Clouds on the Horizon: Keys to Choosing the Right Cloud Vendor

hand holding cloud

From “born in the cloud” startups to leading technology organizations, Cloud has become a powerful, disruptive force across industries and throughout the marketplace. The reasons are clear: On the one hand, Cloud quickens the pace of time to value; on the other, it increases business agility to react to changing market demands and emerging opportunities.

However, deploying successful cloud services is an arduous challenge for most IT organizations, as they struggle to deal with issues regarding adopting at scale; migrating services alongside existing platforms; ensuring data compliance and avoiding vendor lock-in. According to KPMG’s new Clouds on the Horizon report, there are essential considerations to keep in mind when choosing cloud vendors and sorting through the challenges and complexity of cloud adoption.

“Successful cloud deployment challenges traditional IT thinking and requires changes across the entire organization – from people, processes and technology,” says the report. “It is easy to be enamored by technology advancements but focus should remain on developing consistent strategic principles for cloud adoption driven by business value.”

The biggest challenge when it comes to deploying Cloud is defining what the strategic objectives are, adds David Conroy, a managing director in KPMG's CIO Advisory practice. “It’s an amorphous term,” he explains, pointing out that while cloud is often bandied about as a single thing, it actually ranges from private cloud offerings with cloud-like data center approaches to public cloud offerings such as Amazon, in which an organization procures services directly from a vendor.  There are also fundamentally different flavors of cloud, such as IaaS — an on-demand version of the data-center services IT organizations have always bought; SaaS, which may seem deceptively simple since IT may not always do the purchasing; and PaaS — the most complex and transformational option which may underpin the company’s entire IT ecosystem.

Each may seem like compelling, easy-to-deploy propositions, says Conroy, but each also come with hidden costs and complexities. “The challenge now for the CIO as business leader is: are you exploiting opportunities based on choices you’re making today or are you basically creating your own roadblocks?”

Choosing the Right Cloud Vendor                                                        

In order to evaluate potential vendors, no longer is it enough to know how many years a solutions provider has serviced clients and its position in research firm quadrants. With hundreds of emerging cloud start-up entrants and rapid transformation across the cloud vendor landscape, it has become a major challenge for the CIO and IT organization to determine whether a CSP is a good fit.

In Clouds on the Horizon, KPMG has developed a CSP evaluation framework consisting of eighteen representative criteria organized into three categories including innovation and value (evaluating in terms of cost and how well the solution meets business requirements); operational capabilities (evaluating in terms of transition from on premise to the vendor’s ability to provide support); and security and compliance.

All of this can vary by the “flavor” of the cloud being implemented, says Conroy. With IaaS, for example, “you’re looking at a commodity capability,” he explains. More than just comparing price points, there are additional non-functional requirements to consider, including scalability, resiliency and automation. 

CSP selection criteria get even deeper with PaaS and SaaS, as the transformational aspects of cloud are only just emerging, he adds, such as making sure the organization is strategically aligned with the vendor. “Depending on the size of organization, I’d argue that the strategic alignment of the cloud provider is going to become one of the most important components of decision making,” he says. “The conversation needs to be around, ‘What is the roadmap?’ ‘Where are these providers taking their offerings?’ ‘Are there co-investment opportunities?’ IT organizations need to feel confident in the longevity of the offering but also see an opportunity to gain a competitive advantage, he explains: Can the provider keep pace and support your future needs? Does the vendor have the scale to support the migration?

Wrapping around all of that are decision-making issues related to regulation and compliance. “This is another area where we’ll see innovation in the future,” says Conroy. Overcoming the perception of risk regarding losing IP and feeling confidant that the right safeguards and partnership is in place is key, he explains.

Top Tips for CSP Success 

Choosing a CSP is not the end of the cloud migration process: According to Clouds on the Horizon, there are a variety of other important factors to consider and pitfalls to avoid in order to attain success: Managing the migration, monitoring migration costs, planning an exit strategy, automating where possible and controlling growth, for example. 

The most significant factor, however, is to truly understand that running cloud IT is not the same as running an on-premise data-based environment. It is a completely different operating model, Conroy emphasizes. For example, it is historically rare for the IT organization to consider which applications can be switched off for the weekend — but in the cloud world, there is a great deal of opportunity for provisioning and automating that would allow for applications to be off, which goes straight to the company’s bottom line.

Overall, IT organizations need to consider how they can adapt to manage the cloud environment and control growth and costs, says Conroy. “How can you put in place a service catalog that allows you to exploit the agility that cloud brings, but without unforeseen costs and expenditures?” The CIO and IT organization now needs to broker these agreements, which puts a whole different pressure on the traditional governance model.

“If you fail to adapt your governance and operational and data process to reflect this reality and exploit the capabilities of the cloud world, you leave yourself open to risk and potentially leave money on the table,” he says.

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