The Stack Archive Whitepaper

Cloud adoption reaches a tipping point

Fri 15 Apr 2016

Whatever cloud-adoption track organizations may be following today — and it’s clear that, to a large extent, every organization must stake out its own unique cloud-adoption journey — the importance of leadership by IT today is quite apparent.

Given that the concerns of the lines of business and non-IT executives often differ from those of IT, IT’s well established role is to bridge such gaps for the benefit of all stakeholders. The lines of business are more pressured to increase innovation, performance, and responsiveness. They are less pressured to reduce risk and cost. But these are equally important objectives. Ultimately it is IT’s job to protect the organization and guarantee service levels as greater portions of it move to cloud-based solutions. In our view, therefore, IT intervention has become critical at this point.

Lines of business, working groups, and individual employees have been unilaterally deploying cloud services for several years to pursue their goals and objectives. Even as IT itself has moved into cloud adoption, they’ve been investing in cloud-based applications, storage, and services without seeking the support (much less permission) of IT. Whether it’s a customer relationship management, collaboration, or human resources application that’s on offer, business units discovered early on that they could “swipe their own credit cards” and act without interference.

However, such actions are likely to produce unintended consequences. As IT knows very well, unilateral moves of this sort threaten the organization’s operational performance and productivity by creating new silos in new cloud environments.

Such moves also introduce new threat vectors in relation to information and system security. Dell’s 2014 Global Technology Adoption Index survey showed that 67 percent of mid-sized organizations globally (those with 100–4,999 employees) are currently using cloud. And 25 percent are using three or more types of cloud service.1 This is clearly a paramount issue for IT to address in 2015.

The need for speed, in other words, has put much of cloud adoption in conflict with IT’s mission to manage and safeguard the organization’s functions, data, and communications.

We believe that this dynamic is ultimately constructive rather than disruptive. Because here’s the big picture: A tipping point has been reached. IT organizations have become aggressive about investing in public, private and hybrid cloud solutions.

IT is reaffirming its leadership and governance role in relation to enterprise technology. And, just as critically, IT is strengthening its position as a critical new provider of strategic insight and guidance.

Cloud is the catalyst and key instrument of this transformative shift.

IT leaders have not abandoned their concerns and reservations relative to today’s risks. But they have realized it’s time to move, and they have begun to drive the adoption of cloud rather than just passively support it—or worse, resist it.

“The cloud market is moving beyond the early adopter stage and into the early majority phase,” according to research firm TBR. “In the case of internal IT, many [enterprises] have taken a proactive approach over the past year to address the desire for their internal departments to have greater access to the IT resources they need to drive the business. …While much has been made of the rising control and influence of the LOB decision makers for IT and cloud decisions, for many [enterprises] the IT department has never been more important. As the scale and complexity of cloud service use has grown within organizations, so too has the need for IT integration and management.”2

So it’s now critical for you to consider your cloud adoption options. What’s needed most in cloud today are frameworks and toolsets that will facilitate successful adoption strategies without sacrificing security, governance, compliance, or productivity.

The tipping point of cloud adoption

“Cloud” has been a buzzword for so long that, even as it finally reached broad acceptance in IT circles in 2014 as something real, definable, and ready for large-scale initiatives, it remains fuzzily defined. But cloud can be quite precisely defined (see Figure 1); and several significant milestones in cloud were passed in 2014 that can provide us with clarity and focus going forward:

  • Actions of bellwether organizations demonstrating votes of confidence. Top enterprises from all key industries, including government agencies, are now making expansive investments in cloud solutions. One example that gained significant attention was the CIA’s decision to invest $600 million in Amazon Web Services deployments.3
  • Advanced cloud technologies begin to go mainstream. Vendor offering sets have developed enough to reassure IT that management and governance of cloud adoption has become real. While Amazon stands atop the “pure-play” public cloud field, major software vendors such as VMware, Microsoft and Red Hat have aggressively begun to drive hybrid cloud capabilities in the enterprise. So even though the as-yet unmanaged adoption of cloud by LOBs is well under way, the very real risks associated with this adoption can now be adequately assessed and contained by mainstream organizations — and IT can believe that all cloud use, wherever it originates, will be visible and manageable by IT.
  • The maturity of an open-source cloud platform. OpenStack progressed significantly in 2014 as an operational and management software set for building infrastructure-as-a-service. Recent releases encompass a complete stack solution (compute, storage, networking, orchestration, dashboard) providing the services that application developers need to build, deploy and iterate on advanced applications. With more than 200 vendors now supporting OpenStack, there is clear commitment in the market—both from vendors and users—to openly coordinate cloud development and adoption.4

Cloud has achieved critical concreteness and relevance in 2015. The milestones outlined above show that organizations can shape their cloud adoption strategies and processes far beyond the usual homilies about defining business goals or changing the culture of IT.

Consider a recent cloud survey by North Bridge and Gigaom Research involving more than 1,300 respondents (including users and vendors).

  • 49 percent of businesses are using the cloud for revenue generation and product development
  • 45 percent either intend to or already run their company in the cloud
  • 72 percent have adopted SaaS applications, up from 13 percent in 20115

The study addressed the transition to cloud-based solutions:

  • 65-70 percent of respondents will move some significant processing for business applications to the cloud in the next 24 months
  • The front office is getting the most attention with 52 percent using SaaS for sales and marketing, 44 percent for customer service, and 44 percent for business analytics
  • High shares have adopted cloud for several IT-related functions: web presence (63 percent); communications (54 percent); and disaster recovery (47 percent)6.

