It’s Time to Bring Your Operational Tech Stack Into the Cloud

Summary

Industrial organizations take pride in maintaining cutting-edge IT that provides robust security while supporting innovation. But when it comes to operational tech (OT)—the vital systems that monitor and control frontline equipment—many firms take a different approach, relying on legacy on-premise systems that are complex, brittle and slow-moving.
 
In consequence, many OT systems are hard to refresh or reconfigure as markets evolve. They are typically incompatible with IT infrastructure, leaving companies wrestling with inefficiencies across their tech stacks. And they make it hard, if not impossible, to activate frontline data, impeding the adoption of AI and IIoT.
 
A new generation of cloud-based OT could change that. In 2022, just 31% of manufacturers implemented OT in the cloud—but almost 60% expected to adopt cloud OT in coming years. Managing that transition effectively is the key to integrating IoT, AI and powerful frontline software into the OT value chain—enabling innovation, building resilience and driving competitive advantage for industrial leaders.

The power of cloud OT

According to Gartner, industrial leaders will increasingly use cloud technologies to enable IT/OT alignment. Instead of relying on clunky on-premise systems, firms will use cloud marketplaces to connect or reconfigure best-in-class OT solutions, dropping new technologies in like Lego pieces depending on their changing needs.
 
That brings several key benefits:

 Cloud OT eases the strain on local teams: large cloud operators can resource cybersecurity functions and pool intelligence from their entire network, to identify and counter emerging threats. Using demilitarized zones, one-way data diodes, hybrid-cloud deployments and other strategies, cloud OT keeps operational leaders in control—while providing far more security for the organization as a whole.

2. Data-driven innovation. Cloud OT turns operational systems into knowledge systems, weaving frontline data into existing business analytics and feeding actionable insights back to frontline teams. That’s especially important given the rise of AI and IIoT: most legacy OT isn’t compatible with such technologies, but cloud OT enables companies to break down data silos and keep on innovating.

The results speak for themselves. Research shows that manufacturing companies see up to 2.4X more innovation when they utilize cloud-based systems. In other sectors, such as utilities, innovation rates can rise over 4X when cloud tech is used.

3. Agility at scale. With some on-premise OT systems remaining deployed for 15 years or longer, it’s hard to adapt to changing business needs. Shifting OT into the cloud removes friction, enabling organizations to evolve rapidly by installing plug-and-play solutions from trusted vendors, with no need for months-long integration processes.

The flexibility of cloud solutions also relieves enterprises of the need to commit large amounts of capital to unproven technologies. Using cloud tech reduces manufacturers’ failure rates by about 5%, enabling firms to sidestep irrevocable investments and more easily change course if new tech fails to deliver value.

4. Big performance gains. By breaking down silos, supporting real-time data sharing and eliminating data-storage headaches, cloud OT enables organizations to optimize performance. After migrating OT data into the cloud for analysis, for instance, one leading food manufacturer rapidly solved production headaches that had previously stumped engineers for months.

Cloud OT can integrate with edge computing to provide low-latency support for critical applications, while eliminating inefficiencies that occur when key functions are duplicated across OT and IT stacks. Importantly, cloud OT also enables companies to ensure compliance is managed consistently across IT and OT teams.
 

Bringing OT into the cloud

Bringing OT into the cloud isn’t easy. IT and operations experts must collaborate to overcome technological hurdles (including bridging between the different protocols used to manage IT and OT systems). Internal leaders must also consider human factors, assuaging workers’ concerns and weaving insights seamlessly into end-users’ workflows. And the entire process must be implemented without compromising security or triggering unscheduled downtime.
 
How can CIOs support this transformation? Here are a few best practices:

• Make a positive case for change. Both execs and frontline teams get attached to the status quo. It’s up to CIOs to make a compelling positive case for cloud OT, anchored both in business value and user experience, to convince teams to give up legacy technologies.
• Identify risks and opportunities. Any transition should begin with an audit of existing OT, identifying potential risks associated with the status quo as well as specific opportunities to improve security, innovation and performance by moving to the cloud. 
• Unify IT and OT oversight. Gartner reports that up to 40% of CIOs face oversight gaps because they lack authority over OT. Companies that manage OT/IT convergence effectively usually bring both functions under a single leader—typically the COO or CIO.
• Keep tabs on costs. Budget allocation remains an obstacle to IT/OT convergence, so be sure to weigh the sunk costs of legacy tech against the costs of upgrading to cloud tech. Done right, cloud tech can yield substantial cost savings over the mid- to long-term.
• Use the cloud to support talent. Cloud tech requires new skills and not just for software engineers—frontline teams must learn to use cloud OT effectively. Fortunately, cloud tech supports upskilling: using mobile devices, you can teach maintenance teams new skills within existing workflows.

Like any transformation, cloud OT brings challenges. But companies can’t afford to get left behind: cloud OT is the enabling factor bringing AI, data-driven innovation and IIoT into frontline industrial operations, as well as allowing companies to stay ahead in today’s fast-changing world.
 
Done right, cloud OT replaces a Rube Goldberg machine of legacy systems with a simple, secure solution that can be learned fast and managed efficiently. Industrial leaders must embrace this transformation—and build the change management systems needed to unlock a new era of operational resilience, flexibility and efficiency.