Craig Thomson, Senior Vice President Strategy, Capability and Portfolio at SoftwareOne shares the best practices for Cloud migration
More than half of enterprise IT spending in key market segments will shift to the public Cloud by 2025, according to Gartner.
That’s huge news, bringing with it opportunity and challenge in equal measure:
- The opportunity: maximising value and driving innovation
- The challenge: seizing this opportunity while keeping costs under control
SoftwareOne wanted to find out exactly how the most successful enterprises are maximising the impact of cloud transformation to drive ROI.
Our research among 300 senior technology executives revealed that, as companies become more adept at using Cloud technologies, they not only reduce costs. They also see significant revenue growth. This isn’t just about adopting new technology. It’s about fundamentally reshaping their business operations.
All of which could give you actionable insights to enhance your own cloud ROI—regardless of your current adoption stage.
Rising benefits, falling costs
According to the research, organisations just starting their Cloud migration—Cloud beginners—invest 1.3% of their revenue on the Cloud, while those well-advanced—Cloud leaders—invest just 1.1% of revenue.
While beginners report a 19% decrease in overall business costs, those savings grow to 25% as they become Cloud leaders.
Revenue follows a similar trajectory. One-quarter of Cloud beginners enjoy a bounce in revenue, and that percentage leaps to 48% as these companies morph into Cloud leaders. Other benefits from Cloud usage include a greater ability to scale their businesses, increased resilience and agility, improved market competitiveness, and customer retention.
In two years, as companies advance in Cloud usage, the percentage of mid-sized enterprises experiencing these benefits is expected to climb: 56% expect to increase revenue; 53%, to reduce costs; 49%, to scale their business; 47%, to improve resilience and agility; and 46%, to improve competitiveness.
Despite a slow start, mid-size enterprises are accelerating Cloud transformation to ensure they are not left behind. Most companies surveyed started their Cloud migration within the last two to four years but now have 37% of their applications operating in the Cloud. These organisations plan to take that percentage to 48% within two years. They have migrated about four major business activities, which should rise to five over the next two years.
Six best practices to optimise Cloud usage
Of course, transitioning to the Cloud can be complex. It often presents a maze of technology and business challenges that executives must navigate. The most common barriers are ensuring data security and privacy, selecting the right providers and tools, and maintaining service during Cloud migration. Other pain points include coping with technical debt, tracking and controlling costs, and lacking a proper organisational foundation.
To overcome these impediments and optimise cloud results, mid-market companies should consider six best practices uncovered by the SoftwareOne research:
- Actively manage Cloud costs using best practices and tools such as Cloud financial management (FinOps) to create a culture of accountability
- Focus on business goals rather than the technology side of Cloud transformation to ensure that decisions are made for the right reasons and produce the desired results
- Take a structured approach to decisions about shifting and modernising applications that focus on business imperatives and set the correct priorities
- Develop the culture and talent to succeed in the Cloud by creating a Cloud centre of excellence to provide training and advice. This ensures proper Cloud governance and standard processes and foster wide adoption of Cloud best practices
- Select the right tools and partners, using various Cloud service models and turning to a range of Cloud technology partners to bridge the skills gap as needed
- Put cybersecurity at the centre of Cloud migration plans, assess and improve application cybersecurity before migration, and ensure that the technology team has Cloud security expertise
Ready for cloud-driven ROI?
If you have one key takeaway, it should be that Cloud migration isn’t just about technology. It’s about fundamentally reshaping your business for the digital age.
Take a longer look at the research for yourself—and consider the specific opportunities and challenges for your business. The research shows that Cloud leaders really can realise dramatic improvements in both cost savings and revenue growth. But achieving such results requires more than just migration: it demands a strategic approach to Cloud adoption, and culture transformation.
Author: Craig Thomson, Senior Vice President Strategy, Capability and Portfolio at SoftwareOne
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