There’s no getting around the fact that cloud migration is an ambitious endeavor. A report from Velostrata and Dimensional Research offers some intimidating specifics, noting that 43% of migrations will take more than two years to complete and 55% of survey respondents exceeded their budgets. There’s also no guarantee the effort pays off, and 62% of migrations are either more difficult than anticipated or they fail outright. Despite the obstacles, however, migration to the cloud is almost universal.
In 2013, Forrester research indicated some 12% of North American enterprises were utilizing a public cloud platform. That percentage increased five-fold in just five years, and cloud adoption today—whether public, private, or hybrid—is nearly ubiquitous. According to a 2020 O’Reilly survey, a mere 10% of respondents are still operating without any cloud solutions, and we can expect that number to recede even further over the next few years.
Even before the pandemic, there was good reason to move key business functions to the cloud. The cloud enables easy access to files and applications from anywhere and at any time, empowering workplace flexibility and facilitating collaboration for global teams. Cloud services are also easily ramped up or down, offering granular budget control for businesses that might be experiencing disruptions and the ability to scale rapidly for those that are in the midst of explosive growth. Add in the potential savings over on-premise infrastructure and improvements to reliability and security, and cloud adoption, with all its difficulties, seems like an obvious choice. Let’s take a closer look at some of those benefits.
1. Remote work capabilities
During the COVID crisis, perhaps the most obvious advantage enjoyed by cloud-ready companies was an easy transition to remote work. Operating in the cloud means employees can access documents, communication platforms, and other important applications from anywhere with a reliable internet connection. This capability was critical during the pandemic, and research shows that it will remain important—vaccine or not.
Employees who might have spent their entire careers commuting to work quickly became accustomed to the benefits of the home office. A Gartner survey of executives about their post-COVID intentions demonstrated that 82% plan to allow workers to continue remotely at least some of the time, and 32% of companies are electing to replace full-time employees with contingent workers in an effort to cut costs and stretch budgets. With the ability to hire remote workers, companies tap into a talent pool that’s vastly larger than the one in their geographic region.
2. Unparalleled agility
Expanding on-premise infrastructure requires a substantial investment. The costs of real estate to house equipment, the hardware itself, and the personnel needed to install and maintain systems quickly add up, and all these expenses yield a system with a useful shelf life of just five to seven years. Besides the upfront financial cost, it also takes time to put these systems in place, creating an unavoidable delay between the decision to expand and the result.
Once an organization has migrated to the cloud, there are almost no hurdles to expanding systems, and McAfee’s 2019 Cloud and Risk Adoption Report points out that cloud services increase business acceleration for 87% of companies. With the increased agility offered by the cloud, organizations aren’t simply better equipped to serve existing customers—they can capture business in new markets faster than ever.
3. Equal or greater security
Historically, security has been one of the biggest concerns for organizations considering cloud adoption, and most decision-makers felt that on-premise infrastructure provided superior control and thus a more secure solution. In recent years, that gap has narrowed, and McAfee’s 2019 Cloud and Risk Adoption Report illustrated that 52% of organizations felt the cloud offered superior security when compared to on-premise IT environments. While that figure represents significant progress, the new cloud security paradigm doesn’t mean adoption can occur risk free.
In a July 2020 McKinsey Quarterly article, “Three actions CEOs can take to get value from cloud computing,” the firm argues that “CEOs should insist on a pragmatic risk appetite that reflects the business strategy, while placing the risks of cloud computing in the context of the existing risks of on-premises computing…” Focusing exclusively on the risks that accompany cloud adoption can stymie progress, which is why a holistic view that includes the existing risks of on-premise architecture is critical.
4. Potential cost reductions
According to the McKinsey Enterprise Cloud Infrastructure Survey, private cloud migration offered an average of 10-20% savings over legacy systems, while public cloud adopters saw a savings between 20 and 30%. Some of the savings opportunities offered by the cloud are obvious: there are no upfront hardware purchases, expensive upgrades to increase capacity, or salaried technicians needed to install and maintain those on-premise systems. Other indirect reductions in cost can be just as profound.
Picture a call center that fields a high volume of calls from 10-11:30am, a slower period from lunch through early afternoon, and another ramp-up from 3-6pm. If the call center is a physical one staffed by commuters, the company incurs the same cost even during periods where less work is required. If employees telecommute and handle calls using a cloud application, surplus staff can log out during the quiet period and log back in when demand increases. This is just one example of how the flexibility and agility of the cloud can save money in creative ways.
Virtually all industries are leaning into the cloud, but our experience at Voyage Advisory centers around customer care. From Contact Center as a Service (CCaaS) deployments to analytics applications that allow for more personalized customer experiences, the cloud offers a wealth of opportunity in the customer service space, and the organizations that embrace it frequently see returns that far outstrip those gleaned from other initiatives.
Cloud adoption is an investment. As such, it requires organizations to prioritize the construction of a future-proof infrastructure over new products and features that mire the business deeper in technical debt. While migration to the cloud currently offers significant competitive advantages including a faster time to market, improved customer experiences, potential cost reductions over legacy systems, and more, a time will come when cloud infrastructure is a simply a baseline for businesses in all kinds of industries. In other words, the companies that delay migration do so at their own very real risk.
If you would like to discuss applying these insights to your context, let’s connect. I’m active on LinkedIn or you can reach my office at 920.691.6440 or email email@example.com.