Cloud Computing Market Research for a $77B Semiconductor Chip Manufacturer
As one of the world’s largest manufacturers of semiconductor chips and computing hardware solutions, this multinational corporation needed to determine how to integrate cloud computing into their strategy to maintain growth and market position.
Background
"Digital transformation" is a tech term that has become a buzzword in recent times. In this instance, it maps out the process by which businesses move their operations to cloud-based solutions and adopt online productivity and collaboration services. While big players such as Amazon, Google, and Microsoft have become clear winners in the transition to cloud computing, the client wanted insight on how to compete in the cloud and have a seat at the table with the leaders already adept in cloud services. Migrating to the cloud isn’t a simple “lift and shift” decision; a variety of complex factors need to be considered. The primary objective for this project was to provide a roadmap of how these complicated decisions were made in other organizations in terms of cost, performance, and service capability, including cloud market fundamentals, competitive evaluations and lessons learned. Assessing business risk and getting the right information for making sure migration would be optimized effectively included understanding who the influencers are (both internally and externally), who makes decisions for the transition process, and what are the major decision criteria used in transitioning either to or from cloud.
Challenge
With $77 billion in annual revenue and over 100,000 employees, this technology organization creates world-changing hardware and semiconductor chips that have kept it at the forefront of the industry for decades. However, like all great organizations, it continuously faces challenges and competition as technology and markets evolve. At this particular juncture, the rapid growth of cloud computing is driving a shift away from legacy hardware solutions, and they were seeing the impact of this evolution in customer and revenue loss.Cloud computing is a general term for anything that involves delivering hosted services over the internet. Simply put, it works by allowing client devices to access data over the internet from remote servers, databases and computers. As complex technology becomes more central to enterprise operations, cloud supports the capabilities modern businesses increasingly require by providing flexible, scalable access to computing resources and IT services. The organization wanted to better understand the criteria their customers and other enterprise organizations were using to make these decisions to migrate to cloud solutions. Additionally, they wanted to gauge the state of the market and determine how they could provide additional value to their current customers and position themselves for future growth. Orchid Black was engaged to execute a research study in the form of nine deep-dive case studies that would evaluate the cloud migration journeys of relevant organizations and provide an analysis of insights to the client.
While cloud computing adoption was expanding rapidly even before the COVID-19, the urgent changes to business operations caused these plans and adoption to accelerate. Cloud trends can guide an organization’s digital business decision processes, vendor and technology selection, and investment strategies. Helping this semiconductor company navigate their role in this adoption has been an absolute pleasure on the path towards building a cloud center of excellence.
Partnership
Due to the complex factors involved in the decision-making process when developing a cloud strategy, Orchid Black elected to utilize a case study construct for this research engagement with specifically chosen enterprise organizations that could provide a variety of insights into how they integrated cloud initiatives into their strategy. The project was conducted in the following manner:
- Executed in-depth client reviews to align on the research objectives for the case studies, including the development of highly-detailed interview guides to reveal a thorough analysis around the decision-making process for cloud migration and the resulting business impact.
- Conducted over 45 external interviews and 300 hours of market research that outlined the opportunity, complications and investment plans of the chosen enterprise organizations and their journey into cloud infrastructure. Each case study included an introduction, opportunity/challenge, solution, benefits, results and lessons learned.
- Delivered a Summary of Findings that focused on why enterprise companies made the decision to move workloads (applications), including recommendations from industry experts who had first-hand experience executing major infrastructure transitions to the cloud.
During the course of the research, more than 2,300 data points were captured and synthesized. Insights were provided on a variety of fronts including business challenges, implementation approaches, solution drivers and results achieved.
Over a hundred different hypotheses around cloud infrastructure—the hardware and software such as network equipment, servers and data storage—were developed and explored so the client could have a clear understanding of where cloud is in the minds of their customers today.
Common themes were also uncovered and leveraged around topics such as migration roadmaps, cases/workloads, strategy and planning, cost factors, service levels, revenue, future planning, and metrics.
