Cloud Challenges Offer Opportunities for Providers

Companies face difficult decisions in their cloud strategy, but cloud providers can help.

Company decision-makers know that migrating to the cloud offers significant benefits but also presents challenges. These challenges can completely alter the trajectory of a company’s cloud journey if not addressed. As a result, companies need to know what these cloud challenges are to improve planning and implementation. Foundry (formerly IDG) recently released a cloud study that addresses these challenges.

The study discovered (and, for some organizations, likely confirmed) several common obstacles present in cloud transformations. According to survey respondents—IT decision makers (ITDM)—companies are spending more on the cloud. Budgets are set to increase over the next few years as more infrastructure moves to the cloud. Consequently, cloud service providers have an opportunity to offer better services to customers by providing expertise alongside their services. Here are their three biggest opportunities.

Organizations want guidance for managing costs 

The study confirmed that cloud adoption does have a positive impact on revenue despite obstacles. A majority of ITDMs from both enterprise level and small/medium organizations reported sustainable growth over the past 12 months. This is encouraging.

However, the study indicates that organizations are having trouble controlling the costs associated with these cloud deployments. In addition, migration costs themselves also seem to be a significant barrier to realizing the full potential of cloud investments. Nearly all respondents reported significant challenges to their migration plan across organization size, budget, and industry.

Companies want help from their cloud providers and strategic partners not only in understanding cloud costs but managing them. Without this guidance, the cost of migrating and operating within the cloud will continue to impede progress and erode any benefit to a company’s bottom line. Technology providers can fill those gaps with better-structured pricing, transparent usage costs, and more guidance.

Security and privacy are equally concerning

35% of ITDMs cited data privacy and security management as a primary concerns. Another 34% noted that their organization did not contain the in-house expertise to address and manage these concerns properly. 

If companies lack the resources to govern and secure cloud resources properly, they’re less likely to use the cloud to its fullest potential. IT teams will need more expertise to address these concerns in the coming months and years. And considering the talent shortage outside big tech-focused companies, this concern may not go away very soon.

What could happen is that cloud providers could find themselves in the position of providing that security expertise. Whether it’s included in the pricing structure itself or they begin to offer bespoke security guidance, companies would likely embrace the help. 

And the study itself seems to confirm this. It notes that ongoing support will be a key differentiator as more cloud providers emerge and companies shift more of their attention and resources to what the cloud offers.

Finding talent is a continual cloud challenge

The survey notes that many benefits will keep companies coming back to a cloud-first strategy. However, accessing talent and expertise could help accelerate the shift and manage future roadblocks. Companies are already giving a significant portion of operations over to the cloud, and that isn’t going to slow down.

Cloud providers could find themselves more in the SaaS/PaaS space as cloud mentors instead of simply providing a service. Companies want to grow and change with the cloud but also understand how to implement their goals in the short and long term. 

Change management and batch or incremental migration can mitigate rising costs or accidental security loopholes. But it also means that cloud providers will need to move into a strategic partner space for more companies than just the largest enterprises.

The study notes that only 40% of companies consider their current cloud provider(s) to be a strategic partner. Developing this relationship could help cloud providers begin to offer a cloud service that their clients both want and desperately need in a long-term relationship.

Cloud providers may also find working together consistently a growing need. Very few companies are leveraging a single cloud partner, according to Foundry. As such, integration within the multi-cloud space could require more cooperation down the line from the providers themselves.

Organizations need more assistance overcoming cloud challenges

Despite challenges and concerns, lack of expertise, and cost surprises, nothing in the survey suggests a slowdown. Companies will continue to increase their budgets because they recognize that the cloud offers significant potential. Even with significant obstacles to full migration, they’re pressing forward.

The percentage of companies with all or majority of operations in the cloud will jump in less than two years. The survey predicts that number to move from today’s approximately 41% to 63% in just the next 18 months. In addition, 72% of companies default to cloud base services when upgrading existing systems or purchasing new tools.

Cloud service providers are in a unique position to help shape migration strategies and long-term decision-making. Whether companies are adopting a single cloud or the more popular hybrid/multi-cloud approach, they need expertise from providers that they don’t have in their in-house teams.

Growing areas of the market seem to be:

  • Software as a Service
  • Platform as a Service
  • Security as a Service 
  • Infrastructure as a Service
  • Cloud-based analytics

And it’s no accident that the top four are as-a-service models. If providers can offer simple solutions for long-term management, they’ll be better positioned to take advantage of the market. And organizations that can find this type of guidance could shorten the migration curve and eliminate its growing pains.

The Foundry Cloud Computing Survey received responses from over 850 IT decision makers in a variety of industries and organization sizes. You can download the full results by filling out Foundry’s request form here.

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