CLOUD · Updating our security processes and technology to support a cloud effort Hiring new...

CLOUD: The Engine for Innovation

A Softchoice Research Brief

Introduction: Cloud, an Innovation Engine

In this new research report from Softchoice, we reveal organizations of all sizes, across all segments, are beginning to see cloud as more than a tactic to “get out of the data center.” They now see the cloud as an enabler of new business models, new services and new levels of efficiency.

It is important to note that this research was conducted in December 2019, before COVID-19 and its effects on organizations worldwide. What we see today is that organizations that had already advanced in their digital transformation journeys were able to pivot in their response to the global pandemic faster than those who hadn’t.

Today, we have reached a tipping point: by embracing the cloud to control costs and create new business models, businesses will emerge stronger from the current crisis.

Challenges Arise, New and Old

As more enterprises shift to cloud environments, persistent barriers to adoption remain. Our research shows skill shortages and lack of expertise, compounded by increased complexity, lead to failure and poor performance in the cloud. To complicate things further, security, data privacy and compliance woes are creating critical levels of fear, slowing cloud adoption and business innovation as a result.

Cause for Hope with Proven Paths Forward

The good news: Organizations overall are investing in the right areas to make progress. According to our data, decision makers are budgeting for new security, compliance and management capabilities, while focusing on finding the right skill sets to guide them forward. But they risk falling short if they don’t act soon. To succeed, businesses must adopt a proven, methodical approach to getting over hurdles of cloud adoption.

Cloud: The Engine for InnovationA Softchoice Research Brief

©2020 Softchoice. All rights reserved.2



The Cheat Sheet

Here are a few of the biggest takeaways from our research:

A new paradigm emerges: Thirty-eight-per-cent of businesses are beginning to look to cloud to build new applications and services or unlock new insights from data and analytics. Meanwhile, 66% of decision makers said they intend to go “cloud first” for all new workloads and services. The use of platform-as-a-service solutions (PaaS) such as managed databases and serverless computing are driving their cloud migration for 61% of organizations.

Full speed ahead for small businesses: Organizations with fewer employees are outpacing larger enterprises in the adoption of cloud innovations – potentially challenging large incum-bents who can’t always keep ahead of disruption.

Breaking down barriers: Security, compliance and governance top the list of cloud adoption barriers for 51% of respondents. On the other hand, these items top the list of investment priorities for expanding cloud capabilities in the next 2 years.

Mind the gap: Our survey found that resourcing is perhaps the one cloud challenge that rivals security today. More than one-third of organizations struggle to hire, train and retain the people they need to make cloud transition possible. This could indicate a trend toward greater reliance on outsourcing and partnerships.

Step by step: IT teams may be looking to adopt cloud quickly, but mistakes on the path to cloud innovation will result in failure and bottlenecks. Organizations need a methodical approach – which we outline in the concluding section.

Continue reading to get the full details – and many more insights.



Methodology

The Softchoice 2020 Cloud Migration & Adoption survey combines the insights of 150 senior IT professionals and cloud decision makers in North America across industries. The survey was conducted December 2019.

Company Size:

Individual respondents represent companies of sizes ranging from 100 to greater than 10,000 employees.

Number of Employees

Job Roles

Job Role Levels of respondents were distributed as such: 24.6% Executive Management (C-Suite); 34.6% Department Management (VP level); 36% Middle Management (Director/ Manager levels).

11.3%

11.3%13.3%

14.0%

16.7%

24.7%

8.7%

Middle Management (Director / Manager)

Executive Management (C-Suite )

Department Management (VP)

Individual Contributor

1000 - 1,000

100 - 249 2,000 - 4,999

250 - 499 5,000 - 9,999

500 - 999 10,000+

36.0%

34.7%

24.7%

4.7%



Cloud Adoption: A New Paradigm

Beyond Cost Efficiencies: Cloud Drives Business Transformation

Business models are in flux in every industry as established customer-facing processes fall behind expectations. Today’s measure of cloud success isn’t just cost efficiency, but the speed of business transformation. The cloud can be a launchpad for the next generation of business models, including anything-as-a-service (XaaS).

It’s not surprising to see businesses of all sizes adopting cloud platforms. What is new and noteworthy is why they seem to be doing it.

Our research suggests organizations no longer look to the cloud as a tactical measure to lower costs, reduce data center footprint and relieve other traditional infrastructure headaches. In this new paradigm, cloud is increasingly used as the keystone to innovation, enabling busi-nesses to compete better and faster by leveraging connected ecosystems and new customer experiences.