Insights
In this instance, the defining moment came when an analysis of the data revealed the organization had a place to sustainably grow in the industry if they could position their workloads appropriately. A workload is a specific application, service, capability or a specific amount of work that can be run on any computational device. This could be a simple smartphone app, or an elaborate application hosted on multiple servers with numerous client systems connected and interacting across a vast network. Different workloads have varying characteristics, and the best platform for a particular workload to run on depends on the nature of the workload. Put very simply, some workloads are designed to operate in the background, others are related to database operations or are transactional in nature, while others are analytic, using vast amounts of data. Workloads can be straightforward, or complex and specialized. And, while some workloads are suited for the cloud, some are not. The company learned they needed to position their offerings for specific workload use cases within determined frameworks. Once properly positioned, they would have a compelling value proposition to organizations contemplating cloud migration initiatives.
Solution
Key Theme: Strategy and Planning
- Once a decision is made, nothing is more impactful than time and planning. Success is a direct function of both, starting with an organizations’ information technology leadership setting the tone and approach.
- The organization’s business strategy needs to align with its cloud strategy or even a successful move to the cloud will fail to deliver expected business results.
Key Theme: Financial Considerations
- Estimating ROI does not need to be complex. When cost is not the primary driver, ROI can be a directional estimate.
- Financial consideration is not usually the lead driver, it's an outcome when done correctly. The economics are not straightforward, it’s more of an evolutionary move.
Key Theme: Talent and Adoption
- Organizations with in-house talent and resources benefit when time spent in low-value, labor-intensive activities relating to software and hardware support is reduced.
Key Theme: Workloads and Use Cases
- When looking to migrate, a bottoms-up approach and workload-by-workload analysis should occur to evaluate every application that is under consideration for migrating to the cloud.
“Driving strategy for a customer of this scale was an incredible opportunity. We had an excellent partnership with the client that allowed us to optimize our process at every step of the engagement.” – Alex Brodsky, Practice Leader, Market Research Consultant, Orchid Black
Orchid Black’s ability to complete deep, technical research while also having incredible communication skills is extremely rare. We now have a much better understanding of what is happening in the market and are beginning to develop a positioning strategy based on the insights that were shared.
Results
Overall, the research revealed there were valuable strategic opportunities available to this organization in cloud computing. The nine case studies showed there was no “one size fits all” in determining when on-premise hardware versus public cloud was the right choice—opportunities were reliant on use cases and other complex variables. Therefore, the client needed to precisely define how their offerings would enhance/support/elevate specific workloads that are being considered for cloud migration. They now plan to move forward to identify specific workloads where they can make an impact with their core offerings to expand beyond the examples found in the case studies and research.
The report also identified that additional value to existing customers considering cloud migrations could be found both in product-led and services-led business opportunities.
- Products-led opportunities included providing competitive on-premise solutions, creating hybrid product offerings, developing platforms that served evolving data demands, and partnerships with other organizations.
- Service-led opportunities included offering Workload Solution Architects (person in charge of leading the overall technical vision for a particular solution) so that businesses could focus on their core offerings while taking advantage of this organization's exceptional on-premise infrastructure knowledge.
Additionally, there were opportunities to build hardware to solve specific programs, fill gaps, or provide specialty hardware that would allow cloud service providers to build-out new services. There were also exciting opportunities to be leveraged by partnering with AI-first, next-generation tech companies that would position this tech company well for future growth.
As a hardware company, it can be difficult to pivot into new arenas, but the rich detail from this market analysis provided unforeseen avenues and new opportunities that were actionable. The client is now planning to work with Orchid Black to develop strategies that will enable them to be part of the ongoing cloud boom and continue as a market leader.
Orchid Black provided smart, tailored research that helped this enterprise organization identify and leverage growth opportunities so they could move confidently into cloud computing and ensure they remain agile in the highly-competitive tech market. The team’s deep expertise and connections throughout the industry were leveraged successfully to produce high-value case studies with relevant organizations.
