud announced its sustainability goal to turn fully carbon-free by 2030. To mark the progress of the data centres on the road to sustainability, Google Cloud releases 2020 carbon-free energy percentages (CFE%). Read to know more.

Last year, we announced our most ambitious sustainability goal yet: to operate everywhere on 24/7 carbon-free energy by 2030. We’ve set this goal to ensure that Google Cloud continues to be the cleanest cloud in the industry, and to show that full-scale decarbonization of electricity use is possible. 

Since setting our target, we’ve made tremendous progress in how we trackbuy, and use electricity; advocate for clean energy policies; and support the development of new technologies to help us reach this goal. And we’ve done it all while maintaining a commitment to transparency that we hope will make it easier for other organizations wishing to fully decarbonize their operations as well.

In the spirit of transparency, today we’re releasing the 2020 carbon-free energy percentages (CFE%) for all Google data centers, as well as overall progress on the road to our 2030 goal: In 2020, Google achieved 67% round-the-clock carbon free energy across all its data centers, up from 61% in 2019. In other words, of all the electricity consumed by Google data centers in 2020, two-thirds of it was matched with local, carbon-free sources on an hourly basis.

Though we saw a significant jump in global CFE% in 2020, we expect the numbers to vary from year to year. Ultimately, CFE% is dependent on the amount of new clean energy that comes online in a given year; we may even occasionally see short-term drops in the numbers. What’s most important is that we continue to maintain a long-term trajectory toward our 2030 goal. With meaningful progress in clean energy policy, technologies, and transactional models, we believe 24/7 carbon-free energy is achievable.

Tracking these numbers also allows us to give Google Cloud customers greater control in their own sustainability efforts. Earlier this year we announced Google Cloud Region Picker, a system that helps our customers assess factors like cost, speed, and CFE% as they choose where to run their applications. 

To outline some of the events that have helped us get to 67% CFE%, we’ve developed an animation that shows every hour of electricity use in 2020, at all our Google data centers around the world. 

Visualizing clean energy: every hour, every day, everywhere

Imagining what every hour in a year looks like is hard enough (there are 8,760 of them, in case you’re wondering). With 23 data centers and 25 cloud regions around the world, we’re aiming to source clean energy for over 200,000 operational hours each year.

https://youtube.com/watch?v=f9ecEokcFlk%3Fenablejsapi%3D1%26

The “A year in carbon-free energy” animation points out significant projects that came online in 2020 to bring our data centers closer to operating entirely on round-the-clock carbon-free energy. It also reflects an unparalleled level of transparency about our carbon-free energy data, showing hour-by-hour where we need to develop new clean energy projects, advocate for policy changes, and in some cases, look to new technologies that can help fill in the gaps left by variable renewable resources. 

In the animation, you’ll notice sites with a lot of green at midday (e.g. in Chile or the U.S. Southeast) – a sign that solar is making a big contribution. Other data centers, such as our facilities in the U.S. Midwest, rely more heavily on wind power and are subject to seasonal fluctuations in wind speed. 

Preventing the worst impacts of climate change will require decarbonizing the world’s electric grids, as fast as possible. Google is committed to doing as much as possible to clear a path for others and drive collective action to achieve this goal. We’re thrilled to be in good company as we move, together, toward a carbon-free future.

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Telus Ensures Workers’ Safety Using Edge and 5G

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Cloud capabilities delivered at the edge of 5G network inspires a new use case for TELUS. TELUS' Connected Worker Safety Solution is relevant across verticals that allows right mix of people resources and digital tech to ensure workplace safety.

Editor’s note: In February 2021, Google Cloud and TELUS announced a 10-year strategic alliance to drive innovation of new services and solutions across data analytics, machine learning, and go-to-market strategies that support digital transformation within key industries, including communications technology, healthcare, agriculture, and connected home. By December 2021, TELUS had completed a pilot for a use case that leveraged Google Cloud AI and Machine Learning solutions and Telco Edge Anthos to increase safety in the workplace and save lives in manufacturing facilities. The use case leverages Multi-Access Edge Computing (MEC) to move the processing and management of traffic from a centralized cloud to the edge of TELUS’ 5G network, making it possible to deploy applications and process content closer to its customers, and thus yielding several benefits including better performance, security, and customization. Today, we invite Samer Geissah, Head of Technology Strategy and Architecture at TELUS, to share how the company is delivering on its promise to use this technology to drive meaningful change, starting with workers’ well-being.

