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How to get over your anxiety about the cloud

By adopting a more comprehensive strategy, one that sets ambitious goals and takes a cloud-first approach, IT departments and the companies they serve can capture a lot more value from the cloud. Photo: iStockphotoPremium
By adopting a more comprehensive strategy, one that sets ambitious goals and takes a cloud-first approach, IT departments and the companies they serve can capture a lot more value from the cloud. Photo: iStockphoto

In our work helping senior IT executives plan their cloud strategies, we find four big decisionsmade incorrectly or not at allthat tend to keep companies from getting the most out of the cloud

Microsoft, Amazon and Oracle believe India’s cloud opportunity is no walk in the clouds but very real indeed as companies change their business models and adapt to a digital world.

Yet, in India and the rest of the world, if everyone in business understands benefits of moving their IT workloads to the cloud—faster time to market, more flexible systems, streamlined application development and lower data centre costs—why are so many dragging their feet?

Bain’s recent survey of more than 400 companies, including leading global technology firms, found they put only about 18% of their workloads in the cloud today on average. The most serious ones aim to put about half their workload there—but even these leaders could run IT differently to get more savings from the cloud.

People hesitate in the face of big change, and executives are no different. Many put off a daunting task like shifting half their workload from traditional on-site servers to the cloud because they don’t have time to manage the change. Others worry about data security—though the record of breaches over the past few years suggests that data stored in the public cloud is at no greater risk than data stored on private servers.

Some companies move piecemeal into the cloud without a broader strategy for big savings: a business unit buys a SaaS application or an infrastructure group adopts a private or hybrid cloud solution.

A better way is to develop a more comprehensive picture of what’s possible by looking at the whole technology landscape, including current architecture, workload costs and future requirements. Then come up with a framework that identifies which workloads are most suitable for the cloud, taking into account unique industry constraints like security or other compliance issues.

Decisions, decisions, decisions

In our work helping senior IT executives plan their cloud strategies, we find four big decisions—made incorrectly or not at all—that tend to keep companies from getting the most out of the cloud.

(1) Public, private or hybrid? For some workloads—especially those with the restrictive compliance, security or internet protocol (IP) requirements—private clouds are the best option. But we find that private clouds deliver a fraction of the benefits of the public cloud, which offers bigger cost savings, greater flexibility, more scalability and better built-in services.

Until recently, IT executives were reluctant to adopt public clouds run by Amazon Web Services, Microsoft Corp. and Google Inc. But the double-digit growth of public clouds suggests customers are becoming more comfortable with these solutions as the vendors improve security, availability and flexibility, and as subscription fees continue to fall.

(2) IaaS, PaaS or SaaS? Some companies use basic infrastructure-as-a-service (IaaS) when a more complete platform-as-a-service (PaaS) solution could speed up the development and improve consistency.

Others overestimate the value of customized software when a more cost-effective and industry-standard software-as-a-service (SaaS) option could solve their problems. Enterprise architects and development leads need to update the ways they manage their application portfolios to make sure they look for the highest-value solution and treat cloud solutions as first-class options along with traditional software.

(3) Don’t hold back. The more you put in the cloud, the greater benefits you get. Some IT teams still think they’re the most capable candidates to run data centers, so they try to hold onto as much as they can. That might have been true 10 years ago, but the leading cloud providers have the scale to hire the top talent in security and cloud technology. Other companies make the mistake of looking only at short-term costs and don’t see the gains they need to justify the effort. They should look at long-term savings, too—like not having to expand data centres.

(4) Change how you work. No matter how much you put in the cloud, you will not see the full benefit unless you change the way you work. Our analysis suggests that as much as half the value of moving to the cloud lies in changes that a company makes in its IT operating model. For example, companies should give developers the freedom to requisition new resources online when they need them and to deploy code into production in a more streamlined way.

Development teams will take on some of the tasks that infrastructure teams once managed. IT will need to develop new roles to manage the cloud environment, and some employees will need to learn new skills or shift to different areas. IT may need to upgrade its capabilities in Agile software development and the project management to capture the cloud’s full value, and this will require changing existing processes to work well in the cloud. By adopting a more comprehensive strategy, one that sets ambitious goals and takes a cloud-first approach, IT departments and the companies they serve can capture a lot more value from the cloud.

Putting off the shift to the cloud only leaves companies further behind competitors and makes it harder to realize big financial benefits and attract top talent, which tends to prefer to work on the leading edge.

Arpan Sheth is a partner with Bain & Co.’s India office and the Asia-Pacific leader of Bain’s IT practice. Steve Berez is a Bain partner in Boston, where he leads the Americas IT practice. Bhanu Singh is a partner who leads the firm’s India Technology, Media and Telecom practice and co-leads Bain’s Global Capability Sourcing practice.

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