by Esteban Herrera

Cloud delivers on outsourcing’s promise—but results may vary

Jun 07, 2016
Cloud Computing Outsourcing Technology Industry

Can companies save money by going to the cloud? The unsatisfying answer is: it depends. The success of cloud initiatives has more to do with the art of how an enterprise promotes its adoption than any exact formula.

cloud hand

I try always to avoid answering an enterprise client’s question with “it depends” because it makes me sound like, well … a consultant. Companies searching for answers to their problems may want a range of possibilities, but they don’t want an imprecise answer.

The reality is, sometimes “it depends” is the best answer. Let’s take, for example, the cloud—the most tested and most proven of the new digital technologies. It used to be I could answer the question “How much will I save by outsourcing my data center?” with a very precise estimate subject to actually going about it the right way (which is my job).

But the cloud is still young enough that I can’t do that. I’ve seen some companies save more than 75 percent by moving aggressively to the cloud. And I’ve seen others save absolutely nothing. There are technical, procedural and human reasons for the variance, about which an entire book could probably be written. But by the time I do that, the technology would have changed. So, instead, I thought I would share some of the key issues that impact today’s cloud initiatives:

1. Don’t build it, for they will not come. The most successful enterprise cloud initiatives look at their applications first, and then look for reasons why each one should not move to the cloud. Not only does this make sense, it avoids the waste of engineering a solution for functionality that, for good technical or regulatory reasons, might never make it to the cloud. This works well, say, for the applications and infrastructure that support a utility company’s nuclear business or a manufacturer’s classified defense programs. And it is why application-first approaches are far more successful.

2. Consider what you are replacing. If you replace your 20-year-old car with a brand new one, you will immediately notice the difference in efficiency, performance, technology, packaging and safety features. The cloud is similar: the more outdated the legacy stuff, the more likely you are to see big differences in performance and significantly reduced cost to operate. But unlike a new car, the cloud doesn’t require a cash outlay to get started. It’s more like a zero-percent-down lease.

3. How do people feel about it? Most people agree “feelings” should not play a part in business decisions, but I’ve seen that they do. Most technologists enjoy tinkering with new tools and seize the opportunity to become skilled in the latest solutions. But a significant number of their peers are resistant to change and are vested in preserving the status quo. Among the most frequent mistakes I see enterprise buyers make in their cloud initiatives is ignoring or underestimating the need for organizational change management.

4. Get real about the objections. Of course, some obstacles are legitimate, but organizations tend to accept “no” too quickly. The regulatory obstacles are not as big as they seem, and the pace of change in technology means the architectural ones aren’t either. The best way to guarantee you get no benefits from the cloud is to block the programs that promote its adoption.

I’ve come a long way from being a cloud skeptic myself. While I still maintain that dynamic provisioning and smarter application architecture are the true innovations of what we call “the cloud,” arguing the semantics is beside the point. What I do believe is that cloud solutions do a better job of delivering on the promise of outsourcing than outsourcing itself. Deploying an up-to-date, standardized, flexible, cost-effective, constantly improved and shared asset on behalf of corporations has been outsourcing’s pitch from the beginning. But it took this thing we now call the cloud to deliver on that promise, even though, as they say, results may vary.