I’ve stopped thinking of simple migration to the public clouds as “success.”
Yes, businesses do benefit. You decrease operational costs by a certain amount, if you plan correctly, and you certainly increase the convenience of not having to deal with hardware and software. But all that gets you to just 10 to 20 percent in savings.
And that savings has a big price tag: Migration projects are very labor-intensive, and they often run into issues such as internal politics, cost overruns, and compliance issues as you’re looking to drive platform changes.
Moreover, you have to consider the cost of risk. If you bother to calculate it, the risk is high considering the issues I just mentioned, and that could remove any benefit gained for at least a few years.
Of course, I am not arguing against migration to the cloud. But mot enterprises need to think more deeply as to why they are migrating to the cloud, and then how.
Unfortunately, most enterprises consider cloud to be a tactical technology, and the CFOs and CEOs are glad to see the cost reductions. But if the use of cloud computing is not transformative to the core business, it’s really not providing you the ROI you seek.
“Transformative” means that you leverage the innovation and disruption that cloud computing provides. For example, a car company that can remove all friction from its supply chain by using cloud-based technologies, or a bank that can finally use its systems to gain access to key customer data that lets it provide better products and increase market share.
These are tricks we’ve done with technology for years, but the cloud removes much of the complexity and cost from having to on-board these technologies with traditional mechanisms. For exmple, in the cloud, you can access—within a few hours or even a few minutes—machine learning technology and advanced analytics, as well as databases that can store many petabytes.
The agility aspect of cloud computing is another clear benefit that most enterprises don’t consider, but it’s a key reason why many businesses remain with the cloud.
The transformative nature of this technology makes it an effective weapon for owning your market. Doesn’t that sound better than a 10 to 20 percent cost reduction?