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Why move to the cloud — 3 catalysts and what they mean for your cloud strategy

Why move to the cloud — 3 catalysts and what they mean for your cloud strategy

Why move to the cloud? In truth, most companies don’t stop to answer this question. Cloud migration just sort of happens. Sometimes your cloud strategy kicks off because you need certain cloud technology solutions. Sometimes a single member of your management team pushes the whole business into cloud computing. Sometimes a move to the cloud means simply catching up with your competitors.

When you look a little deeper though, a cloud migration is most frequently triggered by one of three catalysts:

“I need to move to the cloud to have a predictable, OpEx-based technology cost model.”

“I need to move to the cloud so I always have the latest and greatest technology.”

“I need to move to the cloud so my business can be more agile.”

Identifying why your company wants to use the cloud will help you get everyone on the same page internally, so you can establish a shared language and purpose.


Most importantly, it will help you plan a smarter strategy that delivers the advantages of cloud computing your business really needs.


Organizations that do not have a high-level cloud computing strategy driven by their business strategy will significantly increase their risk of failure and wasted investment.

David W. Cearley
Vice President & Gartner Fellow, Gartner

Let’s look at each of these three catalysts in more detail...

“I need to move to the cloud to have a predictable, OpEx-based technology cost model”

Before we get started, let’s get one myth out of the way: Cost reduction is not a reason to move to the cloud. Cost control is. 

The cloud can help you save money, but the hype around the financial benefits of cloud computing is based on the bargain-basement pricing of cold data storage through companies like AWS, Google and Azure. Like a lot of what you’ll find in a bargain basement, the cheapest solutions are unlikely to fit. Base cloud solutions will work well for businesses that have simple processes and don’t need real-time, continuous access to their data and applications. The problem is, this use case is very rare for today’s dynamic businesses.

Cloud spending will happen. According to Dan Thompson, a Senior Analyst for 451 Research:


By the end of 2018, 68% of companies will operate in multi-cloud environments.


The key is making sure your spending is ROI positive.

What the cloud will do is give you more control over your costs. Moving to cloud computing lets you transition away from purchasing physical infrastructure and into spinning up virtual resources when and as needed. This subtle transition gets you out of capital expenditures, it lets you drop aging hardware, and it allows you to test new ideas and prepare for surges in demand without having to commit to long-term investments. That is, in a nutshell, cost control.

What you’ll hear your company say about the advantages of the cloud

When it’s a financial catalyst driving a move to the cloud, you can expect the CFO to be the first person explaining why to move to cloud computing. Companies moving to the cloud for financial reasons are almost always looking to transition from CapEx and to OpEx. Dropping the heavy upfront costs of acquiring infrastructure, plus its maintenance, has many benefits. It can open up cash flow, smooth the costs of technology investments, and increase the predictability of future resource planning. Moving to the cloud also gives businesses an opportunity to provision only the resources they need. Considering how often we find clients carrying 40 to 60 percent unused overhead, matching your infrastructure to your utilization can be enough to generate a baseline cost saving.


Companies often carry 40 to 60 percent of unused overhead.


When it’s not the CFO pushing for a move into the cloud, the CTO may be the one calling for finer controls over cost. Running systems on physical infrastructure requires the technology organization to order new hardware each time additional space is needed. This forces growth in leaps and results in plateaus. The tech team can’t temporarily provision resources to test out an idea, to prepare for an increase in traffic or to deliver a new environment to an expanding team. That means they can’t do their job. This is exactly how IT becomes the department of “no” — a reputation that leads to a rise in shadow IT. Moving software to the cloud means IT can spin up the environments they need when they are needed, then spin them down when they’re done. This flexibility allows them to do much more within a set operating budget.

Some organizations save money moving applications into the public cloud, others spend more money moving apps into the public cloud. The key to success is to drive cost transparency and accountability to the business.

David Mitchell Smith
Vice President & Gartner Fellow, Gartner

If the conversation in your organization does veer toward the cost benefits of cloud computing, make sure to reorient expectations early and often. Building a strategy around cutting costs runs the risk of cutting performance as well. There’s not a CEO around that will thank you for saving $20,000 a month when the entire infrastructure is down and customers are on the phone complaining. Keep your move to cloud services focused on cost control to decrease the risk of your cloud computing strategy prioritizing raw numbers over real benefits.

What this catalyst means for your cloud strategy

Once you know the end goal of cloud migration is the flexibility to buy only what you need, when you need it, you can start building a cloud migration strategy to get you there.

To start, we suggest looking at the oldest parts of your physical infrastructure. Identify the servers, firewalls, load balancers, switches, routers, storage appliances, etc. that are approaching or are already past the end of their lives, and move the applications, data, and traffic off of them first. These infrastructure components are likely the most expensive to maintain, even if they’re fully deprecated. Getting them out of your office, off your books, and out of your support queue requests, quickly, will show the economic benefits of cloud computing early in the process. 

