Given that some form of cloud service has been around for close to two decades, it’s easy to think that any company that wanted to use the cloud is already doing so. However, that is not the case. There are still organizations that have decided not to have a cloud instance. True, their IT departments might have set up some cloud space for testing purposes or for keeping their own skills sharp and up-to-date; but as an organization, they may not have made the business decision to migrate to the cloud.
This begs the question, why not? What are some of the reasons a modern organization has not moved the bulk of their services to the cloud? Turns out there are several reasons. These reasons can vary and one of them might depend on the type of industry they support.
Security Concerns
Some organizations have a concern over the security of the cloud providers. For example, financial services firms such as banks or investment funds, may choose to not fully engage with the cloud until their level of trust in the security components is fully realized. In 2019, a major U.S.-based financial institution was hacked at a cost of 100 million customers losing their data, as well as significant fines from the U.S. banking regulators and a $190 million class action settlement.1 The cost to their reputation and marketing strength will probably never be fully realized.
A breach like this will cause many companies, especially financial services firms, to rethink their own cloud implementation. If an executive or board of directors was hesitant about moving to the cloud due to security or other concerns, a breach like this will only reinforce the negative view of the cloud.
Cost Concerns
Another reason is cost. Organizations will decide to migrate to the cloud to reduce their data center costs. True, not having to deal with real estate, building maintenance, heating & cooling systems, etc. does reduce some costs, but the cloud is not “free.” There is still a cost associated with it. Which leads to another common factor – surprise bills. If not carefully policed, companies might find themselves budgeting for a certain amount, for example, $50,000 a month, then getting a bill from their cloud provider for $75,000 or more for one month. This is a modest example — there have been instances where companies receive bills that are millions of dollars over their estimated usage budget. In 2019, popular scrapbooking website found itself with a $20 million overage for their budget year due to unexpected costs associated with its cloud usage.2 More recently, Anadot’s State of the Cloud for 2022 report showed that a little over a third (37%) of IT executives have been caught off guard by surprise bills or costs of their cloud services.3
What this means for CIOs is that they take a thorough review prior to moving to the cloud, not just because they are concerned about their company and the spend, but as we can imagine, it could be a career-ending move if they’ve presented to the board of directors that moving to the cloud is a cost savings only to get some surprise bills that are significantly over their allotted budget. This makes the cloud a big-ticket item and not a cost saving item.
Complexity and Fear of the Unknown
While simple in concept, and what might appear to be a “no brainer” to move to the cloud, the fact is, once the migration begins, it can be overwhelming. Think about it from this perspective. How much effort is it to build a data center from scratch? Once the building and the power requirements are all completed, then how much effort is it to install racks, servers, wiring, etc.? It’s a lot of effort and not something that will happen over a weekend. Guaranteed, there will be a lot of planning meetings, review meetings, Gant charts, budget reviews and numerous other activities to ensure that the data center is fit for purpose. Then there is the matter of operating the data center after the move-in.
Moving completely to the cloud takes a similar amount of effort, minus having to physically build or manage a data center location. Servers must be commissioned, network switches and wiring must be installed as well as tested, and proven security measures such as firewalls, etc. all must be installed and commissioned. True, many of these are virtual machines and are part of Infrastructure as a Service (IaaS) or a Platform as a Service (PaaS) where all these assets are technically virtual and not physical. But the design work, the architectural solutioning, the configuring and build of each of these devices still must take place prior to putting them in service. Once implemented and operational, the systems must be supported on a regular basis. Add in newer technologies like Containers, Serverless functions, and Edge computing to name a few, and the complexity and lack of knowledge or skills on the part of internal employees starts to add up to an overwhelming initiative.
Choosing a Cloud Provider
In some instances, the reason for not moving to the cloud is analysis paralysis. The paralysis could be for opposing reasons. Some IT leaders might feel that there are too many choices: how do I pick the right one? Others might feel that there are not enough choices and are not sure which of the three major providers to select.
Most people know about Amazon Web Services, Google Cloud Platform, and Microsoft Azure. Which is the best? Each one has its own plusses and minuses. Gartner did a study and found that many of the major cloud providers were neck-to-neck when it comes to 11 different areas of review. So, in choosing a cloud provider, you’ll want to review the areas that are important to your specific business requirements and then select the provider that best fits those needs. While one cloud provider may score the highest overall, that provider might not score the highest in the area that matters the most to your organization.
