The economic slowdown turned the race to the cloud into a marathon. Are IT leaders setting the right pace and taking the right precautions?
While the pandemic brought years of exponential growth, now, without doubt, the cloud computing market is experiencing a slowdown. Some public cloud providers reported slower growth towards the end of 2022, and across all sectors, organizations are looking to tighten budgets in response to ongoing market disruption and economic uncertainty.
Participating in digital transformation was top of the agenda throughout the pandemic, including building rapid and wholesale migration to the cloud. But with economic conditions becoming more challenging and high inflation affecting companies in almost all regions, large-scale transformation projects are likely to be put on pause or at least scaled back in 2023. This will mean organizations slowing down their cloud migration efforts.
Many businesses have found the actual cost of cloud computing is far higher than envisioned. The initial cloud promise of cheaper, more transparent IT costs hasn’t materialized for many CIOs, who now face unexpectedly high bills. ‘Cloudflation’ has increased prices, and organizations are feeling the impact more than they should because they don’t have the right discipline and control on cloud spend or the right visibility into cloud utilization, performance, and cost.
Additionally, some recent high-profile public cloud outages have also caused IT leaders to pause and reflect on their cloud migration plans – businesses know that they can’t afford to have their critical apps go down.
Cloud isn’t a cure-all to solve all IT and business challenges overnight, but longer term, it is still necessary for businesses to remain competitive and to build resilience and agility into their operations.
The reality is many organizations, in their (understandable) haste to innovate in response to changing customer and operational demands during the pandemic, poured money into cloud migration projects but without a clear and long-term strategy. Simultaneously, technologists have taken advantage of cloud-native technologies and low-code/no-code platforms to accelerate release velocity and build more dynamic applications across more platforms.
Unfortunately, many technologists are now struggling to manage increasingly fragmented and complex multi-cloud environments, with little visibility into IT availability and performance, security vulnerabilities, and, indeed, utilization and costs.
In the latest research from Cisco AppDynamics, 92% of technologists admitted that the rush to rapidly innovate and respond to the changing needs of customers and users during the pandemic has come at the expense of robust application security during software development.
See also: Hybrid Cloud Cover Hides Risks
IT leaders must become stewards of strategic and sustainable cloud adoption
We’re now seeing a realization that organizations need to be more targeted and measured in their implementation of cloud technologies. Many prefer a hybrid approach, as some items like a database or critical component of an application will remain on-premises for the near future. As businesses in all sectors re-evaluate their digital transformation plans, IT leaders have an opportunity to take a step back and adopt a more considered and strategic approach to the cloud, looking at the business drivers, critical priorities, and potential stumbling blocks.
IT leaders need to explore not only the possibilities that the shift to cloud infrastructure and cloud-native IT methodologies open up in terms of speed of innovation, scale, and agility; they also need to fully understand the implications for their organizations in terms of the operational, structural, cost, and cultural impact of cloud migration. Technologists need to be aware of the cost of workloads running in the cloud, otherwise, they risk cutting into the business’s profit margins. This insight is critical for IT leaders to get a grip on cloud spending and manage the soaring complexity their teams are tackling daily. IT leaders need to develop a 360-degree view on cloud adoption and educate business stakeholders on these realities.
More than ever before, IT leaders need to be able to validate investments in the cloud and ensure performance improvements. To do this, they need to ensure they have the right structures, processes, tools, and insights.
Focusing on insights, people, and processes
One of the big problems for many organizations around cloud investment is a lack of the right tools and insights to measure impact and benefits.
Many organizations still don’t have full or unified visibility into highly distributed and dynamic cloud-native technologies. Not only does this make it incredibly difficult for technologists to manage and optimize application and infrastructure performance (because they can’t pinpoint the root causes of issues), but it also makes it impossible for IT leaders to understand and demonstrate how cloud technologies affect business performance.
The traditional approach of monitoring IT availability and performance only shows whether applications or supporting infrastructure are running and where alerts arrive too late, impacting the user experience. It’s ultimately focused on avoiding downtime and outages. This is why IT leaders need to move from monitoring to observability, including the impact to the business.
Observability enables IT leaders to not just see whether an application is running but how well it is running and what impact improvements will deliver to the business. Organizations can finally get visibility into the benefits that cloud investments are delivering.
IT leaders should also look to ensure that they put in place the right processes and structures within their IT departments to support ongoing cloud migration. Across all industries, organizations have found that the rapid move towards the cloud over the past three years has led to significant operational and cultural issues. The creation of new teams and functions such as CloudOps, DevOps, and Site Reliability Engineers (SREs) has accelerated cloud implementation, but it has also caused new silos to emerge within IT departments. And fragmented working practices are now severely hindering the ability of teams to manage and optimize application availability, performance, and security.
Our research found that ongoing collaboration between teams such as ITOps and security teams takes place in only 24% of IT departments and that siloed working practices are having a range of negative consequences for organizations. They’re more likely to suffer from security blind spots or gaps in their security protection, and IT teams find themselves in a constant struggle to manage different priorities between the speed of application development, application performance, and security.
This is why it’s essential for IT leaders to implement a DevSecOps approach into their IT departments, where security and compliance testing are incorporated into the software development lifecycle from the very outset.
Skills in demand
The other key area of focus for IT leaders is, unsurprisingly, skills, which remain a massive challenge across every sector. With access to high-quality developers and security skills becoming scarcer, particularly people with highly specialist cloud-native skills, IT leaders need to ensure they create the right cultural environment to attract and retain the very best talent.
This means ensuring technologists have the right support, structures, and tools to perform at their best and deliver maximum business impact. Most technologists are fully aware of the need to adapt to new working practices, and they welcome the chance to operate in a more collaborative manner to support the shift to the cloud.
All technologists need to push themselves to broaden their skill sets to operate effectively in cloud-native environments. Not only must they develop their specialist skills, but they also need to increase their knowledge of other disciplines. For instance, ITOps teams need to become more aware and knowledgeable about security, and security professionals must have a much deeper understanding of application development and performance.
IT leaders need to educate their IT teams around these new requirements and paint a picture of how their department can operate in the future without the silos and pressure that has been a staple of the last few years. IT leaders need to inspire their teams to become genuine business stakeholders, thinking beyond immediate IT priorities to constantly consider the impact their work delivers to customers and the business.
In a cloud-native environment, technologists need to be brought together by common purpose and goals, so they develop a broader outlook that focuses on wider organizational objectives rather than just their own individual or team KPIs. As IDC predicts, by 2024, ‘businesses will refine their organizational setup and their performance metrics to tie business outcomes (such as customer satisfaction) or more classical business metrics (such as margins and costs) to software delivery.’
This is the challenge and opportunity for IT leaders in 2023 as they rethink their cloud strategies and prepare their organizations for the long-haul journey to the cloud.