Will Organizations Move 100% to the Cloud? The Majority Say No

Will Organizations Move 100% to the Cloud? The Majority Say No

By Special Guest
Ilia Sotnikov, VP of Product Management, Netwrix
  |  September 06, 2019

Cloud adoption continues to skyrocket.  Forrester (News - Alert) predicts the cloud market will grow to $230 billion this year, up dramatically from just over $100 billion in 2016.  This statistic did not surprise me at all, but I was shocked when IDG reported that 38% of IT departments feel pressure from management to migrate 100% to the cloud.

The increasing popularity of the cloud and management’s ambitions hardly mean that going “all cloud” will be in the cards for most organizations.  Netwrix’ annual survey, its 2019 Cloud Data Security Report, found that 65% of IT departments are either unsure about moving fully to the cloud or have no such plans at all.  Moreover, while interest in being 100% cloud-based within five years leaped from just 7% in 2017 to 31% in 2018, this year actually saw a decline — only 28% are now considering a cloud-only approach.

Here are some critical things to keep in mind as your organization hones its cloud strategy.

100% cloud is not always a good idea.

The desire to go “all cloud” will likely keep declining as organizations get more cloud experience.  While cloud computing does facilitate agility, innovation, faster time to market, employee productivity and cost reduction, it is not a magic unicorn that will bring absolute peace of mind to IT or enable management to swim in Scrooge McDuck’s pool of coins.

The fact is, replacing on-premises systems with cloud technologies is a complicated task, and the benefits do not always offset the costs and risks of the migration.  The bigger and older the company, the harder it will be to move all business processes to the cloud and, in most cases, enterprises don’t actually need such radical changes.

Indeed, thoughtless digital transformation can turn into a nightmare for the organization as a whole.  For instance, suppose your management wants to move your on-premises ERP system to the cloud to reduce maintenance and renewal costs.  However, the migration will require budget for consultants and significant time from the IT team.  Moreover, the transition might involve system downtime that disrupts critical processes that the ERP is part of.  These costs and risks should be evaluated carefully and weighed against the benefits of having ERP in the cloud.

Certain types of organizations benefit most from an all-cloud approach.

Attitudes about going all cloud vary by company size.  It’s perhaps no surprise that smaller organizations are more likely to be ready to move everything to the cloud within five years (35%, according to the Netwrix survey).  After all, the cloud helps these companies eliminate capital expenditures for on-site hardware and data centers and maximize their limited resources, so it can be a wise choice.

Startups are a special case.  They are often 100% cloud from inception, since minimal capital expenditures are required and cloud technologies can easily scale as the company develops rapidly, but often without a precise plan.  Additionally, cloud applications are accessible from mobile devices 24/7, which facilitates collaboration and productivity, regardless of time of day or employee location.  For example, fixing bug in a product or retrieving a customer list is just a few clicks away; such agility is vital for a startup fighting for its place in the sun.  Indeed, I believe that the companies most likely to have 100% cloud infrastructures in the future will be today’s startups that were born in the cloud.

Consider cloud-first rather than cloud-only.

While a 100% cloud approach is definitely not right for everybody, Gartner (News - Alert) says that more than 75% of organizations that use cloud services today have a cloud-first strategy.  Being cloud-first means that whenever a new IT project pops up, the organization first considers implementing it in the cloud, rather than on-premises.  But, a cloud-first approach should not be allowed to morph into cloud-only; IT should not bluntly ignore on-premises options.

Cloud options include software as a service (SaaS (News - Alert)), infrastructure as a service (IaaS) and platform as a service (PaaS), which can all offer cost efficiencies. IDG found that organizations will soon be relying more heavily on these models for application delivery:  As of August 2018, the average IT environment was 48% cloud (23% SaaS, 16% IaaS, and 9% PaaS).  But, in 18 months’ time, IDG predicts the cloud will account for 69% of the workload (33% SaaS, 22% IaaS, and 14% PaaS).

Conclusion

Aggressive promotion of cloud technologies by cloud proponents and management bent on optimizing expenses is a dangerous trend.  Any IT project, including cloud migration, should consider what benefits business can get out of it, what risks it may face and how high the price will be. I’m appealing to taking pragmatic approach when deciding to move infrastructure, data or business processes to the cloud. Cloud is the new era of computing, but it is not a magic wand.

Ilia Sotnikov is vice president of product management for Netwrix, a provider of information security and governance software.

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Edited by Erik Linask