Cloud as an innovation engine

Change is the foundation for accelerated innovation, but it comes slowly. According to our research, this new transformation is a work in progress, but it is gathering speed. Nearly 30% of businesses are currently leveraging public cloud to lower infrastructure costs while 31% are looking to modernize existing application investments.

We expect the “new” transformative use cases of cloud to accelerate. Looking beyond cost efficiencies and modernizing legacy IT systems, 25% of IT leaders said they plan to use cloud platforms to build new applications and services. The investments made in modernizing legacy systems often play a role in supporting new transformative projects as well, such as building cloud-native applications.

For example, moving to a container-based architecture sets an organization up to improve collaboration, respond to change faster and reduce time to market when building new appli-cations. Meanwhile, modern database technologies enable the powerful business intelligence and analytics found in advanced applications.

Walk, then run with a clean data foundation

A cloud platform offers more than a new deployment model. Their power comes from the ability to leverage analytics and aggregated information across applications and data sources into smarter processes – faster than ever. To achieve this added value, however, requires a strong data and integrity strategy. Clean data is the foundation to proper analytics for both internal and customer-facing use cases.



Organizations today may not be ready to leverage the full scope of the cloud’s transformative powers. But many are laying the foundations to get there soon. While unfettered access to clean, insightful data is crucial to building next-generation applications and customer experi-ences, only 12% of businesses are investing in modernizing their data estates. Fewer still are budgeting for machine learning and artificial intelligence (9%)or integrating disparate sources of data to improve analytics (8%).

Current Cloud Approach: Shift to new apps, services and data-driven insights

Lower-cost infrastructure

Build new apps and services

Extend/modernize existing apps and services

N/A

Analyze data to gain new insights

Several ways

30.0%

25.3%

30.7%

12.7%

0.7%0.7%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

Updating our security processes and technology to support a cloud effort

Hiring new employees with cloud skills

Upskilling our existing in-house IT staff through cloud training and certification

Partnering with a cloud consulting & professional services provider

Cloud governance processes & tools

Upgrading our on-premise infrastructure to support cloud style services & experience

Partnering with a Cloud Managed Services Provider (MSP)

Application rationalization & re-designing applications for cloud envrionments

Updating current applications through containerization

Updating network to support cloud based service and applications

Data estate migration and modernization

Machine learning and artificial intelligence

Connecting different data sources for improved data analytics

54.0%

40.7%

39.3%

37.3%

35.3%

27.3%

24.0%

22.7%

17.3%

16.3%

12.0%

8.7%

8.0%

2020 & 2021, allocation of investment and resources to improve cloud



Drivers of cloud migration:

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

Ability to scale quickly and easily 67.3%

Benefits of managed services from cloud service provider (i.e. databases, load balancers, PaaS, Serverless) 60.7%

Free-up our IT staff for other tasks 57.3%

Fastest time to deployment 42.7%

Cost reduction 36.0%

Shifting focus away from infrastructure 34.0%

Getting out of the data center business 28.7%

Current overall cloud strategy: Cloud First dominates

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

Cloud-first for all new workloads and license renewals 66.7%

Migrate existing workloads into a public cloud 53.3%

Bursting from an internal environment to a public cloud for excess capacity requirements 43.3%

Migrate existing workloads into a hybrid cloud (private + public clouds)

38.7%

Migrate existing workloads into a private cloud 36.0%

When asked about their strategic view of the cloud, 66% of decision makers said they intend to go “cloud first” for all new workloads and services.

When looking at core business drivers of cloud adoption, the picture becomes clearer. Among their top reasons for adopting cloud, respondents cited: Scaling quickly and easily (67.3%), freeing up IT for other tasks (57%) and speeding time to deployment (43%).



Cloud Adoption: Full speed ahead for SMBs

Small business agility vs. enterprise complexity

The steady transition to the cloud will take place across businesses of all sizes, but far faster among smaller-sized businesses. We found organizations with 100-249 employees were set to increase their total number of applications in the cloud by 19.8% within 2 years, by far the largest jump expected across the segments in our survey. Those with 500-999 employees, on the other hand, will see the second largest jump in cloud adoption with an increase of 15.8%. This suggests a trend familiar to those in the startup space. Smaller businesses are positioned to benefit from disruptive technologies faster, while larger organizations deal with the complexity of legacy systems that need modernizing before they’re cloud-ready.

