5 common business mistakes when moving to the Cloud

Here are five common business mistakes, companies make when moving to the Cloud. Solve these mistakes and your Cloud strategy will redefine your industry...

1) IT is driving the Cloud migration

In many companies the business teams do not care about moving to the Cloud and let the IT department get on with it. The outcome is a cloud migration strategy in which old software is lifted and shifted to the Cloud and the word Kubernetes is the summary of the strategy. Without the involvement of the business, a Cloud migration is unlikely going to reduce costs, let alone bring extra revenues. They lose so much potential because an outstanding Cloud strategy can transform an industry, more about that later.

2) Our Cloud Strategy = Kubernetes = IT Employment Strategy

Google invented Kubernetes and operates its business on a Kubernetes-equivalent. Since our cloud strategy will make us the next Google, we need to be doing Kubernetes. That is often the official message. However the real message is simpler: "Without Kubernetes, IT might be out of job!". IT used to run the email servers but with Microsoft and Google offering hosted email and so much more, all of a sudden large parts of the IT skills around managing data centres and its software have become obsolete. By migrating software into Kubernetes, the IT department is assuring employment. Kubernetes is like a virtual data centre where you still maintain applications and databases.

3) Our Cloud Cost Strategy = Not enough SaaS and Hardly Any Serverless

There are two major Cloud strategies. One is a Cloud cost strategy. Let's go to the Cloud to save costs. If this is your major Cloud strategy, then you should go all the way out on Software as a Service or SaaS. Let others run the applications and platforms for you. The costs of maintaining one Cloud platform for a thousand companies are only marginally higher than maintaining one Cloud platform for one company. This means that SaaS companies can divide their operational cost over thousands of companies and as such provide you with pricing an internal IT team will never be able to offer. If you do not find a SaaS provider for a specific part of your IT stack, then you should use Serverless. Serverless means that your software goes to sleep when you do not need it and you only pay when you actually use the software. Given that you are unlikely going to use the software each second, 24 hours, 7 days a week, converting your solution into Serverless should save a lot of operational costs. Additionally scaling the software when everybody at 9 o'clock opens it, will be able to be done in milliseconds. No need for capacity planning, or paying for overcapacity which hardly gets used. Finally down-time will be lower because migrating from one version to another can be fully automated without loss of service.

4) Our Cloud Strategy is not a Revenue Strategy

Jeff Bezos, the founder of Amazon, wrote the following email to all employees in 2002:

This email transformed Amazon from a non-profitable company into a highly profitable company. 52% of Amazon's operating income and 63% of its profits came from its Cloud division. Jeff understood one thing twenty years ago which most executives still do not understand: IT can be a profit centre, and a very big one.

Blackrock, the world's biggest asset manager, generates $1B from its Aladdin assets management platform and it is the key reason why so many companies bring their assets to Blackrock in the first place.

Visionary companies understand that their software platform which solves their business issues could be sold to others who have similar business issues. IT should not be a cost centre that tries to bring IT costs as low as possible. IT should be a profit centre which provides digital solutions to the different businesses inside but also outside of the company.

5) The Cloud Strategy is not rewriting the industry

Who knows how to manage hospital beds, operating theatres, doctor rosters,... better than a major hospital. Who has more experience handling claims than a major insurer. Wireless broadband coverage = telecom, customer's financial situation = bank, energy consumption = energy provider,...

Why invest in a Cloud platform for your business, if you can invest in a Cloud platform for the industry. The hospital that offers their hospital management platform to all other hospitals will be able to become a marketplace for selling hospital equipment from others to their competitors and can enable the Uberised Doctor, who moves to the hospital who needs them most. The insurer will be able to manage the work and reputation of all tradespeople in a country. The telecom provider to provide managed enterprise connectivity for all others. The bank to provide KYC and credit scores to everybody else. The energy company to manage the national trade of energy. If you think beyond your company limits, then Cloud becomes an enabler to sell solutions that transform your industry. The most successful companies of our time, have Cloud strategies that transform industries. The rest will soon have to compete against a winner takes most, e.g. the Everything Store is on a path to sell exactly that: Everything.

Let me know if you need help redefining your Cloud Strategy...