At first, it’s all about cost savings — avoiding up-front fees, hardware costs, and ongoing maintenance and software upgrades. But looking beyond the operational concerns with cloud computing, things get much more interesting. Cloud really begins to shine when it becomes an enabler for increased business opportunities, and expanded horizons.
The challenge is measuring, or at least understanding, the gains. Incremental savings from moving an application off a local server to a cloud site are easy to capture and document. But how do you measure increased agility? How do you measure the ability to pivot to new business opportunities? How do you measure an increased capacity for innovation? These gains can’t be properly measured using traditional return on investment measures. The sole indicator is how a bundle of initiatives, supported through a forward-looking and visionary corporate culture, translates into increased revenues.
So, how’s cloud computing faring on this front? Is it delivering the agility and innovation that is translating into increased revenues? This was the focus of a recent survey of 338 executives, released by CloudHealth Technologies, which says, yes, there is a connection between cloud adoption and revenue growth. The survey’s authors looked at the differences between what successful cloud companies are doing versus those not too far along with cloud. For some things, there’s a world of difference between a cloud-savvy company and a not-so-cloud-savvy company.
For starters, the study found that enterprises with a cloud vision and plan are seeing far superior results than their less cloud-savvy counterparts. “Cloud leaders” are growing revenue 2.3 times faster and, on average, are generating a 35 percent year-over-year increase in top-line revenue. They are faster, more agile, and more than twice as likely to see the cloud drive competitive advantage. Cloud leaders are four times more likely to roll out new applications and services quickly, and more than twice as likely to be “somewhat or extremely efficient” in delivering applications and services (99 versus 41 percent).
The survey report’s authors defined “cloud leaders” as those showing the very best results with their cloud operations, versus the bottom-tier who showed the worst results. “We then studied the cloud operations practices of each tier to tease out which practices lead to the best outcomes,” they explain.
A vision for cloud-based transformation is key, the survey finds. The top-tier cloud leaders were 10 times as likely to say they had a “crystal-clear vision” of how they were going to make the cloud transition. Tellingly, the top cloud performers also are almost five times more likely to see cloud optimization as a continual process, versus a one-time exercise. One in five cloud laggards, however, “only a vague idea” or “no idea” of how they would make that transition.
Governance is also part of this equation. Cloud leaders are 40 percent more likely to have reference architectures and configuration rules defined to help ensure cloud deployments comply with enterprise standards. On that topic, trailblazers have business stakeholders who are more than twice as likely to understand cloud deployment policy and budget guidelines.
The cloud leaders are also more inclined to have a role dedicated to cloud management, something the majority (76 percent) of cloud leaders either currently have or are adding — such as a “cloud steward.” The individual in this role is almost six times as likely to be viewed as “extremely favorably” by top-tier organizations.
The survey report’s authors offer suggestions as to what it takes to be a cloud-savvy company:
- Designate responsibility and empower ownership.
- Set metrics for success.
- Understand that cloud’s benefits are much more than cost management.
- Centralize governance.
It should be noted that the organizations that have inspired, forward-looking leadership and cultures are those that recognize that cloud is but a technology tool that supports their efforts. These organizations are also likely to have a range of other characteristics, such as active encouragement of innovation, more effective information sharing, and reduced hierarchy, that help deliver results. Cloud can’t be exclusively credited with success, but organizations with the wherewithal to succeed in today’s economy understand how to make it work.
This article was written by Joe McKendrick from Forbes and was legally licensed through the NewsCred publisher network.