Are you fully harnessing the potential of the cloud? Cloud migration vs. cloud transformation
According to Gartner forecasts By the end of this year, global end-user spending on public cloud services will grow by 23.1 % to a total of $332.3 billion, up from $270 billion in 2020. This is just one of the indisputable proofs that cloud computing as a segment continues to grow. On the one hand, this is due to its undeniable advantages, the emergence of new services and technologieswhich take its use to a new level, on the one hand, and on the other hand, the societal situation and tendencies which, due to the pandemic, have accelerated its use.
If you too are considering moving to the cloud, or have even already taken the step, you need to remember one thing: the cloud is a means, not an end. This is exactly the statement that starts the popular article by McKinsey discussing what cloud transformation really means. In fact, as is increasingly being shown in practice, moving from a physical server to the cloud does not automatically mean its successful adoption or even transformation into a cloud enterprise. In fact, it is just one, albeit significant, element on the path to IT modernization in an organization.
"Just" migrating to the cloud is not enough
Many companies think that migrating to the cloud will automatically mean IT modernisation or even their successful digital transformation. However, this approach couldn't be further from the truth. In fact, it's very important to distinguish between a cloud migration, which merely ensures that your applications and other work tools running on-premises are moved to a cloud infrastructure (for example, migrating 100 on-premises physical servers to an AWS service without any application architectural changes). Modernization using the cloud occurs only when applications are the focus of the migration process. They are analysed individually, mapped to an equivalent cloud native service and rebuilt to run natively in cloud managed services (e.g. microservices architecture). However, these approaches fall short in many aspects of realizing the full potential that cloud computing offers.
In fact, the true adoption of cloud in an organization to drive IT modernization and digital transformation is tied to the organization's ability to successfully implement cloud computing capabilities across the entire organizational structure. Not only in the technology infrastructure, but also in the culture, business processes, products and services. Cloud transformation is not just a transformation of technology, but a transformation of the business as a whole. Your people, culture and processes play a critical role in making the biggest impact on your business.
In this context, the most important thing is to understand what you expect from the cloud in your company. Do you see it only as an incremental tool to improve flexibility and responsiveness to the business? Or do you see cloud computing as the potential and foundation of an enterprise-wide transformation that supports digital transformation, agile development, new product development, R&D collaboration and more? The illustration below from CloudSpectacor contrasts these two approaches very well - transformational (applied to the whole business) and incremental (narrowly applied within IT).
It is also clear from this illustration that the true and full value of the cloud will become apparent when the opportunities it offers are not just approached in a one-off manner, but when a holistic approach is taken, focused on IT modernisation and digital transformation. And while the cloud is not a prerequisite for many aspects of IT modernisation, acts as a force multiplier. Companies that see the possibilities of the cloud in this way can create next-generation IT that enables growth and innovation in a rapidly evolving digital era.
How to approach cloud transformation in your business?
It is clear from the above that cloud transformation can have significant benefits for the future of business, its competitiveness and ability to respond to technological and market changes. However, it also requires significant upfront investment and time. It is therefore important to approach cloud transformation strategically and consider many aspects. Company McKinsey lists 4 main aspectsthat you should consider in this regard:
RESOURCES AND BUDGET
Creating and maintaining your own portfolio of cloud services, unless you are a large multinational company, can be budget unsustainable. That's why in practice we use public cloud providers such as Microsoft Azure or AWS in most cases. These companies provide reliable, scalable services with a high level of security and stability, and they have a solid position in the market. Their use can significantly save resources and budget in the short and long term. They are constantly coming up with improvements or new services, such as serverless services.
CLOUD OPERATING MODEL
Unlike traditional operating models, the public cloud requires IT to manage infrastructure as code (IaC). This requires software engineers who understand the computing and security protocols of the public cloud (as opposed to network engineers or system administrators). For most enterprises, this means a massive upskilling of the infrastructure organization and the operating model in which they operate.
UPGRADING INFRASTRUCTURE
The applications you currently use in your company should be updated at the infrastructure and architecture level. On the one hand, they will be able to use the full potential of the cloud environment, on the other hand, they will also meet the security and capacity requirements of the cloud. It is therefore important to develop a clear strategy for upgrading legacy applications, by aligning the migration plan with major application upgrades or replacements and adopting basic solutions (such as API frameworks) to make remediation easier.
CULTIVATION OF SKILLS
Your IT experts within your development teams need to be able to develop applications in the cloud (specifically on the vendor's system) securely and quickly. To do this, companies will need to hire or train cloud experts.
How does cloud transformation accelerate your IT modernisation?
Migrating applications to the cloud alone will reduce your costs, but it won't provide you with real business value. All the technological innovations that are taking business to the next level, such as artificial intelligence, automation and digitisation, are often unavailable to legacy on-premise infrastructure. It is therefore really worth considering whether it is appropriate to focus on just one aspect of cloud capabilities when a business can gain a competitive advantage by harnessing the power of all these assets.
A true cloud transformation means that the cloud is not just a virtual place to host your applications, but a key enabler that influences your company's entire value chain (including business strategy or services). In this sense, it therefore goes beyond cloud incrementalism and builds the agility, speed and scalability of cloud computing into business and operational processes.
The attributes of a cloud transformational organization are strikingly different from those of a cloud incrementalized organization, although, as noted above, they are not mutually exclusive approaches. Both approaches share a basic requirement: the need for cloud leadership.
Moving to the cloud shouldn't be your end goal, you should see it as a tool to increase your company's productivity and ensure its continuity. And while the aspects to consider in this approach, such as budget, infrastructure upgrades, skills or operating model, may seem like insurmountable hurdles in many cases. With a partnerwhich has with cloud transformation experience they will be much easier to overcome and the value waiting at the finish line will be much higher than the actual cost.
He has translated his 20+ years of experience into a successful company that helps large companies transform into digital and agile enterprises.
Peter Stročka Managing Director of Aspecta