Video Series: The Enterprise Value of Cloud Migration

Blog

January 21, 2021

TABLE OF CONTENTS

Introduction

In this new video series from Levvel, our industry experts discuss the many benefits of migrating systems to the cloud, what organizations often overlook when it comes to cloud adoption planning, and when businesses can expect to see a return on investment. We share relevant stories from the field and how we’ve helped businesses overcome their biggest challenges.

Episode 1: What are the Benefits of Migrating My Systems to the Cloud?

Episode 1 Transcription

Anna Barnett: What are the benefits of migrating my systems to the cloud? Well, there are a lot of benefits. We recently ran a study of North American companies and we asked IT professionals and people in executive and upper management positions about things like how many workloads have they migrated to the cloud, what migration strategies they had, their challenges around there and we found benefits across three main categories.

We looked at the financial impact of migrating, we looked at the operational efficiency of IT management and the IT teams, and then we looked at the product development and speed to market. And we saw improvements across the board with the more workloads that were migrated at an organization. When you’re looking at a financial impact, we have data that shows that IT spend across all spend categories just drops dramatically when you have high cloud utilization.

But when you’re looking further than that, when you think about the revenue growth that’s possible with cost reduction, when you think about the visibility that you have when your systems are in the cloud, that allows you to manage that cash flow better, better-operating margins, the financial impact has a pretty, widespread reach. If you look at operational efficiency, the way that we measure that was things like how fast you can release changes to your product, to the market, or how often you can schedule software releases themselves, how quickly you can provision new infrastructure.

The more migrated an organization was, the higher the operational efficiency across the board as well. And then the speed to market when we’re looking at things like actually getting your product developed and released. That has a huge impact on not just, we’re looking at the efficiency and the benchmark this day versus this day when you’re migrated, but just on your competitive advantage and your market standing.

I don’t think that you have to argue that moving to the cloud is beneficial anymore. I think most companies know that. I think what you need to do is make sure that they understand just how beneficial it is and how holistic and sustainable moving to the cloud is. It’s not just moving your data to a larger storage area or reducing the amount of spend you have on physical hardware and systems.

It is improving your market agility, it’s improving your bottom line, it’s empowering the teams, it’s allowing you to put your money in more strategic areas. Like if you’re spending a couple of million dollars a year on physical hardware versus if you’re spending it on highly skilled technology professionals. I think that understanding that connection is really important for companies if they’re trying to build out their migration plan or get buy-in.

Samantha Rafalowski: There are so many benefits about migrating to the cloud and also concerns that people have when first deciding whether or not migration is for their company. I think the first one that is most important from my perspective would be that it’s much easier to adapt to changing business requirements when you do have a cloud-based infrastructure or architecture. So to me, what that means is you’re not having to go back in there and manually tinker with your applications based off of how many requests you’re gaining online.

You shouldn’t have to worry about the popularity of your website or whatever you’re hosting after it’s already been deployed. Things like scalability, reliability, those things should be kind of a non-issue because as a developer or as an organization, you’re going to have a lot of other things on your mind. You don’t need to worry about whether or not your application is crashing. And the cloud platforms like AWS and Azure have a lot of services that make it easier for you to adapt to those changing needs.

You can scale things on demand horizontally or vertically, and nobody has to do anything about it. It just happens automatically once you configure it for the first time. And on that tangent, another benefit is making those changes in your software development life cycle, or your continuous integration, continuous development platform. Those can be done. You can host those things in the cloud so that it makes it easier for you to get those deployments out faster and have newer versions of your applications.

I think from a business perspective, we don’t always realize how important the quickness of development is. But when it comes to being able to get out new releases, if your SDLC is not super efficient or you don’t have a CI/CD pipeline, I don’t really see a way that you can respond to your business needs in a timely manner. So I think that those are kind of some of the big points that are super beneficial to adopting any sort of a cloud technology, but particularly with public cloud. Because again, it’s easier when some of these services are managed and you don’t have to go in there and think about the hardware aspects of things like you would have to if you were hosting in a private cloud or a hybrid solution.

Episode 2: Why Do Some Companies Miss the Full Picture When Considering Cloud Adoption?

Episode 2 Transcription

Anna Barnett: Why do some organizations miss the full picture when they’re considering cloud adoption? I think this has a lot to do with culture, the way that teams operate, and just knowledge of the benefits that come with cloud technology. We’ve seen sort of an education gap in the market as far as how cloud platforms work and how far their benefits go to help the company’s enterprise value.

We asked companies in a recent survey what their top benefits were after they migrated workloads, and these organizations said faster deployment time, increased security, and better data metrics and insights. It’s great because when we asked them their top challenges and drivers to migrating, they were pretty much all of those same things, so they actually gained what they were going for.

But I think the important thing there is faster deployment time. That’s not just, “Okay, we have more storage and cloud platforms,” that’s time to market. Increased security, the stronger your company is the more stability you have in your market and more financially stable you are. Using data to glean insights and make business decisions is a sign of a truly innovative and digitally-transformed company in the market.

Another reason that organizations might not see the full picture is how their teams operate with each other. There can be silos between some internal teams such as product and IT and executive business. When we asked organizations in our survey who was most resistant to moving to the cloud, the top people were executives and the upper management and leadership, but IT departments actually were pretty high up there as well. And it’s not that IT departments don’t know the advantage of cloud technology, they’re much more knowledgeable on average than the executive, but they probably know more about what they can and cannot do to get to the cloud.

