Open for business: Enterprise cloud solution adoption continues unabated

Group Vice President for Analytics and Information Management, IDC
Vice President, SaaS & Cloud Services, IDC

How do we provide on-demand access to all our business services? How do we build social, mobile, and analytics capabilities into our apps? How do we expose our siloed back-office solutions and data so they operate like an information hub? These are just a few questions frequently heard by IDC analysts tracking our clients' cloud computing efforts. When it comes to cloud deployments of analytics and information management (AIM) technology, it is no longer a question of why to adopt cloud solutions but rather when and how. Today's modern cloud solutions are open for business—open for your data and open for your applications.

Today, very few CIOs hide behind the excuse of lax security as a reason to avoid cloud solutions. At a recent Chief Data Officers conference, we spoke with several financial services industry executives. While they noted that some of their data assets can't move to the cloud because of regulation, all were keen to see those particular aspects of regulation relaxed, and none felt that security was a primary issue in migrating to the cloud.

According to IDC's annual CloudView Survey, 43 percent of organizations expect that within five years, the majority of their IT capability will be delivered through public cloud services. Are all cloud deployments going to be effortless? No. Will they always require a wholesale migration of databases and applications to the cloud? No again. But it is an inevitable trend. For example, based on IDC's forecast models, we expect that by 2018 at least half of IT spending will be cloud-based.

The trend toward cloud adoption has already been shown to be effective in raising efficiency and productivity for AIM technology management. At organizations experiencing positive results, IT departments are focused on procurement and consistent service delivery to ensure more predictable expenditures and to create a balance between capacity purchased and actually used.

While these IT benefits are important, they are a means to an end. IDC sees a trend where companies are adopting various cloud solutions for more strategic reasons, not just IT cost savings or efficiency. It’s not sufficient to look at cloud solutions just for tactical reasons. Organizations need to look at cloud solutions to increase their agility in responding to customer needs and external market factors, and to drive innovation to spur digital transformation.

The lifecycle of application workloads—developing, building, refining, and managing—is the major lens through which most IT organizations see the best opportunities for cloud. Many organizations (more than 60 percent in IDC's CloudView Survey) have taken a cloud-first approach to sourcing net-new applications but are struggling with plans for existing IT assets and processes.

For the vast majority of currently established organizations, some IT capabilities will be on-premises and some will be in the cloud or multiple clouds. This hybrid architecture will continue to dominate enterprise cloud strategies. In this environment, the need to integrate traditional on-premises systems with cloud infrastructure and cloud-native applications will create friction and operational challenges across many IT organizations.

Another consideration is the broader choice of data management options that have, in recent years, expanded from relational databases to a range of NoSQL databases and Hadoop. Yet another is a growing need to integrate internal customer, operational, and financial data with external data sources—some from open data initiatives and some from commercial sources. In a recent IDC study of 500 organizations, 67 percent said that they currently purchase or subscribe to external data. The result is a need for robust enterprise-grade cloud solutions, including monitoring and management tools that will help IT take on a more strategic role.

Much of the challenge in articulating a cloud transition strategy is the lack of an objective framework and prescriptive guidance on how to do it. IDC suggests that companies assess the value first. The value dimension is a pure business discussion, and it starts by asking some simple questions:

  • What is the specific value to be gained from continuing to operate this service whether a Web site, Web catalogue, customer campaign, data management technology, or analytic application?
  • If there's true value to the application or service, then is there also specific value derived from running it locally in the datacenter?
  • How would we benefit if we adopted a cloud solution in any of its various forms?
  • To what extent do we need to re-write or modify existing applications that are deeply embedded with internal data stored on-premises?

These questions are worth asking and re-asking at every juncture in the context of what business value is being sought. With rising competition and pressure on the bottom line, CIOs are feeling the heat from the business to innovate more quickly as a way of boosting revenue and profit.

Some IT groups that have not risen to the challenge and find themselves in environments where there is a growing schism between rising LOB demand and relatively static IT service supply capability. This has led to a standoff where LOB executives are going outside the business for cloud solutions. While these efforts may fulfil individual constituent’s immediate needs, they expose the organization to inefficiency and risks by proliferating a siloed approach to data and application management.

LOB managers want a say in how and what IT is delivering to their users. There is no question that self-service is a real and enduring trend. But the 'bring your own data' and 'bring your own software' effort must be coordinated—a perfect opportunity for a CIO or a CDO to take on a new strategic role.


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