Dive Brief:
- Most organizations that have adopted cloud are stuck in the middle of digital transformation and experienced some degree of buyer’s remorse about their primary hyperscaler contract, according to joint research by IBM Consulting and HFS Research.
- Nearly all of the 510 Global 2000 enterprise senior executives the two firms surveyed expressed second thoughts about their cloud service provider. One-quarter of respondents had terminated a hyperscaler contract in the last 12 months.
- Costs and vendor lock-in worries further complicate adoption. As a result of poor planning, less than a third of cloud migrations meet budget and timeline constraints and only one-quarter of enterprises achieve demonstrable return on digital transformation investments, the research found.
Dive Insight:
As cloud became the go-to technology for enterprise modernization, organizations have wrestled with billing complexity, cost overruns, skills gaps and other adoption hurdles. But poor alignment between business and IT goals leads to most post-migration woes.
“The problem with cloud has been that people are convinced they have to be cloud-first without thinking about why and how,” HFS Research CEO and Chief Analyst Phil Fersht told CIO Dive.
“They're saying that everything has to be in the cloud so we can be more nimble and faster and get things done better,” said Fersht, “but they're not thinking about the real end goal.”
There are signs that organizations are forging stronger synergies between business leadership and IT, making cloud investments more than just a technology priority.
Less than one-third of cloud transformations are funded by IT, according to the report. The majority are now overseen by the board, CEO and other non-IT stakeholders, the report said.
“Cloud transformation that moves enterprises forward demands a seamless alignment between technology and business,” Fersht said in an email.
The implication is that cloud is woven into broad enterprise transformation rather than siloed in IT.
When cloud decisions become business priorities, it’s better for the enterprise. CSPs, however, may take a hit.
While cloud transformation remained a top investment priority for 3 in 5 respondents and only 10% anticipate decreasing cloud spend, the shift in decision-making responsibilities has raised cause for pause.
One in 5 respondents said their organization had slowed or temporarily halted migrations due to planning and execution headaches, and 14% are reconfiguring existing deployments after a post-implementation strategy change.
