Any modern business knows cloud is the future. We are told over and over again of the need to embrace cloud to move at speed, provide scalable infrastructure, and meet the on-demand needs of customers. A recent report from IDC revealed that cloud spend has overtaken traditional infrastructure spending for the first time. Research from Apptio recently found that 92% of IT professionals prefer using cloud to on-premises solutions, primarily viewing cloud as a way to expand IT from a back-office function to a business enabler and driver of growth.
However, traditional infrastructure shouldn’t be discounted entirely for a move to cloud. Despite what you may hear now-a-days, there are still situations when using on-premises infrastructure is the smarter business decision. For example, some financial processes cannot be done in the public cloud (and sometimes even any cloud service) due to regulatory and security concerns, while using cloud services generally requires handing over some responsibility and control over processes to an external vendor. And cloud, when being managed without a constant eye on usage and consumption, can be a massive shock to the IT bill.
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The resulting challenge for CIOs and IT leaders is an intricate balancing act of weighing the benefits of both on-premises and cloud to deploy both strategically according to varying demands of the business. In practice this requires a carefully-curated strategy, combined with a full overview of all IT infrastructure within a business.
Over my conversations with hundreds of CIOs across Europe, I have learned three steps IT leaders can take to balance cloud and on-premises more effectively to create a data-driven hybrid IT strategy.
The 70/30 split
Both cloud and on-premises have clear strengths. Cloud provides convenience. Once set up and running, it requires less direct attention from IT teams, while the scalable nature means that it is easy to quickly adapt to fluctuations in demand for compute, allowing more time to be spent on driving innovation and business value and less on managing resources.
Meanwhile, on-premises allows organisations to have direct control over workloads. In fact, recent Apptio research found that 41% of IT leaders say on-premises provides more agility than cloud due to this, while more control is also afforded over rewriting and refactoring costs. For certain vital areas of the business, this can be extremely important to ensuring efficient operation, especially when measured against the massive cost of migrating everything to the cloud.
So then what’s the best mix? According to IT leaders, business should invest in 70% cloud computing with 30% on-premises infrastructure. This is because it allows speed and control, while managing costs effectively.
IT is no longer there to keep the lights on and back-end of the business functioning, but to drive technological innovation and growth. Shifting a majority – but not all – of workloads to the cloud both allows business units to use cloud on an as-needed basis for improving their operations, while maintaining a core of on-premises investment ensures overall operation is maintained and closely controlled.
Beware of cloud sprawl
Ensuring this careful balance isn’t disturbed can be a challenge. One of the largest concerns for IT professionals is the potential for cloud sprawl, with 73% listing it as a problem within hybrid systems.
When there are ungoverned instances of cloud usage (and therefore spending) within an organisation, it’s incredibly challenging to not only keep track of where investments are taking place, but also have a cohesive IT strategy that can adequately support the broader business goals. Cloud sprawl happens when individual business units use or invest in cloud, usually due to very department-specific demands. For example, Expensify’s January Spend Trends report found that software is rising in popularity as a business expense, often outside of IT’s knowledge.
This can cause a number of problems which impact the effectiveness of an organisation’s hybrid IT strategy by offsetting the balance of cloud and on-premises usage. It can also lead to costs falling outside of the overall IT budget, meaning there’s no guarantee on the value being delivered – an individual department may be missing out on beneficial pricing if other areas of the business are using the same or similar software.
When a hybrid IT strategy has been developed on the basis that migrating all workloads to the cloud could be too expensive, ungoverned spend on cloud instances can offset any benefits gained from hybrid IT.
Cross-business communication is key
How can IT ensure that a hybrid strategy is understood and followed across the business? One of the greatest strengths in using a hybrid approach is that it can help a business to grow, instead of just helping to run standard operations. To be effective, this requires regular cadence of communication between end-user departments and IT. Different business units will have differing requirements, and it’s up to IT to work in cooperation with each one to figure out the need.
However, forty-one percent of IT decision makers have said that decisions about using cloud are being made within a silo; that is, with either IT or a business unit making decisions about purchasing cloud services without involvement from the other.
This challenge is one that organisations need to address head on if hybrid IT is to provide the most value. Cloud sprawl, as discussed above, is but one symptom of a disorganised and siloed approach to cloud. IT expertise is needed to support business units in ensuring that all cloud usage is governed appropriately and accounted for within budgets, staffing and security measures.
Similarly, IT needs to consult with business units to ensure that a hybrid IT strategy truly benefits them. The adaptability that it provides is lost if a one size fits all approach is applied universally across the business, as different areas of the business will benefit from differing mixtures.
A shift towards hybrid cloud needs to be accompanied by a culture shift throughout the business which allows for joint communication and understanding of hybrid IT and the agreed upon approach to reduce the number of decisions being made in silos.
Embracing the hybrid IT mindset
Creating and managing an effective hybrid IT strategy is no mean feat, but IT leaders have the capabilities to do so by embracing a holistic, cross-business mindset. Cloud spend is already hitting record levels, and with this set to only continue increasing, businesses need to get a clear view of what their hybrid strategy ought to be to manage costs and operations.
The results in this article were taken from, "The New CIO Embraces a Hybrid IT Mindset: Why cloud is a part of an innovation strategy, but not the driver”, a report produced by Apptio following an independent survey of 100+ technology leaders.
Henrik Nilsson, RVP EMEA at Apptio
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Henrik Nilsson is the Vice President EMEA at Apptio. Prior to Apptio, he was the Regional Director, Enterprise Solutions at CA Technologies.