Oracle predicts 50% of IT budgets will be on innovation by 2020

As Nigeria pushes to join the fast moving train of the global digital revolution, with technological innovations taking over businesses, oracle has predicted that half of information technology (IT) budgets in companies will be geared towards innovation and no longer on system maintenance and so Nigerian companies must adopt innovations in order to avoid being marginalised.

During his presentation at the Oracle Digital Day, held in Lagos recently, Adebayo Sanni, Country Managing Director, Oracle Nigeria gave statistics to show why this prediction is more than likely to occur.

“The reason why we are predicting this is a result of the evolution and the excitement that we are seeing with cloud. Why is cloud important? because we have looked at the challenges that organisations are faced with reducing cost significantly while trying to gain market share. So effectively they have an IT budget. What is the point of spending 80 percent of that budget which is already tiny on maintaining systems that are very old? and that is what a lot of CIOs are doing today,” he said.

Answering specific questions, Sanni told BusinessDay that; “Our prediction pretty much says that what we want to do is to flip that budget, going from spending that 80 percent on maintenance to spending it on cloud. By spending it on cloud, the cloud company consistently maintains, upgrades and repairs without you even knowing. What a cloud company is offering you is a ready to go. Why do you need to buy the beer factory when all you really want to do is drink a bottle of beer? This is really why this is critical, so all that money that you would have spent on maintaining will be spent on innovation and what does innovation do for you in a digital world? it allows you gain market share, increase revenue, drive productivity up and gives you enough time to spend with customers rather than trying to maintain legacy equipments that should have been thrown out in the first instance.”

Prior to Oracle’s predictions, other IT solutions providers including Huawei had stated that cloud technology is the future for businesses. At the Open Cloud Congress West Africa summit in Lagos, a while back, Huawei said it had realised that the future of business is in cloud, and so, by depending on joint innovation, technology innovation and cooperation innovation, it had devoted itself to build an open, collaborative and win-win cloud ecosystem together with customers and partners.

According to online statistics, two thirds of top companies in the world at one stage or the other, have had their data centres breached.

The reality is that a lot of them just do not make it public because of the effect it would have on their customers.

However, when a company’s security is breached by a service provider that is expected to have security as the topmost agenda, the whole world is going to know because they should be sued and penalised. Adebayo Sanni mentioned that the cloud is the most secure place to store data because of this reason.

It has been said that Nigerian companies are reluctant to move to cloud and adopt it as the rest of the world is doing, as even the government has been advocating for hosting local data in the country with local data centres. “The issue is not that Nigerians don’t want to get on it, but we need to make sure that policies are in line with the 21st century and make sure that we educate our customers, identify, fix and respond to what their worries are. Worries about security, data sovereignty, all of those things are preventing cloud adoption.

“Cloud adoption is certainly not where we expect it to be in Nigeria at the moment, however, there is not an option for organisations to move to if they really what to gain market share and reduce cost. For this reason, it is a very critical responsibility of cloud organisations to educate customers, and education comes from trying to satisfy their key priorities,” He said.

To address the issue on government policies encouraging local data hosting in Nigeria, Xavier Verhaeghe, Vice President, Technology Solutions, Oracle, said; “Oracle today, has what we call the oracle cloud machine (OCM) which is a machine that sits at the premises of the customer that allows you to be able to go to the public cloud where you keep your data. The machine is behind the firewall so it means that we can still achieve the same thing. This means we are still able to keep data as we should but the customer has access to cloud and all the services that we are talking about but they need to acquire that machine. It has just recently been approved for us to be able to sell it in Nigeria.