By Sai Subramanian, Chief Reliability Architect, Hitachi Application Reliability Center
Enterprises, as we know, are changing. Their transformation has been accelerated by the COVID-19 pandemic. Those who were hesitant about cloud adoption are now beginning their journey. Public cloud computing expenditure by enterprises is expected to touch 51 per cent across categories within the application software, infrastructure software, business process services and system infrastructure markets, according to a Gartner research study.
Another study by Gartner found that IT executives viewed talent shortage as the most significant barrier to deploying emerging technologies. Skill shortage is a leading factor inhibiting cloud adoption among the technology domains, such as compute infrastructure and platform services, network, security, digital workplace, IT automation and storage and database. Multi-cloud management complexities, the risk of higher costs and a lack of governance and security pose additional challenges.
Adopting a strategic approach
Gartner forecasts that end-user spending on public cloud services is expected to grow by 21.7 per cent to reach USD 482 billion in 2022. By 2026, the public cloud spending is expected to exceed 45 per cent of all enterprise IT spending, up from less than 17 per cent in 2021. However, for the RoI to justify the spending boom on cloud, enterprises must develop robust cloud strategies that capitalize on the cloud technology.
As more companies deploy modern workloads on their private, public and hybrid clouds, they are realising they cannot scale by capacity. Hence, a portfolio assessment to develop a well-defined business and cloud strategy is critical. It helps the enterprises know what they need to gain from moving workloads to the cloud and understand how it will affect their current IT infrastructure, processes and people.
It will aid in defining goals, such as cloud storage considerations and the target operating model that must be selected. It is also essential to develop a cloud migration strategy that identifies which applications can be rehosted in the cloud without any rebuilding (lift and shift), optimising them to take advantage of what the cloud has to offer and identifying applications that require fundamental re-architecting (refactoring) to leverage the cloud.
Managing cloud migration costs
Often to save migration costs enterprises opt to prioritize the lift and shift approach, where the workload moves into the cloud without modification. However, this can result in higher cloud operating costs post migration. The ideal approach would be to rewrite and rerelease the application in a cloud native way or consider replacing it with a Software as a Service (SaaS).
Some enterprises scale by deploying more people to the task, but it only increases their overhead costs. For better efficiency, organisations must embrace a philosophy of scale-by-capability aided by automation. Enterprises must adopt modern operating models to run applications reliably and efficiently.
The cost element is compounded when enterprises end up moving towards multi-cloud. It posed a lot of challenges in 2021 when enterprises struggled with cloud silos while adopting application modernisation and data integration. IDC predicts this struggle to remain through 2022. Only 20 per cent are expected to adopt a well-connected cloud strategy to address these concerns.
Embracing FinOps
Enterprises embarking on digital transformation must have cost-effective, value-driven, agile and sustainable strategies for an efficient transformation at an organisational level. It is important to consider the associated infrastructure maintenance costs. It is encouraging to see the FinOps operating model for the cloud emerging as a solution.
FinOps plays a key role in cost savings by enabling a cloud financial management discipline and cultural practice that helps organisations derive maximum business value. This model helps engineering, finance and business teams to collaborate and streamline data-driven spending decisions.
A study by Forrester assessing the three-year financial impact of cloud migration of enterprises in the insurance and non-profit sectors found that these enterprises saw a Return of Investment (RoI) of 114 per cent, achieved a 58 per cent faster cloud migration and 85 per cent-time more savings for the engineering team working on cloud app modernisation. These firms were able to save USD 2.7 million in ongoing support and management services.
Addressing talent shortage
In addition to the technical and financial challenges, talent shortage is a huge issue that impacts the industry as a whole. Efforts to fill the talent gaps are happening in pockets. Some organisations reach out to colleges, but these candidates are often not industry-ready and have to be put through training programmes before being onboarded to projects. An industry-wide coordinated approach in partnership with universities to address the talent crisis is essential.
With an optimal strategy to address above challenges, enterprises need to focus creating systems that can generate data and derive insights to create a data-driven digital environment that can flourish.
