The rush to the cloud during the start of the pandemic motivated companies sitting on the sidelines of digital transformation to get into the game.
But moving to the cloud is a continuous process, not just a one-time, necessary, cost-saving action.
Just doing a "lift and shift" of data, systems and applications into the cloud isn't enough, said Karthik Narain, global lead of Accenture Cloud First. Not making a long-term plan for working in the cloud leads to things like cost increases, frustration on the part of employees and customers, and stifled innovation that moving into an entirely new setup allows.
Two-thirds (65%) of enterprises saw up to a 10% cost savings due to moving to cloud, according to an Accenture survey of nearly 4,000 C-suite executives. However, six in ten executives do not actively manage and optimize it continuously, and 80% do not actively prioritize the use of cloud-native architectures, applications and data.
"If you just focus on the cost savings aspect of it, you will not take advantage of the capabilities of the cloud as well as the capabilities that organizations can get due to the cloud business model," Narain said. These businesses "will not reimagine their systems and processes."
Savings unrealized in cloud
While the shift to cloud is often a cost-cutting measure, not optimizing for the cloud can skyrocket costs just to operate in that space.
C-suite leaders "heard all the stories that cloud is cheaper but you have to take advantage of the cloud and features that it offers properly," said Matthew Hon, chief technology officer for public sector at Fujitsu Americas. "If you take your workload and dump it in a cloud and don't optimize," it's not going to run the best way possible in that cloud.
For example, data might have been accessible at all times when in a data center, but if no one uses it at night, consider whether it needs to be accessible at all times in the cloud.
IT leaders should also ask if they picked the right size cloud, and if they can scale up and scale down. Some CIOs have also been surprised by charges for data transfers, which are not always part of the initial price, Hon said.
While cloud may seem infinite with its ability to scale to meet workloads, the cost to do that kind of scale can catch up with IT leaders.
Not having eyes on who is spending what in the cloud can quickly run over budget, said Brian Klingbeil, chief strategy officer at Ensono. "The app developers are off doing cool stuff but it's sprawl with no governance."
While of course a company wants developers to innovate, governance or rules on who can do and spend what can help make sure costs don't spiral out of control, or at least give CIOs an idea of what that spend is going toward so they can explain it to the rest of the C-suite.
Workloads still live in a data center world
Clouds don't run like data centers, bringing the benefit of flexibility.
But if workloads and the data they need to access still act like they're in a data center, the organization won't run as efficiently, which can lead to frustration on the part of customers and employees.
For a multi-national company that has employees and customers all over the world, an application needs to "be available in multiple zones for multiple reasons," said Narain. "A lot of people will use it all the time and it needs to horizontally scale" instead of having all of those users tap into an application in just one spot.
Just like applications need to be optimized for cloud or become cloud native, security needs to change, too.
Previously workloads were in data centers when it was all within the four walls of your organization, Hon said. While cloud is secure, "if you haven't done an assessment against it with penetration testing, you could potentially have some holes that you may look to close," he said.
The cost of not going all in on cloud
The companies that did best at the start of the pandemic were ones who had already started digital transformation and used cloud to adapt to a rapidly changing world.
Klingbeil points to companies using an agile cloud architecture to quickly spin up curbside pickup. "Companies are already embracing more modern ways of doing things," as a result of lessons learned from spring of 2020, and these examples should be cited when talking to the C-suite about cloud related costs, he said. "I hate to overuse a buzzword but it really is all about agility."
Agility isn’t the only thing that companies can miss out on in terms of keeping up with their competitors. Those who that don't go all in on cloud will be missing the new kinds of business models the technology allows, Narain said. Having a common cloud framework lets enterprises take advantage of applications built by Amazon, Microsoft, Alibaba and Google.
"Why would you not take advantage of that kind of R&D Innovation?" he said.