Craft a Cloud Strategy to Optimize Value

Maximize the benefits of the cloud with a strategy that clarifies the cloud’s role in delivering IT-driven business value.

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Maximize the Benefits of Cloud Computing

Almost every organization uses cloud computing, but many do so without a documented strategy that answers what the organization does in the cloud and why. Without that, you won’t maximize the benefits of working in the cloud. The Gartner roadmap, equips CIOs to develop a concise cloud strategy document by following steps to:

  • Align objectives about the cloud
  • Develop a cloud action plan
  • Prepare the organization for execution
  • Establish governance and mitigate risk
  • Optimize and scale

Leverage Gartner’s Cloud Strategy Approach

A cloud strategy communicates “what” you are doing in the cloud and “why” you’re doing it. Gartner has tried and tested the following best practices for an effective strategy.

Craft the cloud strategy in partnership with leaders across the organization

The cloud strategy is a concise point of view on cloud computing and its role in your organization. It should be a short and living document of between 10 and 20 pages. It should work in conjunction with other strategic plans, starting with the organization’s midterm corporate strategic plan, as well as with related strategic plans for the data center, security, procurement and so on.

To effectively guide decisions, the cloud strategy requires support and sponsorship across the organization — including with stakeholders in business units, other technology departments and in functions such as operations, finance, legal and sourcing. Organizations that successfully craft a cross-discipline cloud strategy are more likely to succeed and realize full benefits with their cloud initiatives than those without one.

To formulate that cross-discipline strategy, start by forming a cloud strategy council with members from different teams who can share perspectives from across the organization. Most organizations build their councils to include a variety of IT and functional roles.

Each member of the council has a role to play in crafting the strategy and advocating for it, depending on where they sit in the organization. Procurement, legal and risk management, for example, can assess cloud transitions and highlight their implications. Human resources can help sell the transition to the workforce, and help identify and address cloud skills requirements. Finance can assess the financial implications of the cloud strategy and approve the savings and efficiencies.

These council members play a particularly important role helping to align the cloud strategy with existing strategies and other supporting elements of the business. Cloud computing doesn’t exist in a vacuum. The cloud strategy must align, and not contradict, with the strategies for security, data center, edge computing, and development and architecture, as well as for talent development.

Create baselines for cloud computing and the desired business outcomes

The cloud council should begin the strategy development process by establishing baselines for cloud computing and the business.

Cloud Computing Baseline and Terminology

Eliminate confusion by agreeing on cloud computing definitions and using them consistently. The U.S. National Institute of Standards and Technology (NIST) has created a set of definitions, as has Gartner. Newer cloud computing terms, such as cloud native, multicloud and distributed cloud, aren’t as well established. If you use them, clarify their meaning. In general, it’s better to use existing terms when you can.

Business Baseline and Goals

The business baselines refer to the top-level business strategy and desired business outcomes, as well as business transformation initiatives. Use annual reports, speeches by senior management and conversations with business leaders as sources.

Then highlight how cloud computing could benefit these outcomes or initiatives or put them at risk. Frame the discussion in terms of known business goals, such as cutting/cost-efficiency or agility/innovation, and assess the ways in which cloud computing can help achieve them.

Examine issues unique to your organization. For example, explore the following questions:

  • What is your business trying to accomplish in your industry and region?

  • Does your cloud strategy need to align with a data center strategy?

  • What extenuating circumstances exist?

  • How will the cloud strategy affect (or be affected by) uncertainties, such as the climate crisis or other similar events with far-reaching impacts?

Wrap up the baselines section by mapping business goals to the potential benefits of cloud computing and explaining how to overcome any possible challenges.

Explicitly state the principles that will guide your cloud strategy

Decide which principles you will use to make decisions related to cloud strategy and investments. Examples of common cloud principles include:

  • Cloud first

  • Buy before build (which, as related to the cloud, is often called “SaaS first”)

  • Best of breed

  • Multicloud

Being “cloud first” is often misunderstood. It doesn’t mean everything goes to the cloud. It means that when you want to renew, enhance or build something, the default approach is to use the public cloud. Cloud first also means you should consider the cloud as the first option for any new technology or business initiative.

You may want to include justification for a given principle. For example, if one of your principles is that “lift-and-shift migrations to the public cloud should be a last resort,” explain that they do not generally deliver significant value unless there is an extenuating circumstance — such as a data center closure requiring IT to find a home for things.

Your principles may also include any vendor-oriented considerations, such as positive relationships or investment in skills.

Other considerations that may play into your principles include:

Services Strategy

Your organization will need to decide when it will consume cloud services from a public cloud provider and when it will build — or continue to maintain — capabilities on-premises or elsewhere. Distinguish the use cases for infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS).

