Regaining ROI by reducing cloud complexity
Cloud computing took off in 2007, and the migration was a gold rush, with companies racing to launch silver bullet solutions that could transform their companies. Fast forward to now. Cloud computing projects are in their second or third generation, and instead of offering ROI, some are racking up sky-high operational costs, impeding efficiency, and stifling productivity. That’s in addition to system outages, security breaches, and customer issues with stoppages and delays that keep developers and architects up at night.
The problem? Cloud complexity — and for some companies, it’s become a disaster.
In its Cloud Complexity Management Survey, Deloitte Consulting LLP found that most large enterprises are running into more complexity than expected – and 47% of companies surveyed saw it as the biggest risk to their ROI. Some are even experiencing negative value from their cloud investments.
“People call up and say, ‘We’re not getting the value from cloud that we thought we would,’” says David Linthicum, Chief Cloud Strategy Officer at Deloitte Consulting LLP. “99 times out of 100 you can map it down to the complexity issue.”
The complexity issue comes down to three main factors:
“There’s a sweet spot between innovation and complexity,” says Dave Knight, VP of Alliance Relationships and Deloitte’s IBM Alliance Global Cloud Lead. “That’s the challenge, identifying when you’re at that tipping point, and reining it in or increasing your operations cost to offset the complexity. But most organizations, even the global 2000, are just starting to recognize this as a problem.”
“Of course, it’s never too soon to do good architectural planning to deal with complexity issues proactively,” Linthicum says, “but it’s not too late for companies that find themselves in a tight spot.”
“The first thing is admitting that there’s an issue, which is a tough thing to do,” Linthicum admitted. “It essentially requires creating an ad hoc organization to get things back on track and simplified, whether that’s hiring outside specialists, or doing it internally.
“The good thing about that is typically you can get 10 times ROI over a two-year period if you spend the time on reducing complexity,” he says.
Even with that incentive, reducing complexity involves a cultural change: shifting to a proactive, innovative, and more thoughtful culture, which many organizations are having trouble moving towards, he warned. The most effective way to do that is really retraining, replacing, or revamping.
“That’s going to be a difficult thing for most organizations,” Linthicum says. “I’ve worked with existing companies that had issues like this, and I find it was the hardest problem to solve. But it’s something that has to be solved before we can get to the proactivity, before we can get to using technology as a force multiplier, before we can get to the points of innovation.”
Linthicum estimates that the fix typically costs about 20% of the current cloud computing budget, above and beyond most existing spends on IT. In other words, if you spent $4 million on cloud services, in addition to your normal IT budget, it could cost 20% of $4 million to fix a critical complexity issue.
