Rethink your IT-Strategy - Public Cloud is here to stay!

Author: Daniel Albisser

Are you still investing heavily in your on-premise IT landscape? What are your reasons for not switching to the public cloud? Public cloud is here to stay, sooner or later it will replace today's data centers and traditional IT services. But cloud adoption in an organization takes time - years rather than days, which means it's best to start here and now and include public cloud as a "must-have" in your IT strategy. A pointed impulse to reflect and inspire.

Current situation in the market and with our customers - advantages of the public cloud are convincing in digitization

The technical capabilities of public clouds are exhilarating: pure innovation and latest-greatest tech as managed services, infinite scaling and arbitrary up/down scaling, more resilience in operation, ... and ideally also certain cost optimization. Public cloud is an absolute game changer for digitalization. With these promises in mind, it's hard to understand why companies don't want to benefit from it, or rather, why they aren't more committed to using cloud. Of course, the road to the public cloud can be bumpy and steep - and for many companies, this step means massive changes in terms of organization and technology. A path with numerous hurdles. But where there is a will, there is also a way. With the right choice of route, the necessary equipment and training, any summit can be climbed. At the very least, every company can benefit from the advantages of the public cloud, even if not (yet) across the board in all areas of the organization.
In early 2020, we published a report on the CH 2020 cloud market in the finance and insurance industry. The conclusion was: despite challenges and initial hesitation, most companies are now moving towards the public cloud to benefit from the many advantages. Now, the end of 2021 is approaching and we see that some companies have not made much progress, respectively have not really moved beyond the start or are even still at field zero. Others, on the other hand, have been going full throttle since the beginning or have gone from 0 to 100 in no time at all in their race to catch up and have thus overtaken many in their cloud adoption.

The path to the public cloud - a tightrope walk between opportunities and risks

As mentioned above, many Swiss companies are slow to adopt the cloud, while others are going full throttle. Why these differences? The path to the public cloud is a tightrope walk with numerous uncertainties. Opportunities have to be identified and risks weighed up in order to benefit from the advantages. What are the reasons why public cloud is not seen as a "must-have" for every IT strategy? Where do companies stand with regard to public cloud? Why is it not really moving forward? The reasons are manifold:

  • Lack of courage for change through public cloud in management
  • FINMA/BAG regulations or internal compliance requirements are slowing down cloud adoption. 
  • Technical complexity with automation, operations and resilience
  • Lack of know-how/skills in the organization
  • Security & data protection: public cloud is often not seen as secure
  • Cost-cutting measures due to Covid-19 or other reasons
  • Benefits are not given
  • Everything is feasible with today's platforms/infrastructure, therefore nothing new is needed.

Our assessment, based on numerous discussions with customers, is that internal compliance requirements, security, and also technical complexity are often cited as reasons for the sluggish cloud adoption. But the main reason is rather the lack of courage on the part of management and ultimately also the will for change through public cloud - in terms of organization and technology. This leads to the fact that no financial resources are spoken for investments in the direction of public cloud.
This is regrettable and too little long-term thinking, because we are convinced that sooner or later every company could benefit from the advantages from the public cloud in their own way. Be it due to innovation power or shorter time-to-market, more focus on core competencies through reduced vertical integration or manufacturing relocations, better resilience in operations as well as scaling or possibly cost savings under consideration of total cost of ownership (TCO).

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Figure 1: Pros and cons (customer view) of the public cloud

Courage and will for the step into the public cloud - A "must-have" in every IT strategy

As written at the beginning, public cloud is here to stay. Why? The many advantages of public cloud over today's IT services massively outweigh the disadvantages. Be it through reduced vertical integration in development, efficiency as well as economies of scale in operations.

Gartner predicts that more than 95% of all digitization initiatives will be implemented on cloud-native platforms in 2025, compared to less than 40% today in 2021.

According to Gartner, the direction of development is therefore clear. This means that the earlier a start is made with public cloud, the sooner the benefits can be reaped and a step towards the future can be taken. This also helps management in particular to demonstrate the benefits of public cloud step by step and to dispel any concerns about changes.
Think big, start small - it is not necessary to go straight to the public cloud with critical personal data or to pursue a zero data center strategy. What is important is to think strategically towards the public cloud and take the organization there step by step, as well as empowering employees, because cloud adoption in an organization takes several years. Many organizations that successfully moved to the public cloud took a SaaS-first approach and started with non-critical workloads on PaaS to make the business benefits visible. In parallel, organizational adjustments were initiated, the cloud foundation was set up with the appropriate governance, employees were trained, and regulatory issues were addressed. This approach solidified the management buy-in and the Cloud Foundation was ready as soon as the demand for public cloud increased and the migration of workloads from the in-house data center was started.

Conclusion - Public Cloud is Here to Stay

Public cloud is the data center of the future. Whether large or small, sooner or later all companies will use public cloud and displace the classic IT services from their own data center. Many large Swiss companies are already developing cloud-native and pursuing radical zero-datacenter strategies with the goal of eliminating them by 2025 - ambitious, but not impossible. This trend will continue. Public cloud is the future and is here to stay. That's why public cloud should play an important role in any IT strategy - an absolute must-have for a successful digital future.

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