Cloud adoption by company size

70.0%

60.0%

50.0%

40.0%

41.1%

46.9%

55.5%

41.4%

57.2%

48.6%

54.6%

36.0%

45.4%44.8%

57.7%

47.5%

58.7%60.9%

30.0%

20.0%

10.0%

0.0%

100 - 249 250 - 499 500 - 999 1,000 - 1,999 2,000 - 4,999 5,000 - 9,999 10,000+

Today Next 2 Years



Cloud Adoption: Breaking down barriers

Security and data privacy burdens impede innovation in the cloud

Our research shows concerns around security and data privacy continue to be ubiquitous. They also remain significant factors in slowing the adoption of cloud initiatives. To this effect, our survey found the top challenges faced when moving to the cloud were: Getting approval from security team (43%) and problem-solving for specific security or compliance needs (42%).

While security concerns are understandable, they might represent an outdated understanding of modern cloud capabilities. Public cloud platform providers invest billions each year to increase the data protection, loss prevention and remediation capabilities of their platforms. To combat the inertia, digital leaders should point to these advancements to overcome the perceived shortcomings of cloud platforms.

Biggest challenges moving workloads to cloud:

While the new capabilities of cloud are clear, many organizations struggle to make the stra-tegic shift. For instance, when cloud decision makers were asked why certain workloads were left on-premises, regulatory and governance concerns at 51%, is the top listed reason with another 40% struggling to train existing staff. Many businesses today lack the confidence, processes and skills needed to realize cloud transformation.

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Costs associated with migration

Getting approval from our security team

Problem solving for my specific security or compliance

Application architecture of our existing apps

Training exisiting staff on cloud services

Performance issue with our cloud provider

Availability of apps & data

Costs associated with advisory or support services

Hiring experienced cloud experts

Developer investments for application redesign

45.3%

43.3%

42.0%

40.7%

36.0%

32.0%

30.0%

21.3%

18.7%

8.7%



Reasons for not migrating applications to public cloud:

Management and governance getting harder as multi-cloud rises

As multicloud strategies continue to gain popularity, achieving clear visibility, effective trou-bleshooting and proper governance is complex. Misconfigurations, failure to consider appli-cation dependencies and other human errors result in poor performance, overspending and added security risk. To keep up with the exploding cloud landscape, IT teams need a cloud governance program that addresses concerns around speed to market along with security, compliance, cost and operational delivery.

As the number of cloud platforms in an environment increases, these challenges intensify. When asked about what barriers business face with multicloud adoption, respondents were given a list of 13 possible challenges to select from when moving to multicloud environments. The results were clear: Topping the list were security, compliance and privacy concerns. The list of top challenges continued with respondents naming cloud migration and difficulty tracking costs and usage across multiple clouds.

This points to a need for organizations to prioritize clear visibility and unified governance across cloud and legacy environments. Otherwise, misconfigurations, human error, poor performance, overspending and increasing risk can be expected.

What challenges have you faced / do you expect to face in deploying and using multiple cloud environments?

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Regulatory & Governance concerns

We are attempting to make private cloud our primary cloud strategy

Lack internal expertise necessary to deploy and operate cloud workloads

Total cost too high

Avoid costs by getting full value out of current investments

Executive team did not endorse or severly limited it

Lack familiarity with specific benefits of cloud to my business

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Security concerns (i.e. App/Data Protection)

Managing compliance levels across environments

Privacy concerns (i.e. unauthorized access / data breach)

Migration of applications and data between clouds

Tracking costs across multiple clouds

Tracking usage across multiple clouds

Understanding different cloud platform services and comparing services across clouds

Network design - architecting hybrid cloud networks / virtual private networks

Managing network performance and latency between clouds

Lack of cloud management tools for operations

Inconsistent service levels across cloud environments

Lack of skilled employees to manage multiple cloud platforms

Lack of skilled employees to architect and configure cloud platforms

54.7%

43.3%

40.0%

38.7%

36.7%

31.3%

27.3%

26.0%

25.3%

24.7%

23.3%

18.0%

15.3%

51.3%

44.0%

40.0%

39.3%

36.0%

34.7%

18.7%



Overcoming the roadblocks

On the bright side, businesses tend to be fully aware of the challenges holding them back and are adjusting their processes and priorities accordingly. We noted a major shift in budgets toward improving security and governance and closing skills gaps. We are also seeing the early signs of organizations adopting advanced cloud capabilities that will truly disrupt the ways they do business. When combined with a proven methodology for consistent, effective cloud migration, we expect organizations to overcome the barriers and start delivering inno-vative solutions in the cloud.