Applying a cloud-first strategy has many compelling advantages not the least of which is freeing IT from the heavy burden of building and operating data centers.

Lisa Heneghan
Global Head of CIO Advisory at KPMG

As you identify your cloud requirements, consider how the elasticity of the architecture will help you control your costs. A hybrid cloud will let you keep less sensitive applications in the public cloud, where resources are cheaper, while keeping your most critical applications — and any  confidential data — in private clouds built to conform to your regulatory requirements and meet your RTO/RPO needs. Companies that regularly assess where applications and data need to live will find substantial cost savings by moving them accordingly. Your infrastructure, applications, and data will not be static in the cloud. 

Finally, make sure you’re working with a provider that will give you full visibility into how you’re using your cloud. Before you can control costs, you have to understand them. All too often the cloud migration occurs, and questions about cost aren’t asked until well after the first invoices are received. Maintain visibility at all times, so you can make the decisions about how best to balance your costs against your needs.

Simplifying health care billing had left Health Payment Systems with almost 200 percent growth — and a rack of servers that couldn't keep up. The team came to ServerCentral to build a flexible cloud infrastructure capable of supporting their rapid scale and global expansion in the most cost-efficient and controllable way.

From the jump, the entire ServerCentral team recognized that we wanted a business partner, not just a technology provider. We wanted someone who not only understood the ‘ilities’ we needed to operate our business: accessibility, scalability, and reliability — but someone who recognized the trust our payers, providers and customers put in us — and took that trust to heart.

Terry Rowinski
COO at Health Payment Systems

 

“I need to move to the cloud so I always have the latest and greatest technology”

Any conversation about technology is inherently a conversation about speed: what’s next, when is it shipping and how can I keep up? “How can I keep up” also answers why businesses should move to the cloud. The right cloud infrastructure will give you the speed it takes to keep pace with technological innovation, process innovation — and competitors. 

It’s not enough to think ‘cloud first.’ To derive significant competitive advantage from cloud, you need to think how you can leverage it to enable digital transformation, change how you do business, and disrupt your market.

Verizon 2016 Enterprise Cloud Report

Consider the cloud services themselves. It was companies like Google, Dropbox, and Salesforce that hooked us on speed in the first place. Their continuous iterations trained everyone to expect constant improvement, delivered directly to their devices on a daily basis. Your cloud infrastructure should enable you to operate in the same way — to take advantage of this — shipping your own products and services instantaneously.

What you’ll hear your company say about the advantages of the cloud

Often, conversations about the technological benefits of cloud computing start with a lament about how slow everything is now. As businesses grow, systems that once worked get tasked to their limits. The call for scalability can come from anywhere, from the COO to the CMO to anyone who’s working with software that can no longer keep up. When customers can’t instantly engage with your company, they can instantly click away — and engage with your competitors. 

When the Georgia Department of Health’s Coastal Health District needed a disaster recovery plan, they knew they had to not only deploy geographically dispersed and redundant cloud infrastructure, but also design and implement regular, comprehensive system and process testing. We worked with them to assess their current requirements, and then architect and deploy a solution to meet their technical and operational needs and provide the 24x7x365 support a state-sponsored health department demands.

At the end of the day, it was quite simple. We had to provide continuous technical and patient services to our communities. Period. As we are the first district to deploy a disaster recovery plan, we are setting the pace for the rest of the state. We could not have put in place our D/R plan, or set the pace for the other districts, without ServerCentral.”

Barry Flynn
Information Technology Manager at Coastal Health District

 

Speed isn’t just necessary for beating your competitors to market or providing the best support to your customers. Moving quickly and using the newest and best tools available has also become a requirement for attracting and retaining talent. The best minds want to work right on the bleeding edge of tech, where they can keep their skills sharpest. Moving your business to the cloud lets you get as close to that edge as you want to go, keeping the top talent needed to spur more innovation. Knowing you can connect to these third-party applications while maintaining control over security and meeting your organization’s compliance requirements makes this much more of a reality than ever before.

What this catalyst means for your cloud strategy

To truly take advantage of the cloud, businesses need to adapt. Too many companies fall into the trap of “cloud-washing,” simply picking up their applications and data and moving them from physical infrastructure to virtual. You’ll get a few cloud benefits that way, but not enough to stay competitive — and you certainly won’t be saving money.

Using cloud services is not enough. It’s the way you use cloud services that matters. You have to optimize your applications for cloud computing with the explicit purpose of getting the most value at the lowest effective cost.

Donna Scott
Vice President and Distinguished Analyst at Gartner

A business hoping to prioritize rapid technology improvements will look closely at which applications should move to the cloud, and whether they need to be re-architected. Getting companies ready to weather an unpredictable increase in traffic isn’t simply a matter of putting more cloud behind the application. It required looking closely at how it was built, then rewriting key application components and optimizing that architecture for the cloud.

