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Enterprises are realizing only 35% of the value from their workloads already in the cloud.
Leading enterprise cloud adopters have migrated nearly two-thirds of their workloads to the cloud, yet the average company has only 18% there.
Up to 50% of the value of cloud investments is predicated on streamlining and improving company operations.
These and other insights are from the recently published Bain & Company study, Tapping Cloud’s Full Potential. A downloadable version of the study is available here (8 pp, free no opt-in). Bain & Company interviewed 428 companies and found that enterprises that are focused on getting strategic value from their cloud investments aim to migrate at least 50% of their workloads to the cloud.
Key take-aways from the study include the following:
- Only 35% of the value from workloads in the cloud today is being realized, leaving 65% of their value untapped. Enterprises have the potential to gain much greater value from the workloads they already have in the cloud. The following figure from the study shows current realized value versus potential value.
- Bain advises enterprises who want to lead their markets to take a “cloud first” approach to initiating new IT workloads. Taking a cloud first approach requires redefining how new IT operational models scale to support and accelerate emerging and existing business models. The following graphic illustrates this point.
- Bain found that putting workloads on public or hybrid clouds delivers more value in the form of bigger cost savings, greater flexibility, more scalability and better built-in services. For example, adopting the Salesforce1 development platform has enabled some companies to launch 80% more applications annually and speed time to market by 70%. Bain also cites enterprises that moved development to IaaS and PaaS clouds from Amazon Web Services (AWS) reducing downtime by 72% and improving application availability by 3.9 hours per user per year.
- Change management is essential for any enterprise to realize the full value of their cloud investment. Bain found that no matter how much effort is put into planning, piloting and implementing cloud technologies, up to 50% of the value of cloud investment is predicated on streamlining company operations first. Change management strategies endorsed and evangelized by senior executives is critical for cloud-based systems and platform to succeed.
- Enterprises that take an Agile development approach and tighten the integration between development and infrastructure with DevOps practices increase the probability of cloud project success. Bain sees enterprises who standardize their development platforms, leverage automation tools and take advantage of self-service options for stakeholders succeed with their cloud initiatives.
- Investments in virtualization pay off. Bain also found that well-run IT organizations with 60% to 75% of their traditional server environments virtualized are able to migrate faster than those that are less reliant on virtualization.
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