Industry Briefs

Immediate Cloud Gains Pack a Long-Term Punch

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Immediate Cloud Gains Pack a Long-Term Punch The 451 Take 451 Research is a leading information technology research and advisory company focusing on technology innovation and market disrup- tion. More than 100 analysts and consultants provide essential insight to more than 1,000 client organizations globally through a combina- tion of syndicated research and data, advisory and go-to-market services, and live events. Founded in 2000, 451 Research is a part of S&P Global Market Intelligence. W W W . 4 5 1 R E S E A R C H . C O M While the notion of 'cloud transformation' implies a sweeping change, cloud adoption does not need to be disruptive to the organization. In fact, near-term initiatives (such as new application development) and cyclical projects (such as technology refreshes) offer great opportunities to socialize cloud technology at the team level, achieve buy-in from stakeholders and inform larger-scale planning for moving the business forward. With the right catalyst, IT departments eager to make the move to cloud – and thereby reap advantages such as lower costs, increased flexibility, improved customer experience and greater service innovation – can develop a solid footing for the longer-term journey. Far from being a haphazard endeavor, first moves should be made with an eye toward leveraging the flexibility and capabilities of cloud environments to help teams focus on accelerating transformation. Cloud Benefits Range From the Immediate to the Longer Term Source: 451 Research's Voice of the Enterprise: Cloud, Hosting & Managed Services, Organizational Dynamics 2019 Q. Which of the following benefits has your organization experienced as a result of your use of cloud services? Q. Which of the following has been the most significant benefit from use of cloud? Cost savings is a common motivation for shifting IT resources to cloud. Data from 451 Research's Cloud Price Index shows that, on average, achieving the same total cost of operations for an on-premises deployment versus cloud requires high utilization (58%) and engineering efficiency (460 VMs per engineer). While some workloads may not yet be able to cost-effectively make the move – due to legacy dependencies or compliance needs – many can and should be transitioned out of company-owned on-premises datacenters. Starting sooner rather than later on the migration path can yield immediate results and benefits for the organization. 451 Research's Voice of the Enterprise data shows that companies with a transformation plan in place are more likely to cite the benefits of faster product innovation (56%), improved productivity (49%) and greater customer satisfaction (18%) as advantages of cloud deployment. At the same time, these companies are better able to adapt to changing conditions: according to 451 Research's March 2020 Coronavirus Flash Survey, 54% of companies that started their digital transformation earlier are more likely to feel 'totally equipped' to handle new policies resulting from circumstances surrounding the pandemic, and they expect to be able to function longer (six months or more) without major disruption to their business. 45% 42% 36% 25% 25% 15% 12% 9% 8% 6% 4% 30% 21% 19% 6% 11% 2% 4% 2% 3% 1% 1% Faster time to market for new products Improved employee productivity Reduced operating expenses Improved customer satisfaction Extended geographic reach Fewer security/data leakage incidents Increased revenue Improved availability of cash Increased gross margins Reduced customer churn Reduction in debt/borrowing Benefits experienced (n=250) Primary benefit (n=185)

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