Cloud strategies are moving now from a comprehensive business case to real transition projects which must align with business outcomes. We can see different waves of cloud adoption during the last 20 years.
A single cloud strategy such as moving all IT systems to the cloud does not exist. Moreover, views of what cloud really is vary too. Before moving to the cloud, companies need to address three questions.
- Where do we stand and where do we want to go in our cloud journey?
- What does cloud mean for us? How do we define it, considering our situation towards applications already in the cloud, moving onsite applications towards to a private, hybrid, public or multi cloud approach?
- What is a realistic end state?
For companies having a cloud strategy in place, the corresponding actions and steps are case by case depending on the unique company’s situation.
Most companies have a multi cloud strategy and that is the main challenge of the cloud strategy on how to handle it the best way.
A 2018 survey by analyst firm Forrester on behalf of Virtustream found that 86% of respondents (727 cloud strategy and application management decision makers in the US, EMEA and APAC) characterized their organizations’ cloud strategy as ‘multi cloud’, identifying most with the description ‘Using multiple public and private clouds for different application workloads’:
Respondents to the Forrester/Virtustream survey defined multi cloud in several ways, including:
- Leveraging multiple cloud technologies at once (32%);
- Using public cloud in parallel with traditional non-cloud systems (23%);
- Using multiple public clouds simultaneously for different workloads (14%).
The following guidance gives you an overview of different starting points and a way forward using the best options to move to the cloud.
The starting point and cloud concerns
A couple of years ago, cloud was mostly not an option when it came to evaluation of new application and IT services. Companies more or less accepted high capital expenditures on their own on premises IT infrastructure such as servers, hardware, software, network, storage and additional costs on maintaining and upgrading the infrastructure. The resistance towards the cloud disappeared slowly due to the benefit of reduction of costs on IT infrastructure but also due to the increased security and improved services from the cloud providers. The idea of renting and paying on scalable subscription and fee basis became more popular also because vendors could provide a real benefit of economy of scale, IT expertise and a worldwide access through the internet. So we can see that the starting point was more IT driven and some business felt forced to the cloud or rushed ahead with their own cloud initiatives, which increased the “silo” thinking gap between IT and business. Later, hybrid cloud was being driven by IT and operations, whereas the public cloud was driven more by developers and business requirements.
Both IT and business understand the corporate goals, however, they have a different points of view because they have different roles. Nevertheless, it is crucial if both can incorporate the overall goals and achieve both IT and business benefits:
| Business View – Focus: | IT View – Focus: |
| Revenue growth | Improved business continuity |
| Profitability increase | Ensure availability, reliability and resiliency |
| Customer comes first | Cost Savings |
| Faster time to market deployment for new products and services | Increase transparency and transfer pricing of the IT costs |
| Support new business initiatives | Faster response to scalability requirements |
| Increase productivity | Benefit from new technology immediately without depending on rigid release cycles |
| Expand operations into new markets and regions across the world | Move IT staff faster to where they are more needed |
Many companies are struggling to match service delivery with the increased pressure for cloud use.
When looking at your IT landscape, IT must think like a business and go beyond traditional business partnerships. It is all about linking business to IT and IT to business. Without this cultural alignment, cloud projects will fail.
IT – Business alignment means finding the best solutions for a business transformation using different technologies and sourcing strategies. Not every application is worth moving to the cloud.
The question is: where do IT related capabilities provide the most business value when run “as a service”?
Business value amongst cost, flexibility, reassurance and volume is one thing. However, going to the cloud needs to consider the concerns about cloud computing such as
- security and privacy of company data
- quality and reliability of the cloud service provided
- doubts about true cost savings or overseen hidden costs
- cloud pricing structures must be simple and easy to understand
- performance and insufficient responsiveness over network such as internet reliability, bandwidth and latency risks
- difficulty integrating the cloud with on premises and the in house IT environment
- software compatibility
- overcome internal resistance
- handle compliance in regulated industries, i.e. finance and pharmaceutical companies
- managing legal and location risks, i.e. where is personal data stored?
- lack of cloud skills
From an IT perspective and taking for example a large international organization, you are driving the evolution of global IT infrastructure, managing data center modernization by executing consolidation programs with the target to have the right combination of cloud services and regional infrastructure. Projects for example can include deployment of collaboration platforms, workplace programs and a global network strategy including global IT security aspects.
The majority of large international organizations started their cloud journey some 20 years ago. A typical journey could look like in the following table.
| Year | Business Area | Cloud Adoption | Example |
| 2001 | ERP – single instance | ERP outsourced. Vendor managed cloud | Oracle Managed Cloud |
| 2006 | Middleware | Middleware outsourced. Vendor managed cloud | Oracle Managed Cloud |
| 2008 | Procure to Pay | Global procurement single SaaS instance | Ariba |
| 2009 | CRM | Global SaaS CRM | Salesforce (Service Cloud & Marketing Cloud) |
| 2012 | HRM | Global SaaS HR System, SaaS Talent Management | Workday, Taleo |
| 2015 | Core Systems | Global core system solutions as SaaS | Company specific |
| 2016 | Office | Office 365 SaaS | Microsoft |
| 2017 | Datacenters | Data center transformation program | Oracle Cloud Services |
One key thing in common is that cloud utilization increased over the years exponentially. This means that in the beginning of the journey, cloud usage was low whereas nowadays and in the future, cloud adoption will increase much stronger.