Whenever a new technology buzzword comes along I think: what problems does this solve, and for whom is this going to make a real difference? That’s because at TELUS, we see innovation as a means to act on our social purpose to drive meaningful change, from modernizing healthcare and making our food supply more sustainable, to reducing our environmental footprint and connecting Canadians in need. Multi-Access Edge Computing (MEC) is a buzzword that offers an opportunity to do just this. That’s why we want to leverage cloud capabilities and optimize our network’s edge computing potential, tapping into our award-winning high-speed 5G connectivity to help solve some of industry’s most complex challenges.

The reason why this presents such a great opportunity is that companies across industries still rely on maintenance-heavy on-premises systems to manage core computing tasks. But, with cloud capabilities delivered at the edge of our 5G network, we open a new world of possibilities for them. For example, manufacturers who currently rely on IoT-enabled equipment in their facilities can deliver new experiences by running advanced AI-based visual inspections directly from 5G-enabled devices–all without the need for local processing power or extra on-site space. In fact, it’s this example that inspired our new use case, where our Connected Worker Safety solution can be applied across a range of business verticals to help improve safety, prevent injury, and save lives, demonstrating how the perfect combination of skilled people and digital technology can make the world a safer place.

Empowering intelligent decision making at the edge


Be it a farm, manufacturing facility, hospital, or a factory floor, workers should be able to work in environments where their health and safety are held as the highest priority. But how can employers ensure that their remote, frontline, and in-office employees are safe and healthy at all times? We’ve found the answer by combining Google Cloud AI/ML capabilities and Anthos as a platform for delivering workloads, with our network’s infrastructure.

Together with Google Cloud, we have been leveraging solutions with the power of MEC and 5G to develop a workers’ safety application in our Edmonton Data Center that enables on-premise video analytics cameras to screen manufacturing facilities and ensure compliance with safety requirements to operate heavy-duty machinery. The CCTV (closed-circuit television) cameras we used are cost-effective and easier to deploy than RTLS (real time location services) solutions that detect worker proximity and avoid collisions. This is a positive, proactive step to steadily improve workplace safety. For example, if a worker’s hand is close to a drill, that drill press will not bore holes in any surface until the video analytics camera detects that the worker’s hand has been removed from the safety zone area.

https://youtu.be/_mI-zWfeOHM

A few milliseconds could make all the difference when you are operating heavy equipment without guards in place. So, to power the solution’s predetermined actions with immediate response times, we worked with Accenture and hosted the application on an Anthos bare metal Google Cloud environment running on our TELUS multi-edge access computing.

Because all the conditions in our model are programmable, this solution can be replicated at scale across a variety of practical scenarios other than factory floors. The actions in response to the analysis are also programmable, which means companies can use this technology to look at workers’ conditions and decide the best course of action to educate, assist, and protect them. All this is done through a single pane of glass ecosystem, making it easy to customize this solution to meet various business needs.

Meanwhile, leveraging our existing global networks to process data and compute cycles at the edge eliminates the need to transport data to a central location for real-time computation. This means that we can offer this solution to partners while optimizing latency and lowering costs.

Powering blink-of-an-eye communication with Anthos


To put the importance of lowering speed into perspective, consider that the average latency of blinking your eye is about 300 milliseconds. From a safety point of view, preventative processes need to be much faster than that. For this use case, our machine learning models running on edge are currently processing data at a tenth of the time it takes for you to blink your eyes, and we’re aiming to lower that latency further to help build even safer systems.

Our plan is to deploy Anthos clusters on bare metal to our customers across Canada to take advantage of our existing enterprise infrastructure, making it possible for us to run our solution closer to partners and eventually enable just one millisecond of latency.

At that point, we’ll be able to power new use cases that require near real-time feedback, leaving absolutely no room for error. This could include remote surgery, platooning of fleets on autonomous vehicles, and many other cellular vehicle-to-everything (V2X) solutions that require high-speed communication for platform operators to manage remote edge fleets in far-away places.

Improving workers’ safety while enabling new sources of revenue


Although edge computing and 5G have been around for a while, we believe that use cases like this are only just starting to demonstrate the incredible speed of change and high potential that these models provide. The next step for us is to develop our workers’ safety solution and get it to market, making TELUS an early adopter of new 5G solutions at the edge that can help our business and industry partners make workplaces safer.

