Cloud Talk: InteractiveBridge Series Report May 2015

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1 Cloud Talk: InteractiveBridge Series Report May 2015 MAY: 2015

2 2 Cloud Talk: InteractiveBridge Series Report May 2015 Cloud computing will have a transformative effect on Australian business, delivering greater flexibility and reduced cost while aligning with overall business strategy. While we are still at the earliest stages of that transformation, its impact on Australian business will be incredibly broad reaching. These are amongst the findings of the first InteractiveBridge Series Report Australia s Great Cloud Migration. This report is based on a survey of almost 500 Australian business professionals conducted by Interactive in March 2015, with additional commentary from leading business technology executives. The InteractiveBridge Series Report Australia s Great Cloud Migration is drawn from 491 responses to a survey conducted by Interactive in March It also includes commentary taken from a panel discussion at the first Interactive Bridge Series event, held in Melbourne on April 30 in conjunction with technology partners Lenovo and NetApp. Event panellists included: Baden Roberts, Global Chief Technology Officer, Talent2 Damien Gooden, Chief Information Officer, Thirdscreen Anthony Bereznicki, former Chief Information Officer, Schweppes Peter Hourihan, former Chief Information Officer, Murray Goulburn Steve Manley, Managing Director, NetApp Tony Smith, Enterprise Business Manager, Lenovo This survey of the attitudes, intentions and strategies for cloud computing busted a number of myths regarding cloud computing in Australia, including: That cloud computing is being adopted primarily for tactical and cost-related benefits That organisations are using the cloud to bypass their IT functions In fact, respondents strongly indicated that their migration to the cloud is part of an overall business strategy, and one that is driven very much by the IT function. The InteractiveBridge Series event was designed to enable the speakers and audience to dive below standard discussions of cloud implementation, benefits and barriers, and discuss key questions relating to cloud strategy and business-enablement. The key finding emerged that cloud is not about transactions, but about relationships, and as such it is vital that buyers understand not just their own strategies, but the strategies of the service providers they intend to work with.

3 3 Overwhelming support for the cloud There is clear and widespread interest in cloud computing amongst Australian businesses, with 85 per cent indicating they were either planning to adopt some aspect of cloud computing, or had already done so. However, it is clear that many organisations are still in the earliest stages of their cloud journey, with 45 per cent of respondents indicating they were interested in adopting cloud computing but had not begun implementing their strategy, and almost a quarter had commenced but not completed the implementation of their cloud strategy. These results are good news for those organisations that have yet to commence their cloud transformation, as they are clearly not yet late to do so. However, this also indicates there will be substantial cloud transformation work taking place in Australia over the coming years, leading to potential shortages in cloud-related skill sets. Interestingly, 14 per cent of respondents indicated their strategy was already fully-enacted. While this group may include organisations that have only limited ambitions for cloud utilisation, it may also encompass modern organisations that are effectively born in the cloud, and have never known any other way of operating. The Melbourne-based privately owned mobile marketing computing Third Screen is an example of a younger business which operates entirely in the cloud. We are totally cloud-based. We are a lot more flexible. Damien Gooden, Chief Information Officer, Thirdscreen VIDEO: TITLE

4 4 Cloud strategy is driven by IT A common belief regarding cloud computing is that its adoption is often driven by line-of-business managers, as a means of bypassing their IT department to access new capabilities quickly. However, respondents indicated overwhelmingly that the cloud strategy within their organisations was being led by the IT function, with only 20 per cent indicating it was driven from another function. This included the CEO/board level of organisations, with 10 per cent indicating this group was in the driver s seat. But while much has been written about the marketing function as a key driver of cloud computing, only 1 per cent of respondents indicated that marketing was driving the cloud While cloud may look cheaper on paper, that can change over the long term. Cloud strategy is business strategy The business case, certainly for the first three to five years, is compelling, and the total cost of ownership argument should then come in. But there are hidden costs and hidden implications that need to be considered that aren t necessarily brought front and centre by the people who sell you cloud-based applications. Peter Hourihan, former Chief Information Officer, Murray Goulburn While many cloud computing solutions are marketed as tactical implementations designed to solve specific problems, respondents indicated that their cloud strategy was being implemented with business strategy in mind forcing cloud to be adaptable with tailor made solutions. More than three quarters of respondents reported that the business case for their cloud was based on strategic plans, rather than tactical implementations. This may also provide an explanation for the large number of organisations that have yet to move beyond the strategic planning stage of their cloud implementation, as they strive to ensure their strategies are clearly defined. Furthermore, 87 per cent of respondents indicated that their cloud adoption strategy was aligned with their overall strategy for the business. (Aligned)

