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Cloud computing is delivering significant, quantifiable business benefits for organisations of all sizes. Most organisations are running on multiple clouds, or intend to do so in the near future, because multi-cloud fits their current business needs and helps lay the platform for future development.
These are the top level findings of a major piece of research by IDG for Dell Technologies and VMware across the UK, France and Germany.
The detail of the survey, however, also highlights a number of significant challenges that CIOs, business technology leaders and their colleagues in wider C-suite have overcome to ensure the immediate benefits of cloud computing are maintained in future.
Investing for change
The organisations surveyed by IDG had a clear set of requirements for cloud investment. A need for ‘general economic benefits’ ranked alongside ’application transformation’ – essentially laying the groundwork for longer term benefit – as the most important investment drivers.
This was followed by ‘data modernisation and business intelligence’, and ’building a resilient digital infrastructure and operating model’, as the next most important requirements. ‘Improving compliance’ was the fifth, of the most important cloud investment priorities for those surveyed.
These requirements reflect the traditional demands of all IT investment – a demonstrable return on investment, improved performance of current business and a platform for future innovation. And investment in cloud computing has appears to have paid off better than previous generations of IT investment – in ERP, CRM and similar monolithic enterprise systems. An impressive 92% of businesses in EMEA reported positive returns on their cloud investments. Respondents estimated an average 39% growth in revenue attributable to cloud, and this was far from the only benefit derived from cloud investments.
The following direct business benefits were highlighted by the survey participants:
The survey revealed that on average, businesses in EMEA are deploying more than five different cloud environments. Smaller companies with less than 5,000 employees averaged 3.2 cloud environments, mid-sized organisations, with up to 10,000 employees averaged five clouds. Large organisations, with more than 10,000 employees averaged 5.6 cloud environments, while 9% of those surveyed deployed more than 10 separate clouds.
A recurring theme in the survey was that the more separate clouds an organisation implements, the greater the benefits that accrued. This may seem counter intuitive, since cloud success requires ruthless standardisation and optimisation of systems, data and processes. The deployment of multiple clouds, also, raises significant management and interoperability issues.
However, the survey suggests a number of benefits from deploying multiple clouds, ranging from simply using of a cloud that is most appropriate to the desired business outcome, to being more efficient in delivering the business process optimisation, data quality improvements and other key prerequisites of successful cloud implementations.
The use of the most appropriate cloud for a business requirement explains the initial productivity and revenue benefits that come with ‘As A Service’ technology. It also explains why larger organisations tend to deploy more cloud solutions and achieve greater benefits than their smaller counterparts. Of course large organisations tend to have greater financial and technical resources and greater vendor management expertise than smaller organisations.
But CIOs at large organisations are also likely to invest in creating an overall framework for multi cloud deployments that can ensure year-on-year benefits from cloud investments.
That is why the survey results from questions on governance and compliance, for example, suggest that challenges involved in deploying one or two clouds are greater than for subsequent clouds and that subsequent cloud deployments, appears not to significantly add to the workload.
Facing the multi-cloud challenges
The clear business benefits of cloud deployments are hard won, with CIOs and business technology leaders reporting significant obstacles to be overcome.
When asked to choose the top three challenges to adopting cloud computing at their organisation, respondents reported:
The results highlighted notable differences between different-sized organisations. For the biggest organisations, cost management (31%) and security (33%) provided the greatest challenge in adopting cloud.
Security and governance provided a significantly greater challenge for smaller organisations (55 %) than their mid-sized counterparts (42%) or large organisations (33%).
For all organisations though, cloud was seen as a way to enhance security and governance. Respondents reported the greatest security benefit of cloud is enabling privacy with 82% saying it has helped them achieve more than half their objectives so far. Similarly, cloud systems (65%) were clearly preferred to on-premises solutions (18%) for data protection, with larger firms and those with more advanced cloud environments, leading the way.
Delivering the benefits
The primary reason that organisations adopt cloud technologies is because the IT team cannot deliver innovation at the pace the business requires. However, says Mike Van Vliet, Consulting Pursuit Lead at Dell Technologies, “the business is not looking for a cloud solution per se, for them it is just a means to an end.”
However, the CIO has the responsibility to create a strategy that ensures that cloud deployments do not become a mirror of an organisation’s already fractured, siloed on premises application portfolio.
Few, if any, enterprise IT organisations have the skills and financial resources to do all this in house. As in the past, they need technology and implementation partners and advisors.
But those partners, rather than selling closed, monolithic systems, should be offering integration, automation and orchestration services. For Dell’s Van Vliet, cloud deployments should fit into a template that allows for standardisation, self-service, automation, orchestration and charge back.
These are the essential characteristics of public cloud and should form the basis of multi-cloud deployments in the enterprise, adds Richard Bennett, VMware's Head of Industry Solutions & Strategy, EMEA.
“Organisations such as VMware and Dell have the technical and implementation capacity to help CIOs implement a multi-cloud environment that delivers innovation now and for the future, and that drives down costs whilst delivering ubiquitous security, compliance and operational management.”