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Transition and Transform – Drive Business Transformation via Cloud

In Software & Cloud Economics, Thought Leadership

Business as usual will never be business as usual again. It’s a sobering thought, but if there is one thing that 2020 has taught us, it is that relying on what has worked in the past to guide how best to navigate in the world ahead, is destined to fail. And whether your business is commercial, government, or not-for-profit, you need to seriously assess your business posture and the underlying technology estate in these times.

 

Think about the iconic New York City  (NYC) Cab. In order to own and operate a genuine NYC cab you need to own a NYC taxi medallion, more formerly known as a CPNC (Certificate of Public Necessity and Convenience). The price of NYC taxi medallion’s rose steadily for decades and was selling for $1.3M in 2014.

 

If you bought one in the 70’s, 80’s, 90’s, and even after, you were literally in the driver’s seat and dreaming big! The medallion was viewed as the investment of choice, the path to the “American  Dream” for many an immigrant.

 

But by mid-decade, the bottom fell out and medallions were selling for 90% less than their high in 2014, and the community is seeking creative solutions to keep this legendary institution solvent[1].

 

What happened? There are many causal factors that played out for decades. But one clear cause was the emergence of new startups with disruptive business models.

 

Companies like Uber and Lyft disrupted this long-standing industry by leveraging cloud computing, mobile, big data, and AI technologies. And what is happening in NYC is happening around the world, stymied at least temporarily by government intervention. And what is happening to the taxi industry is happening to dozens of other industries and has added to the disruption brought on by the COVID-19 pandemic of 2019/2020 leading to an unprecedented number of bankruptcies and closures.

 

Thus, Business as usual will likely fall short unless you have a transformational mind set for your business. You need to transform your business and your products either as a defensive move against disruptive upstarts or as an offensive move to lead your market. Embracing cloud computing is an essential part of either or both of those vectors.

 

To start upon or to accelerate your cloud journey, you need to focus more on the mind set of leadership as opposed to simply the technology. For example, if you are a CIO, you may view your business as one of managing an IT estate that you and your predecessors amassed over decades.

 

That IT estate can be highly virtualized and seemingly have a great TCO for your organization. But as it ages, you and your organization amass great technical debt on aging assets. And when it comes to responding quickly to a disruption, including an existential one like what we have seen in 2020, having a brittle monolithic IT estate can quickly become a liability.

 

Cloud computing offers you a technology platform to support and drive a business strategy defined by continuous innovation and continuous self-disruption. Cloud offers a cost-effect technology platform to drive unparalleled experimentation and can help your organization be a fail-fast learning organization responding to the ever changing needs of customers, competitive moves, and a whole host of “disruptions”.

 

But it starts at the top. As high as the CEO, but at least at the CIO/CTO level there has to be genuine conviction, consensus, and alignment to drive change in the organization. There has to be the setting of audacious goals, otherwise technology teams further down the organization will pay lip-service to embracing cloud computing without achieving break through adoption and/or utilization.

 

An organization needs to understand that a move to cloud will play out over years. But a careful, thoughtful review and assessment of existing on-prem workloads and applications, can identify a phasing strategy of what can move in the short, medium, and long run – and what applications may be destined to remain on-prem until they are totally reimagined on the cloud.

 

But what about funding? Where will the money come from to fund a shift to or an acceleration on cloud, particularly in these post-pandemic times? Accepting that Business as usual will never be business as usual again – research by leading IT analysts Gartner as well as IDC point to IT budgets dropping 5-8% in the years ahead. However, spending on cloud services is expected to rise by 19%[2].

 

That rebalancing is something that both business and IT leaders should heed and align to. Although budgets will drop in absolute terms, the percent of budget ear-marked for cloud is projected to rise. Certainly that budget will be used to bring on or expand usage of SaaS collaboration tools to support expansion of work-from-work business models, but there will be resources to take on cloud migration and modernization initiatives as well.

 

Additionally, projects can be self-funded out of existing IT spend through license optimization. As organizations have built out their IT estate through the years, they may have succumbed to paying ever-increasing licensing costs for enterprise software that is either not being used or underutilized.

 

An expert assessment of your IT estate can save 15-30% or even more. That’s an exciting figure that can be applied to support full-on cloud initiatives!

 

Understand that a move to cloud is unique to your organization. You, ideally with an objective proven technology partner, need to set the course for your organization. There are many factors and issues to work through including:

  • Which of the Hyperscalers to employ for your transformation – Amazon Web Services, Microsoft Azure, Google Cloud Platform, IBM Cloud, Oracle, Alibaba, etc.?

  • Will you take an all-in, hybrid, or multi-cloud approach when it comes to hyperscaler(s)?

  • What applications will move to the cloud and in what timeframe?

  • How will the cloud support CI/CD initiatives to accelerate development and corresponding business initiatives?

There are certainly more, but the move to cloud is for most on-going enterprises fait accompli. But to achieve the goal, focus on these 6 points:

 

1. Align at the top.

2. Set big, audacious, scary goals.

3. Build a culture of experimentation.

4. Reward risk-taking and innovation.

5. Train teams on cloud technology & principles.

6. Don’t be discouraged by applying cloud to your existing IT estate. Phase it out!

 

And a 7th point would be to partner. Don’t go it alone. Learn from the mistakes and best practices of others. Align and surround yourself, your team, and your organization with proven experts that can guide your cloud journey in these unprecedented times!

 

We’ll help you understand the work required to move your applications to the cloud, and the cost savings in licenses that you can achieve

 

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[1] NYC taxi rescue plan calls for revaluing all medallions at $250,000 - https://nypost.com/2020/05/11/nyc-taxi-rescue-plan-calls-for-medallions-to-be-250000/

[2] Sharp IT budget cuts expected in wake of COVID-19 by Peter Sayer - https://bit.ly/CIOPOSTPENDIMICITSPEND