When Digital Transformation Polarizes the Organization
Part Two of Four: A Shift to the Cloud or Violent Storm?
By Kurt Jonckheer
Chief Executive Officer
The rise of the cloud has changed the face of Big Data. It’s also changed the way modern enterprises run their businesses.
These changes have been anything but easy, and they aren’t anywhere near complete. In fact, whether it’s through a lift-and-shift migration or a complete re-architecting, almost every modern enterprise today is managing a hybrid—usually a multi-cloud—Big Data environment.
The problem? The shift to a hybrid environment has created a severe cost crisis. When enterprise IT organizations get their first few cloud bills, many are shocked. Isn’t the move to the cloud supposed to save money instead of add more costs?
A study by Bain & Company asked more than 350 IT decision-makers what aspects of their cloud deployment had been the most disappointing. The top complaint was that cost of ownership hadn’t declined. It had remained the same or, in some cases, even increased.
Additional findings showed:
- Poorly planned direct-match migration to the public cloud can cost 10% to 15% more than keeping workloads on-premise, leaving many companies disappointed and frustrated.
- 84% of workloads on-premise are overprovisioned; when companies migrate a workload to the cloud, they often send excess capacity along with it.
- Companies that “rightsize” their workloads to eliminate overprovisioning can cut costs by as much as 30% to 60%.
- Rightsizing creates opportunities for vendors as well—to help their customers scale, automate and operate via public, private and hybrid cloud models.
Gartner also estimated that “through 2020, 80% of organizations will overshoot their cloud IaaS budgets due to insufficient cost-optimization approaches.” That’s four out of every five organizations! What’s more, 45% percent of organizations performing lift-and-shift to cloud IaaS without optimization were predicted to overprovision by as much as 55%, and overspend by 70% during the first 18 months of deployment alone.
It’s time to get our heads out of the clouds.
Any business, any investment, and any project needs clear objectives if the goal is to obtain and measure achieved results (or lack thereof). Meaningful results take time, and with projects anywhere near as complex as migrating legacy systems to the cloud, tangible outcomes also require blood, sweat and tears.
Unfortunately, “taking time” doesn’t align with our instant gratification culture, even though it’s patently absurd to think that any transformation of lasting significance can happen overnight.
A pre-calculated plan with a realistic timeline, a manageable budget, an eagerness to learn, whereby by everyone is working beyond their comfort zone—along with a proactive approach for dealing with setbacks—are crucial ingredients for achieving your objectives and future-proofing your systems, solutions, and processes.
Regardless of the nature of your business, whether you’re a hardware manufacturer, a service provider, a retailer, in the hospitality industry, entertainment, or any other vertical, you’ll be confronted, directly or indirectly, with software, new technologies, new frameworks, new infrastructures, and cloud. All of these scenarios will share one common denominator—and that is data. From raw to processed, from information to knowledge, from basic data sharing to what some even call “wisdom”, data knows many levels.
Where your data resides on the data pyramid (See Part One in this series), combined with your business, ambition, role and aspirations, defines how much work you’ll need to do to empower the possibilities of data, as well as to future-proof your system.
Stepping off-the-shelf and into the future.
Moving to the cloud strategically and cost-effectively requires a level of active engagement and ownership well beyond what can be achieved with an off-the-shelf solution mentality. Priorities include:
- Cost optimization to extend your business-as-usual environment
- A focus on improving the customer 360 experience
- Becoming more proactive in deflecting costs
- Accelerating your timing and market launches
- Adapting and maintaining a disruptive mindset
- Streamlining the environment to reduce ongoing CAPEX and OPEX
- Connecting and communicating with your customers via mobile apps and devices
- And more likely than not, a combination of all of the above.
Where the challenges begin and the solutions lie.
Because moving to the cloud (or, as the buzzword calls it, “digital transformation”) is usually a massive undertaking, it must be approached both holistically and incrementally. A holistic perspective keeps everyone focused on the long-term outcome and viability of the solution, while an incremental mindset helps to ensure you proactively address the challenges that lie ahead. Areas of concern include:
- Understanding your data
- Making your data accessible
- Integrating legacy systems with new architectures
- Setting short-, mid- and long-term milestones
- Deciding what and what not to move to the cloud
- Understanding, logging, measuring and tracking your consumption costs
- CAPEX versus OPEX balancing initiatives
- Data ownership and data governance
- Evolving from batch to event-driven paradigms
- Identifying the steps to migrate from legacy, to cloud-ready, to cloud-native deployments
- Identifying your resources, skills, and training needs
- Pursuing strategic cloud partnerships and alliances
- Protecting your long-term flexibility and desired levels of cloud agnostics
- Defining your use case scenarios and required scalability
- Selecting the proper distributed and parallel paradigms
- Forecasting your data consumption to anticipate cost patterns
- Keeping your core business and personnel on target.
The ability to modernize your applications and consolidate your platform in ways that future-proof your solution is ultimately what digital transformation is all about. As I have tried to show in the high-level list of digital-migration steps above, moving to the cloud strategically is neither easy nor routine.
But it’s not only worth it, it’s increasingly mandatory for business survival. Short cuts never work, but smart planning, objectivity, and the right resources can transform your business in ways that were literally unheard of a decade ago.