The cloud is a means, not an end. Success in modernizing IT through the cloud is driven by a complete standardization and automation strategy.
Cloud-computing adoption has been increasing rapidly, with cloud-specific spending expected to grow at more than six times the rate of general IT spending through 2020. While large organizations have successfully implemented specific software-as-a-service (SaaS) solutions or adopted a cloud-first strategy for new systems, many are struggling to get the full value of moving the bulk of their enterprise systems to the cloud.
This is because companies tend to fall into the trap of confusing simply moving IT systems to the cloud with the transformational strategy needed to get the full value of the cloud. Just taking legacy applications and moving them to the cloud—“lift-and-shift”—will not automatically yield the benefits that cloud infrastructure and systems can provide. In fact, in some cases, that approach can result in IT architectures that are more complex, cumbersome, and costly than before.
The full value of cloud comes from approaching these options not as one-off tactical decisions but as part of a holistic strategy to pursue digital transformation. Such a strategy is enabled by the standardization and automation of the IT environment through an open API model, adopting a modern security posture, working in an automated agile operating model, and leveraging new capabilities to drive innovative business solutions. While cloud is not a prerequisite for any of these features, it does act as a force multiplier. Companies that view cloud capabilities in this way can create a next-generation IT capable of enabling business growth and innovation in the rapidly evolving digital era.
Lift-and-shift is not enough
Cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud appeal to many organizations because of their stated features: pay-per-use, ability to scale up or down based on usage, high resiliency, self-service, etc. All these benefits are expected to lead to much lower IT costs, faster time-to-market and better service quality compared with traditional IT offerings.
However, traditional enterprises run into two major issues when moving to cloud:
- The existing business applications were created using the traditional IT paradigm. As a result, these applications are typically monolithic and configured for fixed/static capacity in a few data centers. Simply moving them to the cloud will not magically endow them with all the dynamic features of the cloud.
- The typical technology workforce of an enterprise is well versed in developing business applications in the traditional IT framework. Most of them need to be reskilled or upskilled for the cloud environment.
IT security is a good example. Most traditional IT environments adopt a perimeter-based, “castles and moats” approach to security, whereas cloud environments are more like modern hotels, where a keycard allows access to certain floors and rooms. Unless the legacy applications that have been developed and deployed for a castles-and-moats security model are reconfigured for the new security model, migrating to the cloud may have an adverse impact on cybersecurity.<a "="" rel="#footnote2">2
Enterprises have been successful in adopting SaaS solutions mainly because SaaS addresses these constraints in a simple fashion: they replace the existing business applications and leave the development of new features to the SaaS provider. SaaS solutions have therefore become very popular for business functions such as marketing and sales, back office (HR), and communication and collaboration. However, in most sectors, there are no mature SaaS solutions for core business functions such as billing for the utilities sector and core/online banking for financial services.
As a result, despite overall increased cloud investment, enterprise cloud adoption is maturing slowly.<a "="" rel="#footnote3">3 Many enterprises are stuck supporting both their inefficient traditional data-center environments and inadequately planned cloud implementations that may not be as easy to manage or as affordable as they imagined. While some forward- thinking companies have been able to pursue advanced enterprise cloud implementations, the average enterprise has achieved less than 20 percent public or private cloud adoption (Exhibit 1).