Source: https://www.gartner.com/peer-insights/home
Moving to the Cloud Despite Our Fears
So then, how do we overcome these obstacles? The easy answer is patience and a detailed business analysis. Compare moving to the cloud to buying a custom-built home on a piece of property you may have purchased. What does it take to build that house? First, the land must be plotted and analyzed. Is it in a flood zone, does the plot of land need compacting prior to putting in the foundation? What about water and sewer services? This and more must be considered prior to delivery of the materials and the carpenters showing up. What do most individuals do? They hire knowledgeable individuals who specialize in building custom homes.
Moving to the cloud is no different. Highly skilled and well-trained in-house IT engineers with a knack for understanding business requirements can manage the fact finding and requirements gathering prior to moving to the cloud. Conversely, hiring knowledgeable individuals, preferably a team of folks who are cloud-agnostic and not beholden to a specific cloud provider can steer you in the right direction when it comes to designing and building out your cloud requirements. Like a good architect who will examine how you live, how your household functions, and the desires of each of the different family members who will live in your custom home, a trusted set of consultants will do the same. They will review your business requirements, examine the impact to the business and how the cloud will be used. They will also review your usage and design in the cost optimization features needed to make sure your new cloud environment will not bust your budget when it goes live.
The key is, no matter who you use, they will need to understand your business reasons for moving to the cloud and the business reasons for choosing the applications that will migrate first. Why the business reasons? Because this is the real agenda and motive for moving to the cloud. While we all love the latest gadgets and toys, the fact is, the business motives should drive the migration, not the technical “gee whiz” factors. Every leader on the project should be able to answer the question, “Why are we moving to the cloud?” in very clear business terms. An excellent answer might be “To scale our applications when needed and at the same time, optimize our costs.” The wrong answer is, “Because it has some cool features!”.
What’s Next?
Lastly, the more planning that happens up front, the better the outcome. Like that house, what would it look like if we ran up to the local hardware store, bought a bunch of lumber, brought it out to the property and started putting a house together? How would that house compare to one where the land was properly prepared, the plans were drawn up, reviewed, checked to see if the family would enjoy it, then once all the permits were in place, started the build? The latter home would no doubt be a nicer place to live and better fit our needs.
In spite of our fears, moving to the cloud can resolve a lot of our IT operational issues. The Cloud environment has matured rapidly over the years and the vendors have put a lot of effort into eliminating many of the reasons why people choose not to move to the cloud. A recent Gartner study shows that 51% of IT spending will shift to the cloud, which is an increase from 41% in 2022.4 Why the increased spending? The major advantage to a well architected cloud environment is the ability to scale in size to the needs of their business units and their respective consumers. The ability to scale your storage and processing power instantly when needed is powerful incentive over a crashed website. Gartner stated, “Technology and service providers that fail to adapt to the pace of cloud shift face increasing risk of becoming obsolete or, at best, being relegated to low-growth markets.” IT departments and other technology providers that want to remain relevant will need to move at a pace that only a well-designed cloud instance can provide.
So, how do you move to the cloud, yet eliminate your concerns? Start by having clear business reasons for moving to the cloud, whether those reasons are cost savings, scalability or speed. Second, have the right people in place — either in house or experienced consultants. Third, have the patience to properly plan the migration and the build out of your new cloud environment. This careful planning should prioritize the area of most concern. For example, if your organization is highly concerned with security, then the planning should cover threat modeling and vulnerability assessments during the code build instead of after the code is completed, effectively baking in your security. Overall if you take your time and plan thoroughly, your experience will be more satisfying and less expensive than a company that simply decides to move to the cloud without proper planning.
This planning will allow you to overcome the fears associated with security breaches, the costs of the migration and your operational costs; allowing you to rest assured that your new cloud environment will fit your business needs.
Contact us to see how our Cloud and Infrastructure team can support your business goals.
Sources
1. https://www.capitalone.com/digital/facts2019/
2. https://www.theinformation.com/articles/as-aws-use-soars-companies-surprised-by-cloud-bills (email or subscription required)
