CIOs and IT decision makers should consider these six factors before migrating to the cloud, including the state of your existing IT environment.
While there’s been a lot of enterprise hand-wringing about migrating to the cloud, the reality is that companies take various approaches to migration, and decision making about cloud services isn’t a onetime event. Some applications may make more sense in the cloud than others.
So let’s dissect why migrating to the cloud isn’t a simple decision. First, companies take various paths to the cloud. Some may use exclusively public cloud services, such as Amazon, Azure or Google. Others may choose a hybrid strategy, where they house some data in the cloud and some in their on-premises data centers. For compliance, security or other reasons, still other companies may elect to keep all data on premises in a private cloud.
Second, buyers need to evaluate whether to purchase cloud services on an application-by-application basis or for their entire environment. Third, and lest we forget, technology purchasing decisions have grown more complex, with more business-line stakeholders participating in the process.
As IT decision makers consider the best pathway to the cloud, there are certain factors to consider. While not an exhaustive list, here are six key cloud migration factors.
Technology buyers need to first consider what they stand to gain by migrating to the cloud. A related but less obvious concern is whether those features and technologies enabled by cloud computing are compatible with legacy applications and operating systems already in use.
When organizations mistakenly subscribe to a cloud-based application that can’t exchange data with one of their on-premises applications, they fall into a trap. For example, when a company’s customer relationship management system (CRM) is in the cloud and the cloud service lacks an interface to an on-premises enterprise content management system (ECM), that organization will be hard-pressed to include customer information in its ECM workflows.
“Increasingly you see middleware tools to connect things like cloud-based CRM to on-premises enterprise resource planning ERP [enterprise resource planning],” said Giorgio Nebuloni, IDC’s multicloud research director “Some of them are fairly mature by now. Of course, if all your applications are from the same vendor, the vendor usually provides interfaces that cross the boundary between cloud and on-premises. So, for example, Oracle’s cloud-based CRM can exchange data with on-premises Oracle ERP.”
Consider how your decision might limit your choices in the future. With any complex technology purchase, vendor lock-in is a risk. With cloud services, not only do you rely on a cloud provider’s ability to offer stable, ongoing services, you also depend on that provider’s particular upgrade cycles and technology roadmap. That can create coordination problems with other technology upgrades; and if the provider is behind the curve, subscribers might find themselves at a disadvantage with respect to their competitors who may benefit from newer technology.
Companies sometimes distribute risk by choosing multiple cloud providers. “If you’re stuck with just one cloud provider, that provider has a lot of power over you,” Nebuloni emphasized. “A lot of large companies are double-sourcing (or in some cases, even triple-sourcing) cloud services to regain leverage over suppliers. Many are using multicloud management software to get back the reins on the infrastructure, so they switch from one provider to another – or at least threaten to do so if one provider doesn’t behave.”
One of the arguments for migrating to cloud services is that cloud technology is paid as an operating expenditure (OPEX) and requires little or no capital expenditure (CAPEX). Paying more money up front probably changes a company’s internal decision-making process, requiring higher-level approvals than monthly (or annual) expenditures of lesser amounts, plus it ties up cash. But, when you account for technology purchases as CAPEX, you can amortize the expense over several years, which provides some financial advantages.
Other financial considerations in migrating to the cloud versus staying on-premises include the cost of running infrastructure --hardware, software, support staff, the server room and the costs of climate control—as well as the costs of fault tolerance and disaster recovery. These costs can be included in a cloud services subscription, though the specifics will depend on the service-level agreement you negotiate.
Some experts argue that your data is most secure in the cloud, because cloud providers can safeguard data more effectively than most enterprises. Others say that having your data on another company’s servers makes your company vulnerable to breaches by unscrupulous employees of that other company. In reality, security breaches have struckon-premises and cloud infrastructure.
A related concern is compliance. Regulations might require that you store data only in a specific region or that certain data not be deployed to the cloud at all. If you choose to migrate to the cloud, there are three ways of mitigating security and compliance risks:
1. Store the most sensitive data on-premises, using either a hybrid cloud or a private cloud.
2. Manage your own security keys. That way your service provider cannot decrypt your data.
3. Select a cloud service with configurable data residency to guarantee your data is stored in a certain geographic area.
When people think about switching costs, moving data to or from a cloud service often comes to mind. But according to IDC’s Nebuloni, switching costs have less to do with technology platform and more to do with business process. “The cost of switching is primarily related to the fact that your business processes tend to be set by whichever application you’re using. The users get used to a workflow. If you move to the cloud, some of those flows will change.”
“There are other costs,” said Nebuloni. “Sometimes you have to rewrite code for your application. If you build an application on AWS, for example, unless you wrote it strategically, you’ll have to rewrite some of the code when you switch away from AWS. This, of course, applies mostly to PaaS.”
Organizations that need agility have few options outside of cloud technology. We commonly associate agility with variations in the number of users connected on the front end. For example, most TV companies use a cloud front end because they have no idea how many viewers they’ll have at any given time.
But now, even more traditional companies that are more static, with a fairly predictable supply chain, need agility on the back end. “A car-part manufacturer might build an IoT [Internet of Things] architecture that connects into all partners of the supply chain and feeds all the data into a back-end platform,” Nebuloni said. “First, they get much more volume than they had before. Second, that data is much less predictable because they’re connecting to real-time sensors on factory floors, and so on.”
“So they need more scalability than they ever needed before,” Nebuloni emphasized. “And now they are pushed to either build a cloud back end or to cooperate with some of the large cloud providers for that back end.”
Migrating to the cloud is not something to consider just once; you can’t set your IT environment and forget it. Instead, migrating to the cloud, or to multiple clouds, is a decision to be confronted repeatedly in almost any organization, as the needs of the business change. And any time you consider migrating some part of your organization to the cloud, remember that the decision cannot be made in isolation.
You have to account not only for the features you need, but also how a migration might set you up for further evolution. You also have to consider how the cloud fits your organization’s financial models and security policies, as well as how much it would cost to switch. Finally, look at how much agility you need and where you need it.
The stakes are high almost any time you consider migrating to the cloud. If you consider every potential migration from the six perspectives listed above, you’re more likely to make a sound decision.
Affiliated professor at Grenoble École de Management, and author of the book Master the Moment: Fifty CEOs Teach You the Secrets of Time Management, Pat Brans writes and teaches about cutting-edge technology and the business surrounding technological innovation. Previously, Brans worked in high tech for 22 years, holding senior positions in three large organizations (Computer Sciences Corp., then-HP, and Sybase).
Article illustration by Tristan Cobb, Turbonomic, 2017