In 2020 and 2021 IT leaders are investing in security, skills and governance.

Businesses today are reporting investment priorities that mirror the challenges they face when discussing solutions. Asked where they will invest budget and resources to improve their cloud strategies, in first place they listed “updating our security processes and technology” (54%). Following that, businesses were intent on hiring new employees with cloud skills (41%), upskilling existing in-house IT with cloud training (39.3%) and partnering with cloud consulting and professional services (37.3%). Rounding out the tally was putting resources toward improving cloud governance processes and tools (35%).

Where will you invest budget and resources to improve your cloud strategy?

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Updating our security processes and technology to support a cloud effort

Hiring new employees with cloud skills

Upskilling our existing in-house IT staff through cloud training and certification

Partnering with a cloud consulting & professional services provider

Cloud governance processes & tools

Upgrading our on-premise infrastructure to support cloud style services & experience

Partnering with a Cloud Managed Services Provider (MSP)

Application retionalization & re-designing applications for cloud envrionments

Updating current applications through containerization

Updating network to support Cloud based service and applications

Data estate migration and modernization

Machine learning and artificial intelligence

Connecting different data sources for improved data analytics

54.0%

40.7%

39.3%

37.3%

35.3%

27.3%

24.0%

22.7%

17.3%

16.7%

12.0%

8.7%

8.0%



Cloud Adoption: Mind the Gap

The resource gap.

The lack of expertise, resources and time are clear challenges to cloud adoption. Acquiring people with cloud-native skills is often difficult and expensive, retaining them even more so. Meanwhile, a long or challenging recruitment cycle can delay the execution of an organiza-tion’s cloud strategy by months or years.

This is evident in our research. Respondents told us other critical challenges on the path to cloud adoption include training existing staff on cloud services (36%), costs associated with advisory or support (21.3%), hiring experienced cloud experts (19%) and investing in cloud-ready appli-cation developers (9%). Similarly, 60% of cloud decision makers said that lack of internal exper-tise was a factor when deciding not to move a workload to a hosted environment.

Training existing staff on cloud services

Hiring experienced cloud experts

Yes No

19%

81%

Yes No

36%

64%

Challenge:

A large industrial refrigeration manufacturer in Canada was looking to improve efficiency by reducing power consumption and maintenance downtime.

They were challenged to build context aware refrigeration units that provided real-time operational data across the globe. This involved providing their end customers with intel-ligence data through a mobile app, allowing them to see how their refrigerators are operating.

The Solution:

Softchoice developed a digital twin refrigeration unit to allow our client to create a compre-hensive model to provide real-time operational information.

We implemented Azure IoT to develop a digital twin that captured 800 unique pieces of telemetry data. Softchoice engi-neers used the SAP Fiori devel-opment platform to sanitize and display information in the end customer mobile application.

Benefits:

Predict future failures

Fix problems before they arise

Increase overall refrigera-tion reliability and lower operating costs

New revenue stream and competitive offering

Built with Azure container technology, allowing for continuous development of the platform

SUCCESS STORY



Our Advice: Building Your Innovation Engine, One Step at a Time

Many organizations look to the cloud to drive meaningful, valuable transformation. But while many IT leaders would prefer a fast, efficient transition, it’s not always so easy.

From security concerns to skills gaps and siloed environments, the path to cloud transformation is fraught with challenges. Without the right information, organizations run the risk of moving workloads to the cloud blindly. This results in cost overruns and poor application performance.

Acting without evaluating application profiles and dependencies only increases the risk. In the end, a cloud migration viewed only as a pilot will likely lack the underpinnings of well-defined business and IT requirements. When this happens, IT leaders are no further ahead than if they’d never acted in the first place. Worse, they risk raising doubts about their ability to deliver on digital transformation.

Accelerate Your Cloud Adoption Journey

Every organization has its own reasons for adopting the cloud, but we continue to see two primary motivations: IT modernization and business innovation.

