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Cloud is a fundamental part of the 21st century organisation. It allows executives to fully unlock the power of the “Matrix” – the combination of cloud platforms and machine intelligence creating an advanced real-time sensing, deciding, acting, dynamic system that powers their products, interacts with their customers, and manages risk for their business.
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Therefore, cloud services are inevitable, and those companies not already well on the way to transforming to unlock the value the cloud offers are going to quickly find themselves disrupted and at a disadvantage.
The cloud for startups is an obvious choice. For established enterprise businesses, the problem instantly gets more complex.
Creating new digital services on cloud platforms is a common use, as is burst compute requirements. We also see a handful of software as a service (SaaS) platforms being very successful. But the existing core business systems are yet to start moving to cloud-based services, and it’s these where an incredible amount of value lies.
That value comes not just in benefiting from the economics of the cloud, but also the operational efficiency of running in the cloud, the agility benefits, access to new innovation the cloud providers are creating almost daily, and the ability to focus on core business-differentiating activities.
So what’s holding CIOs back from mass cloud migration for core IT? The constraints can be summarised into two areas – risk and commercial issues.
- Security: perceived insecurity of cloud platforms; the need for new security approaches.
- Resilience: the cloud goes down, how do I meet my service level agreements when it’s out of my hands?
- Reputation: will my customers trust me if I hold their data on a cloud platform?
- Regulatory: what is the regulatory position?
- Financial: the swing from capital to operational expenditure is easier said than done.
- Licensing: I use commercial off-the-shelf software, can I run that in the cloud?
- Talent: I need people with new skills, but where do I get them?
A combination of the above issues is causing inertia when executives are making the decision to move to public cloud. We’ve been discussing these issues with our customers, and interestingly a new area of concern is now present – political issues.
The most successful cloud organisations are North American businesses, and yet we are in a period of political uncertainty and volatility. Could this have an impact on our ability to consume cloud? Time will only tell, but it’s absolutely a risk we need to be aware of.
Read more opinion from the Leading Edge Forum
- Organisations have not changed sufficiently from 20th century operating models – but successful companies have developed a new outlook.
- Machine intelligence is improving fast and IT leaders need to plan for its effect on enterprise IT.
- Developing employees to embrace a digital-first approach can bring significant personal and organisational benefits.
The cloud has been seen as a silver bullet and organisations have seen it as a direct route to instantly save cost. But with existing core IT systems, this simply isn’t the case.
For the most part, the cost is incremental until you can deal with your existing assets, service agreements and transform your legacy skills. This normally takes years, not days.
But does this mean you should ignore cloud for your existing systems? Absolutely not. You have to have a transformation strategy and data that shows you when best to start moving and modernising your systems. It’s a long game, but one that we should all be playing.