It’s a great win to be able to combine efforts with Google Cloud and reduce latency in a context where timing can impact and save lives, and I’m confident that workers’ safety is just the beginning of a series of industry challenges that we’ll address together.

Research Reports

Forrester and IDC’s Research Confirms Quantifiable Benefits of Running SAP on Google Cloud

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If you considering whether your organization must move SAP systems to Google Cloud, read this blog on Forrester and IDC reports with KPIs on the economic impact and business value from migration.

Cloud migration is top of mind for most companies with SAP applications. While the advantages of the cloud for SAP customers is generally understood, the move itself can be complicated and disruptive. So what actually are the business benefits and cost savings? How long will it take to recoup such an investment? Two recently published reports from Forrester and IDC can help to quantify the benefits and ROI. 

Getting answers to the million-dollar questions
Forrester and IDC bring different methodologies to the table; they asked somewhat different questions and used different models to calculate their financial KPIs. This allows you to get two different points of view on the same basic questions about value, risk, and ROI.

As it turns out, both reports found that customers who migrate their SAP environments to Google Cloud see an impressive return on their investments. From uptime and infrastructure to efficiency and productivity—both Forrester and IDC identified major benefits to companies that have made the move to Google Cloud.

Let’s walk through some of the highlights from both reports.

Forrester’s TEI model spotlights the power of uptime improvements
Based on in-depth conversations and quantitative research with six companies, here are the key findings from the Forrester Total Economic Impact (TEI) study for companies running SAP systems on Google Cloud: 

  • Direct cost savings. When they compare cloud subscription and related costs to what they spent on legacy systems and infrastructure, most IT leaders expect a cloud migration to deliver up-front savings. But according to Forrester, the companies interviewed reported average savings of more than $3 million a year, including eliminated hardware purchases, right-sized software licensing, staffing efficiencies, and other operational cost savings.
  • Dramatically improved uptime. Customers told Forrester that migrating SAP to Google Cloud pretty much eliminates downtime—planned or unplanned—as a significant IT concern. According to Forrester, companies realized an average of $1.5 million in savings per year by avoiding the revenue and user productivity losses that had once been a fact of life for their IT teams.
  • Significant efficiency gains. Because Google Cloud works to mitigate performance bottlenecks, infrastructure mishaps, network delays and more, the companies Forrester interviewed reported a yearly average of $500,000 in productivity gains for SAP business users and frontline workers.
top benefits of running sap on gcp.jpg

Companies also reported an annual average of $500,000 in additional IT efficiency gains after migrating SAP to Google Cloud. This quantifies what happens when IT practitioners no longer have to deal with the bottlenecks that come with legacy systems, and are able to spend their time on tasks that actually build value and help the business. Based on the Forrester analysis, the companies interviewed could expect average three-year net benefits of about $15.4 million.

“We benefit from any technical innovation in the infrastructure area because Google Cloud is doing that for us,” one customer told Forrester. “So, whenever there’s new hardware available or new processes or whatever, I don’t have to run the specific project to migrate from A to B.” 

IDC finds that good things happen when SAP downtime is reduced 
The IDC report highlights four areas where Google Cloud generates the most value for customers:

1. Cutting infrastructure costs. According to IDC, customers running SAP on Google Cloud spent 31% less on infrastructure each year, or an average of $233,000 less per company. The ability to scale SAP environments dynamically and to keep them right-sized was a major factor; so were the advantages of automated infrastructure monitoring and savings on software licenses once these companies could stop overprovisioning.

2. Giving a team better things to do. IDC found that the infrastructure, database, and security teams of the companies they interviewed reduced the time they need to maintain and manage SAP environments by an average of 66% per year, for a savings of $443,000, per company. As a result, these companies got the equivalent of a major staff expansion from their SAP migrations—giving them both the staff time and the expertise to focus on far more valuable activities.

3. Limiting unplanned downtime. These companies reported to IDC an average 98% reduction in unplanned downtime. Migrating SAP to Google Cloud significantly reduces the threat of downtime and saves the business an average of nearly $770,000 per year in lost revenue and user productivity. For some firms, the downtime savings topped $1 million per year.

overall impact - unplanned downtown.jpg

4. Making users more productive. The companies interviewed told IDC that by avoiding downtime and disruptions associated with upgrade and maintenance tasks for their legacy SAP systems, they saved an average of $363,000 annually in user productivity. But there’s an even more interesting under-the-hood stat contributing to these gains: These companies reduced the time required to deploy new SAP compute and storage resources from an average of 8.8 days to 1 hour.

