A survey published by Infosys Knowledge Institute suggests that the primary reason organizations are embracing cloud computing is no longer just about lowering costs.

The survey of 876 executives from organizations with over $1 billion in revenues operating in the U.S., Europe, Australia, and New Zealand, finds that cloud adoption is being driven by emerging technologies (50 percent) and competitive activity (49 percent), followed by reducing overall IT costs from leveraging pay per use models (45 percent).

Cost issues are becoming trickier to navigate as organizations start to realize that certain classes of workloads wind up being more expensive to run in a public cloud versus an on-premises environment. This is because a public cloud charges customers based on consumption, while in an on-premises environment, the customer typically owns the infrastructure. Due to these costs, there are now concerns that more instances of application workloads that were deployed in the cloud will be “repatriated” back to an on-premises environment. 

Where cost tends to be less of a factor is areas where the internal IT organization clearly lacks the necessary expertise required to run that workload. For example, most internal IT organizations don’t have the knowledge required to successfully deploy so-called cloud native applications based on Docker containers running on Kubernetes clusters.

Cloud workload flexibility is on the rise

The Infosys survey also finds that many organizations are becoming more flexible when it comes to determining which workload runs where. A full 94 percent of the survey respondents said their organization has a stated enterprise-wide cloud strategy. However, only  half (49 percent) said that strategy is well-defined and followed diligently. Another 45 percent stated it exists only as a guideline and that business functions or regions have flexibility to develop their own IT strategy. Organizations may have a “cloud first” strategy by the degree to which that statement reflects a mandate or suggested preference varies widely.

The survey finds that just over half of the respondents (51 percent) have extensively adopted cloud services. Another 19 percent are moving in that direction, while 19 percent have a more silo-based approach. Only 11 percent characterized their reliance on cloud services as being low. Survey respondents identified aligning legacy systems with their cloud strategy to be the biggest challenge they face (59 percent).

The fact that organizations are starting to appreciate the value of cloud computing in way that goes well beyond cost is generally a good thing for managed service providers (MSPs). MSPs would be well-advised to evaluate their customer motivations for moving to the cloud. If too many customers are focused purely on cost, chances are those customers are not going to yield as much profitable revenue as a customer focused more on innovation. 

Arguably, the best news for MSPs is that cloud computing is becoming more complex. The first phase of cloud computing, which saw organizations essentially lifting and shifting their existing IT environments into the cloud, is finally coming to an end. The next phase will utterly reinvent how applications are built and deployed. MSPs that have the cloud native skills required to manage those emerging cloud technologies will soon find demand for their services outstrips even their most rosy of expectations.

Ready Set Managed

Photo: kentoh / Shutterstock

Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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