Cloud Planning in 2016 – Three Things Every CIO Should Know

A more mature cloud market is easier to predict, but you still need a plan.

Forecasting the trajectory of any technology is really a matter of understanding the near past and present patterns, and then using those patterns to pick the probable direction of the market. The practical reality is that CIOs need to plan. Understanding where the technology is, and where it’s going, is critical to the success of the business. As we approach the end of the year let’s look at what needs to be considered for 2016.

1. There will be more market convergence around the three major public cloud computing players; Amazon Web Services (AWS), Google, and Microsoft.

This one is about as easy to call as the sunset. Enterprises moving to public clouds are investing in these three companies’ products. Moreover, cloud computing is where these big three players are placing their technology bets right now, and this will continue for the foreseeable future.

While many had thought the public cloud market would be a race of a dozen or so providers, the market has been dominated by the cloud giants. Smaller cloud providers, such as Oracle and CA Technologies, could not keep up with the investment needed and have moved to a narrower and more niche-oriented focus.

You can expect anyone who is not AWS, Google, or Microsoft to grab a smaller piece of the market and hold on for dear life. IBM comes to mind. Figure a few other providers, like Rackspace, will move to managed services, while others will offer a specific area of public cloud services, such as “bare metal” clouds, and still others will focus on industry-specific verticals, such as healthcare or finance.

CIOs need to take into account a three ‘cloud player’ race, and take steps to determine which cloud or clouds are right for the workloads they plan to migrate. This means going through a formal TCO analysis (covered next) and vendor selection process, first defining the workload profiles and then backing the appropriate cloud architecture into the requirements of those workload profiles.

There are key decisions that need to be made as part of the planning process. If you need assistance, give us a call. We’ve done dozens of enterprise migrations, and have the data points and models ready to go.

2. Enterprises will become more TCO (Total Cost of Ownership) aware.

The fact is, cloud computing is not always cost effective, and not always a good fit. However, that’s typically not understood until after the deployment of the first few cloud computing projects, when the cost and benefit issues are better understood.

In 2016, CIOs need to become better at running the numbers for the cost benefit analysis of cloud-based platform usage within the enterprise. We’ll hear more about the “cost of risk,” value of resilience, service reuse benefits, and a host of things most enterprises never considered until they got the bill.

As part of the TCO, be sure to consider the value of business agility. Cloud providers are all about agility, and use it to sell the public cloud to enterprises. Likewise, enterprises now understand that value metrics exist for agility, and they’re getting good at defining the worth of agility for internal business cases. CIOs need to be all over this too.

But there is a problem. For the most part, the value of agility varies widely from enterprise to enterprise, so the actual payoff will vary as well.

For example, one aspect of agility is time to market, which cloud computing can compress, because there are no longer extended hardware and software procurement cycles. That means you can rapidly deploy automated systems and quickly bring products or services to market. But shorter time to market is more valuable in some industries, such as high tech, than in others, such as manufacturing.

The challenge is pretty clear. The cloud typically provides value to your enterprise by enabling agility, which can shorten time to market or allow for quick deployments or adjustments to business processes. But you need to determine the actual value of that speed or agility for each business case. There’s no simple formula, as there was in the days of comparing capex to opex. CIOs may find this difficult, but it has to be done.

3. The increased complexity around most enterprise cloud deployments will become even more complex in 2016.

Enterprises typically leverage more than one cloud brand and type. Most have as many as 10 public clouds, including IaaS and SaaS, as well as a mix of some private clouds, and, of course, many traditional systems. Often called multi-cloud, this is really how most enterprises adopt technology, allowing many distributed and loosely coupled project teams to pick their technologies, and then later attempt to centrally manage them all.

Adding to this complexity is the fact that those cloud technologies leveraged by shadow IT are now being passed back to central IT for management. Enterprise IT is ending up with dozens of cloud technologies, many of which provide redundant capabilities. While there is some normalization and migration to a less complex set of cloud services, it’s difficult to migrate from many of these storages systems, databases, and applications platforms. This adds more stress to enterprise IT shops, and will actually become a negative outcome of leveraging cloud-based technologies.

CIOs need to counter this trend by placing better governance and planning cycles upon those who are selecting cloud services or even internal technology. There needs to be a balance between moving to the cloud, and creating more enterprise architectures that are just too complex to maintain, and thus not cost effective.

Whether these predictions come true in whole or in part, the patterns of cloud adoption will change less and less as the technology matures. Cloud has moved beyond a buzzword and become a critical component of enterprise IT strategy. CIOs need to be prepared.

This article originally appeared on Cloud Technology Partners under the title Cloud Planning in 2016 – Three Things Every CIO Should Know