When IDC added up these and other savings associated with running SAP on Google Cloud, it found an average three-year savings of more than $3.5 million and a five-month payback period

“We acquired another company, so basically overnight we needed to be able to deal with that increase,” said one customer IDC spoke with. “We doubled our footprint overnight, and we had to take on hundreds of additional employees. We needed a platform that we could easily scale up if we required, and that’s the benefit of running SAP on Google Cloud for us.” 

Explore the reports
There is a lot to think about when considering a move of SAP systems to the cloud. The cloud has many advantages, but migration can seem complicated and tricky; we appreciate that you are looking to understand the full picture. These papers are a great place to start. 

Download the reports—Forrester’s “Total Economic Impact of SAP on Google Cloud” and IDC’s “Business Value of SAP for Google Cloud Environments.” Then, get in touch.

Research Reports

Regulatory-induced Challenges Create Hurdles to Cloud Adoption for Financial Services Firms

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A recent survey by Google Cloud with Harris Poll involving over 1,300 leaders across the global financial services industry revealed that most respondents find slow regulatory approvals and uncertainties impact cloud adoption. Read further!

The financial services industry is evolving at a rapid pace, with shifting consumer expectations, new technologies, and developing regulatory requirements. Financial services firms need the right technology to help them stay agile and prepare for the future. 

The cloud is a key point of leverage for firms looking to improve performance across a broad range of activities. Moving to the public cloud can advance operational resiliency, improve staff productivity, increase regulatory compliance and enhance business model innovation. 

However, there are a number of financial services companies that are still hesitant in their cloud journeys. The barriers to adoption vary, from the complexity of legacy systems, to trust and skills gaps, regulatory uncertainty, and fragmentation of compliance requirements. Although many companies have embraced the benefits of cloud technology, more robust cloud adoption—especially around core back-office functions—will require additional facilitation, including through regulatory harmonization and streamlining.

A new comprehensive study on cloud adoption in financial services

To better understand the challenges and opportunities of cloud adoption in financial services Google Cloud, together with the Harris Poll, surveyed more than 1,300 leaders from the financial services industry across the United States, Canada, France, Germany, United Kingdom, Hong Kong, Japan, Singapore and Australia. 

There were five noteworthy takeaways from the study:  

1. A vast majority of financial services companies are already using some form of public cloud. A large number of surveyed financial services companies (83%) report they are deploying cloud technology as part of their primary computing infrastructures. Of those using cloud technology, the most popular architecture of choice is hybrid cloud (38%), followed by single cloud (28%), and multicloud (17%). Notably, of respondents without a multicloud deployment, 88% reported they are considering adopting a multicloud strategy in the next 12 months.

global cloud usage.jpg

2. Financial services institutions in North America are leading in cloud adoption. Of the financial services companies who are implementing a cloud strategy, the highest levels of cloud workload adoption were reported in North America, with institutions in the U.S. (54%) and Canada (52%) leading the way. The lowest level of cloud adoption was reported in Japan (42%).

workload adoption.jpg

3. As financial services companies continue to use the cloud, more core functionalities can and will be migrated. While many financial services companies have migrated substantial workloads to the cloud, the industry is far from full adoption when it comes to core, back-office workloads. Of financial services companies currently using a majority cloud strategy in the United States, for example, only half (54%) of their workloads are fully deployed in the cloud. Data and IT security (74%), regulatory reporting (57%), and fraud detection and prevention (57%) rank among the highest workload adoption. Core underwriting activity (40%) and data reconciliation (48%) ranked lowest. Across Europe, cloud usage for core activities like underwriting also scored low with the UK listing only 30% adoption.


4. Among respondents, there is a very strong positive perception of the potential for cloud technology to assist in business operations and regulatory compliance. Nearly all respondents (>88%) agreed that cloud adoption can:

  1. help adapt to changing customer behaviors and expectations,  
  2. enhance operational resilience, 
  3. support the creation of innovative new products and services, 
  4. enhance financial services institutions’ data security capabilities, and 
  5. better connect siloed legacy software infrastructure within financial services institutions. 