IT Modernization

This cloud adoption strategy often focuses on targeted uses cases such as business continuity and disaster recovery, cloud storage for long-term data archival and simple applications. Using an incremental process to deploy your first few applications and workloads in the cloud helps IT teams gain operational experience in the cloud. As you learn from experience, this early effort improves the migration process for more complex workloads tackled later.

A few key best practices to consider:

1. Identify desired business outcomes: Ask yourself, “Why are we moving to cloud?” It’s important to understand the incremental benefits to your organization and IT department in doing so.

2. Prioritize your migration workloads: Choose the right cloud migration use cases based on the business impact of each and take inventory of your application dependencies to reduce migration risks.

3. Skills readiness plans: Identify skills gaps within your team and consider augmenting with a trusted cloud solution provider who can accelerate your team’s transformation.

4. Be efficient in the cloud from Day 1: Conduct proper cloud cost modelling to right-size your deployments and optimize operational costs upfront in the planning process. Next, imple-ment a cloud governance program that covers cost management, operations, security and compliance with automation to scale with cloud provisioning.

5. Think resiliency and security: Create an IT resilience plan with both data protection and secu-rity in alignment to the shared security responsibility model.

Challenge:

A financial services company needed to evacuate their data center located in the United Kingdom and migrate work-loads into AWS cloud.

They were unclear of the AWS operating costs and were unable to identify which were good candidates for migration to AWS. Their ultimate decision criteria evaluated run rate costs in AWS to determine whether a given application was worth moving to the cloud.

The Solution:

The client engaged Softchoice to conduct an application Workload Assessment to determine which applications could move to AWS immediately and which required refactoring for cloud-readiness. The Workload Assessment also outlined the cost to run the applications in AWS and included a complete cloud migration roadmap for next steps.

Benefits:

Financial case proved beneficial for moving to the cloud

Increased success and reduced risk with a clear cloud migration and adoption application-centric roadmap

Identified a print applica-tion that would not work in AWS

Resolved the print application migration to AWS and the required licensing change without impact to users

SUCCESS STORY



Business Innovation

This motivation is focused on modernizing the digital estate to drive product or business process innovation. Modern approaches like DevOps, application and data modernization are common innovation use cases for cloud adoption. Keep in mind that cloud investments made for IT modernization are a critical support for business innovation projects.

As you embark on business innovation, considering the following:

1. Build consensus behind the business value of innovation: Before investing in any tech-nology, have a well-documented approach to defining the customer needs it will address along with the opportunities and outcomes it will create for your business.

2. Business stakeholder alignment: Be sure to get internal alignment and prioritize the oppor-tunities that will make the biggest innovative impact to your customer experience and business.

3. Lead innovation with customer empathy: Listening and observing your customer’s day-to-day life will help you focus on building an innovative, customer-centric solution.

4. Build a minimum viable product (MVP): Meet the core needs of your customer, then measure and test adoption. Use a “learn fast” approach with a continuous feedback loop to refine your solution.

5. Application and data modernization often go hand in hand: Today’s customer experiences are data-driven by design. We live in a world full of data that shapes our daily lives for the better. From automotive and home IoT consumer products to personal healthcare devices, data is at the core of modern application design and innovation.



Taking Action:

The research underlines the need for organizations to adhere to best practices and proven methodologies to guide them forward. Otherwise, the path to innovation in the cloud will be littered with complexity, errors and vulnerabilities.

Softchoice uses our Stages of Cloud Adoption methodology to drive over 500 successful cloud projects per year. Applying these guidelines helps your business overcome its specific chal-lenges and achieve seamless cloud adoption.

No matter where you are on your cloud journey, you need to act decisively. Failure to plan will lead to inefficiencies or even failure to drive innovation.

For more information, speak to a Softchoice cloud expert today or visit Softchoice.com

About Softchoice

Softchoice is one of the largest technology solutions and managed service providers in North America. Every day, thousands of organizations rely on Softchoice to provide insight and expertise that speeds the adoption of technology, while managing cost and risk. Through our unique points of view, we challenge leaders to think differently about the impact of tech-nology on their employees and customers. Softchoice enables organizations to realize the full benefits of cloud and a modern IT infrastructure through solution design, implementation, asset management, and assessment services, as well as ongoing support and mentorship through managed services. With access to one of the most efficient and cost-effective tech-nology supply chains in North America, Softchoice also ensures products get to our customers quickly and in a trouble-free way.

https://www.softchoice.com/solution-studio/cloud-services

https://www.softchoice.com/solution-studio/cloud-services

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