Address scenarios in which you may want to be a broker, and how to have a hybrid IT operating model in which you simultaneously consume services, act as an intermediary and provide services. Ask and answer the question, “How do we secure, manage and govern the hybrid environment?”

Financial Considerations

Cloud computing comes with significant financial implications, which IT leaders should understand and consider in their principles. Don’t believe the biggest myth about the cloud — that you always save money by moving to it. Instead, examine issues such as cost transparency, visibility, budgeting and predictability.

Organizations typically fund cloud computing from operating expenditure (opex) rather than capital expenditure (capex). However, changing everything to opex may change your organization’s financial profile. Also, IaaS is mainly aligned with hardware costs, so the prices have tended to go down slowly (inflation may be changing this), but SaaS operates as a subscription model that tends to go up. Having a cloud council member from finance can help you understand these implications and how they may influence your principles.

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Inventory your workloads so you have clear information to make decisions

Because your cloud strategy is workload by workload, you must inventory each workload (and the corresponding grouping of applications) and gather a set of information about them so you know what is already on the cloud and what is a good candidate to move to the cloud.

The types of information you want to gather in the inventory include, what is your goal for that workload? Is it to save money or is it to be more agile. 

Gather some basic details, including:

  • What’s the name of the workload?

  • Who owns it?

  • Who authored it (if you wrote it in-house)?

  • Does it depend on other applications?

  • Is a vendor involved?

  • Is it a packaged application from a vendor?

    • If so, what do you need to know about that? (For example, if you’re on the last on-premises version from this vendor and you want to upgrade, do you have to go to its SaaS version?)

  • Is it virtualized?

  • What are the security, governance, compliance and data requirements?

  • Does it have personally identifiable information and security requirements?

  • Does it have special integration or location requirements?

  • What’s the goal: efficiency or agility?

If a workload or application seems like a good candidate for the cloud, analyze performance characteristics along the following spectrum from unpredictable to well-behaved applications:

  • Unpredictable workloads. These are externally facing, and their demand is hard to predict, such as a website, a mobile app or an API gateway. These are generally good candidates for public cloud.

  • Well-behaved applications. These could be typical enterprise applications that are already virtualized and running efficiently in your data center. They don’t vary much and don’t have peak workloads. Such predictable workloads don’t typically benefit from cloud and aren’t the first choices to move.

  • In the middle. The middle of the spectrum includes workloads that have a peak for which you must overprovision. Assess the merits of moving such a workload to the cloud.

10 common pitfalls can limit the success of your cloud strategy

1. Assuming it’s an IT (only) strategy

Involve cross-functional peers as equal partners in shaping the cloud strategy and governance. Cloud adoption will impact every function in the organization.

2. Not having an exit strategy

An exit strategy outlines considerations regarding extricating yourself from a cloud decision if you need to. Some regulators are mandating an exit strategy.

3. Combining or confusing a cloud strategy with a cloud implementation plan

Many organizations confuse a cloud strategy with a cloud implementation plan. A cloud strategy comes first and is where you document the role that cloud computing will play in your organization. A cloud implementation plan puts the cloud strategy into effect.

4. Believing it’s too late to devise a cloud strategy

Many organizations believe it’s too late to devise a cloud strategy if they’re already using cloud computing. But it’s better late than never to formally define the cloud’s role in your organization.

5. Equating a cloud strategy with “We’re moving everything to the cloud”

Having a cloud strategy doesn’t mean you are moving everything to the cloud. Many organizations assume this and avoid creating a strategy out of fear that they’ll be forced to use cloud computing for everything.

6. Saying “Our cloud strategy is our data center strategy” or “It’s all in or nothing”

Many organizations confuse their cloud strategy with their data center strategy, but the two should be separate.

7. Believing that an executive mandate is a strategy

Many organizations adopt cloud computing because the CEO, CIO or the head of a business unit believes that doing so will result in cost savings. However, cloud computing doesn’t always save money, and this objective alone shouldn’t form the basis of a cloud strategy.

8. Believing that being a <fill in vendor> shop means that is the cloud strategy

Organizations that consider themselves to be a <fill in your favorite vendor> shop may follow that vendor’s cloud offerings. But not only is this not a real strategy, it also doesn’t take into account the multiple types of cloud services, such as IaaS, PaaS and SaaS. If you take a broad view of cloud computing, it’s almost impossible to source all your cloud services from one vendor.

9. Outsourcing development of your cloud strategy

Outsourcing your cloud strategy may sound attractive, but don’t do it. Devise your own cloud strategy to align it with your organization’s strategic plans.

10. Saying “Our strategy is cloud first” is the entire cloud strategy

Cloud first is an excellent principle for many organizations within the overall strategy, which is broader.

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