A survey of 510 senior executives from Global 2000 organizations suggests that cloud migration initiatives have stalled at the intermediate stages of the project due to concerns around cost, lock-in, meeting budgets, and timeline constraints.
Conducted by HFS Research on behalf of IBM Consulting, the survey found that less than a third of the respondents have met budget and timeline expectations and nearly all (95 percent) expressed some regrets over their hyperscaler contract. Only a quarter (25 percent) were able to identify a solid return on investment (ROI) based on the business benefits versus a soft or deferred ROI to justify their efforts.
Heading into 2024, there is a clear opportunity for managed service providers (MSPs) to help many organizations push cloud migration projects over the proverbial goal line.
The cost of migration now may outweigh the benefits
Despite the issues sited, cloud transformation still ranks among the top three critical investments for 60 percent of survey respondents. The challenge MSPs should be mindful of is that the ultimate outcome is worth the effort, and decisions about which workloads to migrate were made for reasons well beyond the technical merits.
For example, it’s not uncommon for some organizations to mandate that all workloads, regardless of type, will move to the cloud. The primary driver of those decisions often has as much to do with perception than reality, given the fact that many long-running legacy monolithic applications are less expensive to run in an on-premises IT environment. In fact, the survey notes that less than a third of cloud initiatives (32 percent) are funded by IT teams. The rest are funded by business units that don’t always appreciate the technical nuances involved in making that decision.
In addition, a fair number of enterprise IT organizations are now dealing with the equivalent of a cloud hangover in the wake of the COVID-19 pandemic. Not too long ago, there wasn’t really any place to build or deploy applications other than the cloud because access to data centers was limited. Most IT teams were working from home, so almost every application was deployed in the cloud, no matter the cost. Now, many enterprise IT organizations are looking to revisit those decisions at a time when pressure to reduce the total cost of IT is mounting.
Proceed with caution to achieve full potential
Of course, it’s never easy to step into the middle of any cloud project, so MSPs will need to proceed with a certain amount of prudence. Many of the initial assumptions an organization has made may not be valid, so it might take some time for them to come to terms with reality. This is especially true if members of that organization continue to cling to beliefs more than mathematics.
In the meantime, MSPs should expect to do a fair amount of customer counseling in 2024 as it becomes apparent there is much more nuance to cloud computing than many may have initially appreciated. The challenge and the opportunity now are to determine how best to proceed in a way that enables everyone involved, saving as much face as possible.
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