5. Certain regulator-induced challenges, including the complexity of sectorial compliance frameworks and fragmentation, create hurdles to cloud adoption for financial services companies. While 88% of respondents had a positive view of current regulatory efforts to provide guidance and clarity for cloud implementation, the results showed that more needs to be done to facilitate adoption. Most respondents (84%) agree that regulatory reviews and approvals take too long because of regulatory fragmentation across regulatory bodies. And 78% say that regulatory uncertainty over the use of public cloud prevents their organizations from adopting cloud technologies that would otherwise provide benefit to them. Additionally, a third of all on-premises respondents (38%) say that the large investment of resources for the regulatory approval process is a reason why they’re not using cloud services.

“While many banks have already deployed hybrid cloud environments, others are still in various stages of planning and deploying,” said Jerry Silva, research vice president for IDC Financial Insights. “Clearly, hybrid infrastructure is a reality, and financial institutions must focus not only on leveraging the modern infrastructure model to gain efficiencies, resilience and agility, but also on taking the necessary steps to manage such environments, including the security and compliance of cloud services.”

Future recommendations for financial services regulators

Financial services firms should continue to maximize the potential of technology by migrating more core workloads to the cloud, and actively considering multicloud and hybrid-cloud strategies. Such strategies enhance resiliency of existing IT infrastructure and reduce concerns over vendor lock-in. 

The research also points to steps that regulators could take to provide additional clarity and guidance, such as aligning regulatory reviews across agencies to avoid fragmentation; developing regulatory “safe harbors” for cloud adopters based on adherence to accepted standards and best practices; training regulatory staff on emerging tech; and advancing data reporting requirements via cloud and related technologies.

In the past few years, many regulators across the globe have taken a robust approach to rationalizing rules and guidance to cloud adoption in the financial sector, which has helped significantly stimulate adoption. But further assurances and harmonization of best practices around supervision is needed to advance risk-based and secure digital innovation.  

At Google Cloud, we’re committed to working with financial services customers and regulators to provide them with controls and assurances on risk management, data locality, transparency, and compliance. We are constantly engaging with regulators to share information, respond to their considerations and concerns, and address questions in the interest of transparency and building trust. 

To learn more about these findings and more, download our infographic and our full report


Research methodology

The survey was conducted online by the Harris Poll on behalf of Google Cloud, from December 7, 2020, to January 4, 2021, among 1,363 senior executives in France (n=113), Germany (n=178), the UK (n=192), Hong Kong (n=99), Indonesia (n=100), Japan (n=142), Singapore (n=71), Australia (n=134), Canada (134), and the United States (n=200) who are employed full-time, part-time, or self-employed whose main functional role is in risk/compliance or IT at a company in the banking, finance, or financial services industry with a title of director level or higher. The data in each country were weighted by the number of employees to bring them into line with actual company size proportions in the population. A global post-weight was applied to ensure equal weight of each country in the global total.

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Case Study

FFF Enterprises See 80% Improvements in Speed at Lower Cost by Moving SAP Data to Google Cloud

FFF Enterprises, a pharmaceutical distributor of lifesaving biopharma products, vaccines and plasma products deployed SAP on Google Cloud to leverage its ability to scale server demands, reduce costs and improve speed and performance. Learn how the migration helps FFF empower healthcare to care!

Blog

ShareChat Builds its Diverse, Hyperlocal Social Network. Thanks to Google Cloud

Editor’s note: Today’s guest post comes from Indian social media platform ShareChat. Here’s the story of how they improved performance, app development, and analytics for serving regional content to millions of users using Google Cloud.  How do you create a social network when your country has 22 major official languages and

Research Reports

Total Economic Impact of Running SAP on Google Cloud: Forrester’s Report

Forrester interviewed 6 customers, conducted a survey as well as a data aggregation to measure the total economic impact of running and migrating SAP systems on Google Cloud. Download the report for details on the findings on the benefits and three-year financial impact!

Blog

Google Introduces ML-based Predictive Autoscaling to Forecast Capacity and Match Scaling Demands

At Google Cloud, we believe you get most benefits from the cloud when you scale infrastructure based on changing demand. Compute Engine allows you to configure autoscaling to save costs during periods of low demand, and add capacity to support peak loads.  When you use a managed instance group (MIG), you can have an autoscaler

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