In my last post, I talked about two factors driving enterprises to adopt the Cloud. In this post I will discuss three more key factors driving Cloud adoption.
3. More efficient mergers, acquisitions and divestitures.
Mergers and acquisitions of large companies are complex and subject to strict deadlines and budget constraints. From a technology perspective, each of the parties usually has multiple data centers, multiple technology stacks, and different standards for hardware, operating systems, platforms, and tools. Traditional IT integrations involve data center consolidation, data and application migration, and the retirement of redundant applications and infrastructure: a time-intensive and expensive process.
In the case of a divestiture, companies need to separate the infrastructure, data centers, applications, and services for the new entity, or to rebuild from scratch.
Cloud helps simplify these activities and speeds the transition. Here is how:
- The pay-as-you-go nature of Cloud is a great help for short-term capacity requirements. It is useful for parallel runs which are essential during mergers/acquisitions and for the applications which are found redundant due to mergers and are slated for retirement in the near term. Instead of building this additional capacity in your data centers only to get rid of it a few months later, you can provision it on the Cloud. Provisioning on Cloud doesn’t need any affront investment and pay-as-you-go nature of Cloud means you stop paying as soon as you don’t need the additional capacity and stop using it.
- In the case of divestitures, the Cloud can serve nicely as the primary “landing zone” because there is no lead time for building capacity and no upfront investment in new data centers and hardware.
4. Expand geographies
Traditionally, enterprises have been constrained by IT when they want to expand into new geographies. There typically is the cost to build data centers, set-up network and security, purchase hardware, and hire local resources to support and manage the data centers. Lead time required for all of this is unpredictable, and working with new vendors and partners adds to the complexity.
Many companies have considered using Cloud service providers to help bypass many of these hurdles while providing the necessary tools to chart into new geographies. How?
- Most Cloud providers, like AWS or Microsoft, already have significant presence in key geographies around the world. Their data centers are built and ready for companies to minimize start-up and management of operations.
- There is no need to deal with multiple data center and telco partners – all of this is managed by the Cloud providers.
- The need to alter development and operations operating models is likewise minimal. Developers in the core IT organization can use familiar platforms and ecosystems, and operations can use familiar infrastructure components to manage the day-to-day business.
5. Enable a culture of innovation for agility
Most enterprises desire a “culture of innovation” in IT. It is important that IT enables new ideas, and projects get off the ground faster and allows faster iterations. However, by nature, many of these ideas or experiments will fail. In the traditional environments the cost of experimentation and failure is high, which stifles the culture of innovation.
Aging platforms and infrastructure can slow down a culture of innovation. The need for an organization to move towards a adopting agile development and DevOps at a time where customers and the business is requiring higher response times can limit IT’s ability improve time-to-market, product and service quality.
With Cloud, the lead time to provision the environments can be reduced from weeks to minutes. The cost of building the environments can be lowered. And, with pay-as-you-go pricing, the business does not have to worry about the infrastructure costs after the completion of experiments. Combined, this reduces the cost of experimentation and failure. Cloud also provides many out-of-the-box features and tools to enable agile development.
These are some of the top reasons for why enterprises are adopting Cloud right now.
Why are you considering moving to the cloud? Let me know.
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