Executives may read some full cloud report, like one that we recently wrote and say, “Oh, that’s great. Let’s do it. Here’s your budget and here’s your timeline.” And the IT department says, “There’s no way we can do that.” Because that’s the culture of the company. There might not be enough communication or understanding of level playing field as far as what technology can do for you, but also what you need to do to enable that. And so all that to say it’s very important to make sure that you’ve reshaped your culture. You’ve gotten everyone on the same page before you migrate.

Samantha Rafalowski: So many organizations, when they’re first starting to create, come up with their migration plan, they overlook security and disaster recovery. These are two pieces of architecture that I feel like a lot of corporations and a lot of architects can put as a secondary of what they are deploying, but it really needs to be incorporated more holistically into the migration plan. That’s important because if you have architecture that is deployed, and then you are having to retroactively go back and lock it down to make sure things are deployed securely, there are a lot of pieces that you can overlook such as how the services are interacting with each other.

And that goes for disaster recovery as well. Having a robust disaster recovery plan oftentimes isn’t just as simple as duplicating your environment and having it be on standby. It’s great if you can do that. If you can do that, then sure, disaster recovery might not have to be at the forefront of your mind, but many people can’t afford to have a hot standby of just an absolute replica of their environment.

So when you are designing your migration plan and what applications you’re going to deploy in the cloud for the first time, you should be thinking about how these applications can be the most securely deployed possible, and also how these applications need to be supported in disaster recovery instances.

So what services should I be thinking about configuring for DR? And what does that look like? How long is the standby? How much data can I lose in this disaster recovery plan? Things like that are really important to keep in mind first because otherwise you might end up in a scenario where things are migrated and your DR plan isn’t in place. If that’s the case, a lot of times your application can’t go live until you have a DR plan because what if something happens? What if something crashes? Security and disaster recovery need to be implemented just as much as the original application needs to be working.

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Our 2021 Cloud Technology Management Insight Report is here

This report highlights the main issues organizations face when deploying cloud environments, offers solutions to overcome these technological challenges, and serves as an educational guide to determine your migration and cloud management plan.

Episode 3: When Should Organizations See A Return On Their Cloud Investment?

Episode 3 Transcription

Samantha Rafalowski: Organizations should probably see their return on investment once they are either mostly migrated or fully migrated. It’s not going to be until closer to the end stages of the migration or cloud adoption process that you’ll be able to start seeing a difference. And that’s because of two things. One, it takes everyone time to adapt to changes even people who work in technology and have been working in technology their whole lives, oftentimes we’ll see a learning curve when they are using new platforms. And two is because the migration process is an expensive process.

There’s a reason that so many people are dragging their feet in the sand and avoiding it like the plague. There are obvious benefits, but getting there is and can be a real pain without the correct buy-in, the right expertise, without the right team. I would say that it’s going to take awhile really, for most people to see their ROI. But investing in the cloud is like investing in a home.

The mortgage sucks, but eventually, it’s going to be worth it. And you sort of need to trust the process and the experts because modernizing your infrastructure is going to be something that you will thank yourself for later in five years. Or the next team at least will thank you for, because these issues that people find with their legacy systems really don’t go away.

When it comes to an ROI, I would say, once you get fully migrated you should start seeing a difference in the efficiency of your workloads and the efficiency of how it is deploying things, but also the financial impact. Once your migration is over and you have paid all of those overhead and hosting costs, which is kind of the root of the issue and why most people migrate in the first place, those should be a lot lower once you are in the public cloud. It’s just getting there that’s the hard part.

Anna Barnett: One thing that comes up when organizations are planning for migration is when will we see our return on investment. As with any big technology project you’re going to spend some upfront. Our data shows that IT spend increases as organizations start moving workloads and as they’re sitting in that hybrid cloud environment, when they’re still managing some on-premise and some in the cloud, but it goes down drastically as time goes on and as more workloads are migrated.

For the first couple of years, you may be spending more in areas like acquiring talent to manage your cloud platforms, managing those two different environments. But as time goes on, your investment becomes more strategic and your costs around physical hardware and capital go down. While your spend goes to areas like highly skilled talent.

Your costs around hiring vendors to do things that you didn’t have the in-house personnel to do that goes down drastically. Your costs to produce new products to develop products go down drastically. So your money is going towards areas that produce more revenue in the long run.

Authored By

Samantha Rafalowski

Cloud Consultant

Anna Barnett

Research Senior Manager

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Meet our Experts

Samantha Rafalowski
Cloud Consultant

Samantha is an experienced, AWS-certified cloud architect at Levvel, where she has worked with application development, cloud enablement, and architecture assessment efforts for a variety of clients. She has over five years of experience in technical strategy and delivery for clients ranging from startup to Fortune 500 companies. Samantha specializes in serverless machine intelligence and virtualized resources, and enjoys writing (technical and otherwise) in her free time. She has a B.S. in Computer Science and a B.A. in Spanish from the University of Virginia.

Anna Barnett
Research Senior Manager

Anna Barnett is a Research Senior Manager for Levvel Research. She manages Levvel's team of analysts and all research content delivery, and helps lead research development strategy for the firm's many technology focus areas. Anna joined Levvel through the acquisition of PayStream Advisors, and for the past several years has served as an expert in several facets of business process automation software. She also covers digital transformation trends and technology, including around DevOps strategy, design systems, application development, and cloud migration. Anna has extensive experience in research-based analytical writing and editing, as well as sales and marketing content creation.

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