The Move to the Cloud: Making Economic Sense of the Hype

Bernd Schlotter, President of Services, Unify
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Bernd Schlotter, President of Services, Unify

Today there is a lot of hype and a seemingly unstoppable momentum around businesses moving their communication and collaboration solutions to the cloud, thanks to its tremendous agility and scalability and the anticipated economic benefits. Within those businesses, there are a diverse set of stakeholders that have different needs when it comes to the cloud, ranging from a marketing team leader with a credit card who is looking for a better team collaboration solution to a compliance officer concerned with data security to corporate IT departments with a comprehensive UCC vision. Yes, the cloud train has left the station and cannot be held back. This is a good thing.

However, many organizations believe a move to the cloud is favorable simply because of trends such as BYOD, mobility, the New Way to Work, and– let’s admit it – just because everyone is doing it. The New Way to Work in unified communications and collaboration embraces technology and the freedom that it grants, allowing people to work wherever and whenever they want, on whatever device they want, empowered by synchronous and asynchronous, context aware, rich collaboration tools. Unfortunately, relatively few organizations proactively analyze the human element of the New Way to Work as well as the economics behind this move to the cloud. As a result, they miss the opportunity to maximize business value and the end-user experience at the same time.

What does all this mean for the CIOs of today? From my perspective, it’s helpful to look at the cloud hype question from three different perspectives. First, CIOs need to consider the end user’s perspective. In the end, do they just want the modern, easy to use services and functionality they need delivered, not caring at all about whether it is handled over the cloud or through on premise systems? Second, we need to look at the economics of a move to the cloud — at what point does it make sense or is it more economical to retain certain services and functionalities on premise? Third, as we have all seen from the steady drumbeat of data breaches in recent years, CIOs need to consider the compliance and security implications of moving to the cloud.

Despite all the headlines and hype surrounding the cloud, it is important to keep in mind that, for the most part, users are not too invested in how exactly they are being served the IT services and functions they use day to day. They just want to know that they will work properly and not suffer from service outages, reducing their productivity. Whether these services come in over the cloud or across onpremise systems, your non-IT coworkers will likely not care much.

“Just as software development has progressed to an agile model from the waterfall model that was the historical norm in our industry, CIOs must be agile in the same terms”

When it comes to the economics of moving to the cloud, no doubt we have all read countless stories and studies about how moving to the cloud is always the most economically advantageous way to provide IT services in our modern digital and connected age. I am a strong proponent of cloud delivery of Unified Communication and Collaboration-as-a-Service (UCCaaS). However, it pays for CIOs to take a hard look at their assets, needs, and cash flows. For instance, when your deployment of an application reaches a certain number of users, it might be most cost effective at that point to move ahead and purchase the software outright, rather than using it on a subscriber basis and funding it out of operating expenses. CIOs should understand where that break-even point is.

The cloud is not one-size-fits-all. As an example, many companies today employ a hybrid model, wanting to protect the investments they have already made by continuing to use legacy systems. In the economic case, it is about balancing the ROI of moving the workloads in one dimension and the improved user experience in another. These two dimensions taken and considered together by CIOs is the right way to look at a migration strategy to the cloud, rather than favoring one way over the other.

Finally, CIOs need to consider the compliance and security implications of moving to the cloud. Cloud architecture is becoming more secure with each passing month, but many organizations remain hesitant to turn over very sensitive and proprietary data to third-party cloud vendors. Already, there is the longstanding issue of shadow IT, which has only gained in popularity as cloud adoption proliferates. A marketing manager, for instance, can easily fund $300 per month in subscription fees for her group to a certain application. But that can expose the organization – no matter how large – to considerable risk. Many employees also widely use popular cloud storage and file sharing applications in their organizations, which in some cases are not featuring enterprise-grade security.

In considering these three dimensions when debating a move to the cloud and seeking to debunk the economics around this trend, it is important also to be agile. Just as software development has progressed to an agile model from the waterfall model that was the historical norm in our industry, CIOs must be agile in the same terms. Rather than having a grand scheme, multi-year roadmap, they should have much more rapid iterations and far more input from their end users. Agile IT goes beyond software development and extents to processes and decision making. In these ways, CIOs can begin to unravel the economic mysteries of the cloud and make the best decision for their organizations and fellow employees.

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