Cloud Hypecycle - What's Next?

I believe we are in 5th phase of cloud adoption. If you go by Hypecycle, industry has moved from Peak of Inflated Expectations to Plateau of Productivity over last 3-5 years. There are no longer questions like why cloud, is it secure, which type of cloud we should adopt, etc. but more production and RoI related questions and real expectations. Let's quickly see how we moved here first, before we spend more time on thinking about where we are going...

Technology Trigger - in this phase everyone was skeptical of cloud. CIOs were comfortable managing their corporate datacenters, CFOs liked predictable costs and annual CapEx cycles, developers and IT teams were happy using the tools and processes that they have been using for years and most importantly CSIO and Chief risk officers believed they have evolved tools and processes to handle the IT risks in existing setup. They did not like the loss of visibility and control over organization's data, not knowing how they would be able to handle risks in Cloud and how they would be able to face regulatory scrutiny. So, cloud adoption was slow. On the other hand, there were early adopters who showed significant advantages - agility, scale, new development technique, new business models, etc. and raced ahead of competition. Cloud Service providers and technology companies kept investing in educating customers, regulators and developing betters tools and processes conducive to cloud adoption. And of course there was marketing!

This led to Peak of Expectations. Most of the CIOs, CTOs adopted cloud because it was "cool". It was the next technology wave. All the analysts, technology companies, service providers, everyone hyped cloud so much that all your problems would be gone if you move to cloud. Remember the classic Dilbert comic strip?

This drove massive cloud adoption across industries and across use cases. One of the most popular motion in Cloud was Datacenter Migration. Companies with large datacenters - including RISC based computers wanted to retire their datacenters and move to cloud. Some of those projects - well architected and hybrid - were real success. Many, which were not well through through, well architected and built using monolith cloud solutions, did not give the anticipated RoI.

From there, the only way was Trough of Disillusionment. Both CTOs and CFOs started asking real questions on cloud adoption benefits, right models of cloud adoption, organizational readiness to take full advantage of cloud move, RoI, how can cloud help business transformation, etc.

These questions started getting addressed by cloud service providers and technology companies very well, leading to Slope of Enlightenment. By now, we clearly know, for any organization to be able to greatly benefit from cloud adoption, they need to do following:

1. Identify strategic objectives for Cloud adoption - clearly articulate what are you trying to achieve by adopting cloud - adopting new technologies available on cloud that are required for business transformation, rationalizing your costs - from CapEx to pay-as-you-use, reduce operational expense / operational pain, improve agility in rolling out new applications and features, modernizing your application stack, faster integration of new acquisitions, cost saving, etc. Creation of your cloud adoption plan really starts with clearly articulating and quantifying what are the objectives of cloud adoption. As you can see, I listed cost saving at the end!
2. Build Cloud organization - Moving to or adopting cloud not only means you have developers who can write code for cloud native applications by also you have IT service management team, security team, finance team, etc. who can understand and manage cloud. Your finance team needs to be able to predict cloud cost and factor them in your budgets and product costing, for you to be able to take full benefits of cloud pricing model advantages. While cloud is certainly more secure than on-premise datacenters due to platform capabilities, it requires a different understanding to extend your Corporate security and governance to it. You need not only the security experts, but Cloud Security or DevSecOps experts to secure your cloud based applications.
3. Start with low hanging fruits, early wins - sounds basic, right? But many organizations did not start their journey with simple and key workloads which would become hero workloads on cloud adoption. Either these were too complicated, too heavy to be the initial ones or they were so inconsequential that no one in the company really took their migration to cloud as any major achievement. So, you need to identify simple workloads to move to cloud first, but also ensure these have potential to be showcase - either key for company's business, or significant cost savings, etc. You should be able to complete the project in finite time and then celebrate the success to enthuse others.
4. Review Application stack - most of the early cloud adoption was driven by Infra, large datacenter or Applications (ERP, CRM) migration, etc. Over a period of time a clear cloud adoption methodology has emerged where organizations review their entire application stack and categorize applications into:

• Rehost - redeloy or migrate your infrastructure and applications as they are on to cloud. Use cloud agility and scalability to optimize your infrastructure, take benefits from CapEx to Pay-As-You-Go and Cloud automation, management capabilities to optimize your costs. You would typically do this for packaged solutions where you have not much control on the applications - like ERP.
• Refactor - Minimally alter your infrastructure and application environment to benefit from cloud scalability and agility. Applications in this category are similar to re-host, but where their utilization patterns allow refactoring.
• Rearchitect - materially alter the application to use cloud native architectures, modern application stack. Move from monolithic to micro-service, adopt DevOps, leverage cloud PaaS in your application, build hyper-automation, etc. These are be-spoke applications or in-house developed applications where you have control on the application environment and development.
• Replace - these are old, legacy applications which you would either retire or replace in favor of newer, cloud based applications. Here, first choice is off-the-shelf SaaS or ISV solutions, followed by using No-code, Low-code solutions. If both fail to address your requirement, commission a new application development using cloud native architecture. Over last few years, many categories of applications - either for internal IT or for businesses, have completely gone SaaS way - email and collaboration, CRM, conferencing, etc. whereas many other areas are fast moving to ISV solutions - either single tenant or multi-tenant. Final frontier here was regulated industries like banking and government, where acceptance of ISV solutions based on cloud is now common.

1. Build Cloud adoption plan - once you have articulated your cloud adoption objectives, built the team, identified applications, it is key to execute this as project by building a plan, putting milestones, review and governance structure around it. Once you are past the initial decision making and planning, ensuring you complete the execution as planned, is key to unlocking full benefits.
2. Invest in building cloud management and governance - as I said earlier, many cloud adoption projects fail not because of their initial migration / implementation but because these organizations do not invest in creating cloud management and governance. This requires selecting the right Hybrid Cloud management tools, identifying the additional security capabilities that you need, putting together right financial controls and optimization targets and monitoring the spending. Periodic review of cloud adoption objectives and fine-tuning the strategy to accommodate learnings, new models, and remaining agile, is key to success.

We are now on Plateau of Productivity. From no cloud to everything on cloud to real uses of cloud. In this phase, we would see cloud adoption being driven through following emerging trends:

1. True Hybrid cloud adoption - blurring of lines that defined cloud categories - IaaS, PaaS, SaaS or private vs Public cloud. Customer no longer care for these categorization and are clearly more comfortable in a hybrid future. And remember, Hybrid cloud is not a solution but an IT methodology or framework that can be deployed in multiple ways. If I have a business or technology problem, and a certain cloud-based application can solve it - do i really care about the model? Customers are finally adopting applications as per their requirements and letting IT figure out management, governance. Intelligent Cloud and Intelligence on the Edge, further acceleration through 5G and Meta would add a large diversity of devices and experiences in the mix. This is good and bad news at the same time. It is certainly making cloud adoption mainstream but throwing unique management challenges for IT / IT service providers. I am convinced that hybrid, multi-cloud management frameworks would become more commonly adopted in near future. IT Service management as we learned is fast evolving to factor in these hybrid realities.
2. Containers, modern applications and Data - containers are the new unit of measurement of IT. They have now replaced virtual machines, like VMs replaced servers. Servers have not gone away but VMs became unit of measurement, management of IT over last 15 years, and containers are there now. Whole application development, deployment, management, security has started revolving around containers now. Second, data no longer is something that only applications use - it has become an entity. Use cases and scenarios where data is at the core of business solution, rather data is the business solution are getting more and more popularity. Cloud adoption through Infra and migration is counting its last days. Welcome to application modernization and data-driven applications on Cloud.
3. Security - one of the constants in IT! With wider adoption of cloud, off-premise applications and data, blurring of boundaries between Corporate network and Internet, work from home and constantly emerging new threats, security is fast evolving as core to IT and business strategy of organizations. A security threat is no longer risk to IT but to entire organization. Also, newer security solutions using cloud capabilities of big data analytics and machine learning have fast replaced more traditional security solutions.
4. Enterprise SaaSification and Industry Cloud platforms - in my opinion, this is one of the most exciting trend. Cloud adoption has moved from general purpose cloud to industry solutions and platforms. Early signals were popularity of ISVs / SaaS solutions specifically designed for an industry - e.g. Fintech, Edutech, Healthtech, etc. but two relatively newer trends are more interesting - Enterprise SaaSification - large enterprises with deep vertical capabilities, data and homegrown solutions are converting their internal applications into SaaS solutions for others - read customers. Second trend being pursued by every cloud service provider is Industry platforms. Every cloud service provider is investing in building Industry platforms but the winner would be the one who can enrich these platforms with Industry data by partnering with right Industry player.
5. Further Hyper personalization and Meta - in both B2B and consumer space, innovation and mainstream applications of Meta is likely to drive more personalization and newer customer experiences. We would be seeing evolution of customer engagement space. Retail, gaming, communication / collaboration is likely to drive these trends but I anticipate them getting more broad based over next few years.

These are existing times for anyone to be in IT and Cloud space. I hope to go deeper on new age of Hybrid, Industry Clouds and Meta in the next blogs. So stay tuned! Let me know if you agree with the trends or are observing something different / interesting.