According to the study, “IT is no longer fighting.” Across all functions tested in the survey, 60 percent of respondents stated they would move some or significant processing to cloud in the next two years.7

This research demonstrates that IT leaders are now actively contemplating their options and recognizing that nearly every system within IT can be transformed along cloud lines. So just cutting through the chaos and clarifying your best path to adoption will put you in a leadership position that’s valuable to your organization. And it’s the IT function and organization that’s in the best, if not only, position to provide this much needed clarity.

Entering the cloud era: multiple initiatives, multiple agendas

Cloud is ultimately about bringing technology closer to users in time and space while enabling those who are running that technology to maintain control over it. This is what the four cloud features of self-service, on-demand resources, metering, and chargeback allow. It’s a new balance, hidden from users, between spontaneity and steadiness. Cloud computing reliably makes organizations more responsive and faster by empowering internal services and capitalizing on external services.

Broadly speaking, there are two tracks for adopting cloud: use-case by use-case and as a general transformation of internal infrastructure. Both can be pursued at the same time.

Most initiatives follow the first track, targeting cloud for specific uses. For instance, an organizational initiative may be to add or migrate a storage tier to cloud (frequently, but not necessarily, off premises as a service) for backup and recovery. Another might be the migration of certain applications to the public cloud—this is what the explosive growth of software as a service is all about. IDC predicts cloud software will climb to $76.1 billion by 2017, at a compound annual growth rate of 22.1 percent.8

But cloud adoption is also very much following the second track, where it is being utilized as a general substitute for or extension of in-house IT resources. Increasing use of infrastructure as a service and platform as a service reflects a growing recognition that even basic IT resources can productively be self-served by users, or the applications those users are using, and delivered on demand. Outsourced IT resources in the form of public cloud are being adopted quickly by organizations that place a premium on running as lean as possible and achieving easy scalability. Smaller organizations may even start with public cloud for the majority of their IT. But this transformative track applies most to the on-premises infrastructure directly under IT’s management.

Whatever the cloud-adoption track, the importance of leadership by IT is quite apparent. Given that the concerns of the lines of business and non-IT executives differ from those of IT, IT’s well established role is to bridge such gaps for the benefit of all stakeholders. The lines of business face time-to-market imperatives. They are more pressured to innovate, accelerate performance gains, and respond to market needs. They are less pressured to avoid consequent risks and minimize long-term costs. But these are equally important objectives.

As the IT organization drives increasing cloud usage to respond to line-of-business demands while still meeting equally important mandates of security and governance, the gravitational center of enterprise technology remains with the IT organization.

Managing your cloud adoption

The significance of the tipping point that cloud has reached in 2015 is that IT organizations are beginning to aggressively and productively lead adoption of cloud by reaping its benefits of efficiency, agility, and speed while simultaneously providing the necessary structures for managing growth, costs, and risk.

So how do you achieve excellence in this endeavor? How do you ensure your core objectives are met? You begin by unpacking the various dimensions of cloud adoption, and then developing ways to handle each:

  • Plans: How do you ensure cloud adoption will meet goals for profitable growth? How do you determine what stays on premises and what can move off premises? How do you weigh one service provider against another? What frameworks and toolsets can you trust?
  • Talent: Where will you find the staff and providers necessary to manage and support cloud endeavors? What new training and development is necessary? What are the implications in terms of sourcing new talent? When will partnerships be necessary to close talent gaps?
  • Security: What vulnerabilities are raised by cloud solutions? How will those vulnerabilities be assessed, managed and mitigated? What are acceptable risks? What are unacceptable?
  • Compliance: What are the expectations of cloud in relation to regulatory, industry and business policies? What issues will be raised with customers and partners? What are the procedures for addressing compliance concerns?
  • Management: What will be IT’s role in ensuring that cloud services are effectively governed, tracked and assessed? What is the path forward in terms of continuous improvement? How will services be sourced and procured?

You’ll want to use your awareness of the two cloud-adoption tracks, use case and transformation, and of the business benefits of cloud features to bothrespond to line-of-business demands and proactively identify new opportunities. You want to obtain the speed and efficiency associated with moving users closer to the technology while ensuring it’s effectively governed. And you want to ensure your enterprise is capitalizing on the power of cloud to drive growth and cost reduction.

IT should have control and choice over the organization’s technology investments and use. But IT also needs the guidance, frameworks, and toolsets that clarify the implications and effects of each decision and action in cloud. These are the foundations of a simpler, safer, and more straightforward approach to cloud adoption.

Dell Cloud enables organizational agility and responsiveness by combining cloud choice with world class guidance helping IT maintain visibility and control, and focus on business-driving innovation. Learn more at Dell.com/Cloud. For Dell updates connect with us on LinkedIn and Twitter.

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1 Global Technology Adoption Index, Dell, Nov. 2014.

2 TBBroadly speaking, there are two tracks for adopting cloud: use-case by use-case and as a general transformation of internal infrastructure. Both can be pursued at the same time.R 2015 Cloud Predictions: 2015 Cloud Predictions: Fragmented Capabilities, Technology Business Research, Feb. 2015.

3 CIA Invests in the AWS Cloud Despite Survey Concerns, TechTarget SearchAWS, September 2014.

4 Voice of the User Reflected in New Features of OpenStack Icehouse Release, OpenStack. org, April 2014.

5 Gigaom Research Enterprise IT Buyer’s Survey, Northbridge Future of Cloud Computing Survey, 2Q14

6 Ibid.

7 Ibid.

8 Worldwide SaaS and Cloud Software 2013–2017 Forecast and 2012 Vendor Shares, IDC, December 2013

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