The cloud is a tremendous technological shift. The cloud is also a tremendous business strategy shift. To realize all the benefits, the best companies will shift all aspects of their organization to work with cloud.

“I need to move to the cloud so my business can be more agile”

In some ways, every cloud computing benefit leads up to one thing — greater flexibility for your business to do what it wants, when it wants to. It’s hard, sometimes, to see infrastructure as strategic. After all, people don’t think of foundations being a crucial part of home design. Until, that is, they have to rip theirs up and replace it with something capable of supporting the layout they want. The cloud, when properly architected, delivers your organization a foundation that can morph into whatever shape you need, no matter where your business goes.


55% of CIOs cited improving agility and responsiveness as the reason they’re moving to the cloud, the #1 benefit in the Harvey Nash/KPMG survey.


With industries transforming overnight, adaptability has gone from a nice-to-have to a critical factor for business survival. A flexible infrastructure is the first step to making it a regular part of doing business.  

What you’ll hear your company say about the advantages of the cloud

“Can’t” is the death knell for any business looking to remain competitive. It causes talented people to leave, business extensions to get spiked and stasis to set in. It’s also wholly avoidable. A cloud transformation doesn’t just cause business processes to change — it causes the language and the culture to change, too. With a proper cloud infrastructure, “can’t” should be something you hear a lot less frequently.

A push to the cloud to increase flexibility usually starts with the IT team, or someone sick of hearing the IT team say “Here’s why we need cloud computing to do that” or, “We need to order more infrastructure to do that.” For the IT team to do its job, they need to be able to support dynamic business goals with technology — and to do so without being tied up by procurement and other processes. 

Health Payment Systems came to ServerCentral on the heels of almost 200 percent growth. The company was seeing excellent results in the market, but struggling to stay nimble with an increasing — and increasingly global — workforce. By helping them transition to the cloud, we gave HPS the always-on support it needed to switch to an agile process of three-week sprints, preparing the team for even greater growth. 

The quality of work across the entire organization dramatically increased. The ability to focus and execute on clearly defined objectives made everyone’s lives easier while improving our ability to operate the business.

Terry Rowinski
Health Payment System’s COO

 

With cloud, you don’t need CapEx outlays to provision resources, nor do you need to spend time worrying about the (cost, technical and political) implications of standing up a new instance. The right cloud partner can help architect your infrastructure so that IT spin up and spin down resources as needed, all within the structure of the approved IT OpEx budget. Instead of wasting time on planning, budgeting and approvals, you can get to work supporting innovation, no matter where it takes the business.

What this catalyst means for your cloud strategy

Building a cloud infrastructure that delivers the desired levels of flexibility means keeping things light — in both your systems and your organization. A hybrid cloud will give you the most comprehensive set of options for where applications and data can live. Depending on their specific requirements, your tools can live in a public cloud, a private cloud, or across both. This prevents the need to re-factor, re-architect, or re-write applications just to move them to the cloud — saving time and money during your cloud migration. 


69% of IT leaders have used cloud to reengineer business process, according to the Verizon 2016 Enterprise Cloud Report.


There will be times when re-factoring, re-architecting or re-writing applications does offer enough of an advantage to make it worthwhile, however. When that does happen, a hybrid environment will enable you to develop a fully optimized cloud infrastructure at a pace that meets your technical and financial requirements, instead of forcing you to upgrade systems all in one go.

As you plan your cloud strategy, keep an eye on the long-term goals. To adapt to new business directives at the drop of a hat, you likely need to reexamine how things work and change systems and processes to match current best practices. Re-factoring, re-architecting, and even re-writing, can be made easier, but it usually can’t be put off forever.

So we’ll ask again, why move to the cloud? Even when your answer changes dramatically, a successful cloud strategy, with right-sized cloud infrastructure gives you the flexibility to make it happen.

How to get the right benefits of moving to the cloud

A successful cloud migration starts with an honest, shared understanding of what cloud computing benefits your company needs most. Whether it’s controlling costs, keeping up with technology or preparing for an ever-changing future, subtle shifts in how you move to the cloud will maximize the rewards.

Before you get started, speak with, and listen closely to, your colleagues. The way they talk about cloud will give you clues about what they’re hoping to achieve. Once you know everyone’s goals, you can then build a cloud strategy to achieve them.


20% of CIOs said making the business case was a barrier to cloud migration in the 2016 Harvey Nash/KPMG CIO survey.


Listening to your colleagues and developing a cloud migration strategy to suit the business needs will move that roadblock from your path.

Want help navigating the path to cloud? Let us know what your cloud catalyst is, and we’ll lay out the steps your migration will take.

  • I need to move to the cloud to have a predictable, OpEx-based technology cost model
  • I need to move to the cloud so I always have the latest and greatest technology
  • I need to move to the cloud so my business can be more agile
  • I need help figuring out why to move to the cloud
  • I need to figure out how I’ll meet my compliance requirements in the cloud

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Topics: Cloud