As Cloud Services Mature, Three Key Lessons Learned

Now that cloud computing has reached maturity, some important long-term lessons learned have become apparent.

New survey data reveal that some of the initial concerns about cloud and on-premises data and app integration, and unifying the user experience, continue to be significant challenges. Yet IT governance and the maturing of managing technology have led to a surprising modus vivendi between the data center jockeys and their business customers.

A Harvard Business Review Analytic Services poll in the fall of 2015, about cloud implementation experiences, yielded 341 respondents from around the world (48% from North America).  The vast majority of the respondents were line of business managers; only 16% were from IT.  And almost all of the respondents were from large organizations– 83% of respondents work for organizations with at least 500 employees.

Indeed, almost 20 years after salesforce.com launched and a decade of experience with SaaS, IaaS, PaaS, and other cloud based services, public cloud has matured to the point where a majority of respondents said their organizations had adopted a public cloud first strategy for at least some new applications. In fact, only 22% of survey respondents said a cloud-first strategy was unimportant.

They cited all of the usual reasons why their organizations were looking to cloud first – cut IT costs (66%), increase responsiveness of IT (53%), decrease time to market for new initiatives (47%) and reduce apdev cycle times (46%).

And they cited all of the usual types of cloud applications as their preferences – personal productivity tools like email, apdev platforms, analytics, big data, customer relationship management (a.k.a. Salesforce.com). And it will come as no surprise that key mission critical apps like financial records remain least likely to be on the public cloud.

Key lesson one: Challenges persist in linking enterprise data to the cloud applications

As for the integration challenge, 61% indicated that it remains a major pain. In fact, a quarter of the respondents said that at least one cloud application project was abandoned due to the inability to link enterprise data to the cloud applications.  While I expect that proportion to decline over time, due to improved tools and smarter implementation teams, it will remain a challenge.

An important corollary to the need to integrate external cloud apps to internal on premises data is the fact that we now have a two-way challenge. The rise of XaaS means that many organizations now have valuable data in the cloud that needs to be accessed by their on-premises systems.  Around half of the HBR AS survey respondents say they have already achieved cloud to on-prem nirvana, while another 20% are trying to implement that direction now. 

However, there’s a big caveat about the cloud to on prem data flow – only 36% are satisfied with their ability to do this.  Note that most respondents are lukewarm about their ability to integrate cloud data into their internal systems; only 10% say this is a nightmare.

Key lesson two: Consistent user interface is important

Almost three out of four survey respondents say having the same interface and experience are important. Providing the same type of user interface for cloud as well as internal apps may mean updating the internal on prem app. In many cases old enterprise apps have user interfaces from the Dark Ages and the juxtaposition with modern cloud app interfaces will drive users nuts.  That may turn out to the be easier user experience to fix.

The bigger challenge is single sign-on and otherwise making the XaaS app as easy to access and use as the internal apps. Most of the big ERP vendors claim they’ve conquered this challenge, but it does require a lot of internal IT support as well as cooperation among all of the vendors and consultants.

Key lesson three: IT/Business collaboration in the cloud world has come a long way

One of the biggest pleasant surprises of the survey is how IT and its business clients are collaborating when it comes to cloud and on-premises implementations. After many decades of hearing business users complain about IT as unhelpful, or even hostile to business users’ need for easy to use and low cost systems, the survey data paint a picture of almost idyllic cooperation.

For example, three quarters of respondents say IT helps implement public cloud implementations. Only 11% said IT hinders cloud adoption. I remember when those percentages were reversed.

And while many CFOs and others with risk management as part of their job descriptions worried that shadow IT implementations via the cloud would create enormous data headaches, the vast majority of organizations rely on their IT department to manage cloud. Only 15% of survey respondents said their departments manage the public cloud implementation, integration and other parts of the relationship. Everyone else says that IT is involved in public cloud. In fact, almost half say IT provides a turnkey public cloud support, as you can see from this table:

 In fact, it appears that the IT/LoB relationship has been strengthened by cloud, not damaged by it. Initially there was a lot of LoB frustration with IT recalcitrance to embrace or even support the cloud, which led to a lot of maverick systems and other business tactics to avoid IT. That’s all changed, though, as the technology, people and business practices have matured. Currently half of the respondents say IT/LoB collaboration has improved, while 41% say no change.

The level of cooperation between the business side and IT when launching a public cloud project is a big, pleasant surprise, too: Only 14% of organizations said that LoBs played the role of mavericks and selected back-door public cloud apps:

The two-way street when it comes to collaboration is also seen when it comes to the almighty veto power – only one third of organizations have given IT veto power over business side initiated public cloud deployments:

Of course, this level of collaboration and cooperation is achieved via governance policies and joint LoB/IT committees at most organizations. Another measure of the level of cooperation these days: Only a quarter of respondents’ report that their CFOs have implemented financial control policies to block shadow IT.

Before everyone reading this starts singing Kumbaya and celebrating the end of IT/business hostilities after 40+ years, there remains one huge concern – cloud security and compliance with regulatory requirements. The majority of respondents appear to be relatively satisfied with the level of security of their cloud apps and data (only 20% were totally freaked out by what their IT departments and XaaS vendors have done). Yet only 42% were highly confident that their hybrid implementations met all security and regulatory requirements.

While it’s a bit scary that, after two decades, a majority of business users remain concerned about their implementations’ meeting security and regulatory requirements. That fact does present a continuing opportunity for IT pros, consultants and vendors. As well as for most organizations’ internal auditors.

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