5 5 Flexibility and cost savings key motivations Another common narrative regarding cloud computing is that it is cheaper than standard on premise or hosting solutions. While debate continues as to whether this is the case, respondents indicated there is actually another motivation driving their cloud strategy, with 39 per cent of respondents indicated flexibility was their main reason. Cost was found to be the second most popular reason, as supported by 29 per cent of respondents. Another common reason for investigating cloud computing is also related to costs however that is the ability for cloud computing to move organisations away from large up-front capital expenditure on hardware and software licences in favour of paying on a subscription basis out of operating expenditure. This was the third most popular response, as selected by 12 per cent of respondents. While this ability to defer upfront costs can give organisations access to services and capabilities they might not have otherwise been able to afford, this outcome was nominated by only 13 per cent of respondents as their primary driver to the cloud. Adding cloud providers can cause more problems than it solves. If you ve got multiple cloud providers that have their own platforms, that creates a natural disaggregation of your data. Unless you ve got an underlying strategy and data model that pulls that all disparate data back into an enterprise data model and strategy, then you ve actually got a problem.. Peter Hourihan, former Chief Information Officer, Murray Goulburn Indeed, while many of the advantages of cloud computing eventually do come back to cost, they are not necessarily measured in a straightforward way, with additional benefits discussed in terms of responsibility, responsiveness, and continuity. One example is in ensuring that staff are actually assigned to the jobs they are supposed to be doing, rather than spread across a wider range of infrastructure-related duties. Survey respondents indicated they are taking their time with developing their cloud strategy, and there is good reason to. One of the key findings from the discussion was that rushing into the cloud can generate more problems than it solves, leading to significant costs further down the road. Principle amongst these was the creation of islands of data across multiple cloud service providers.

6 6 The cloud is a relationship By definition cloud computing moves IT purchasing from a transaction basis to an ongoing relationship. A common theme amongst the discussion was the need to enter into a cloud relationship with a trusted organisation, with clear understanding of responsibilities and expectations of service levels. Hence it is vital that the buyer have a strong understanding of who they are working with before the relationship commences. This can come through working with trusted advisors, but also from discussions with existing and former customers. from it. This is represented in previous findings that suggest that the move to cloud computing is being as part of the overall business strategy. Relationships are not something that happens overnight; it happens over a period of time. Because if you haven t got the relationship it s going to be very, very hard going and a very rocky road through that process. Anthony Bereznicki, former Chief Information Officer, Schweppes This also means looking into the organisation itself and developing a strong understanding of its own cloud strategy and future direction, to ensure that the two strategies will remain aligned for the foreseeable future. The emergent nature of the cloud means that strategies are still being tested and prove, with new possibilities being brought to market on a regular basis. Even earlier than that however is the need to ensure that you have a So the important thing with the cloud is to treat moving to a cloud provider like you would employing an employee. Don t just take someone s word for it, interview and go and find out, and take advice from referees. Damien Gooden, Chief Information Officer, Thirdscreen strong understanding of your existing environment and what is needed

7 7 Conclusion The interest from Australian organisations in cloud computing is both undeniable and unstoppable, and will form a cornerstone of business advantage into the future. But it is clear that we are only at the earliest stages of a broad reaching transition to cloud computing in Australia. That means there is still significant work to be done to ensure that cloud strategies align with strategies for business transformation and are enacted in the best possible way. That in turn will translate to significant work yet to be commenced in terms of cloud implementation in a field where there is unlikely to be sufficient available skill. Hence it is imperative that organisations find the right partners to help them on their cloud journey. If successful cloud transformations are about relationships rather than transactions, then finding the right partners will be crucial in ensuring successful cloud-based business transformations. Key Findings Going into the cloud is about a relationship, not a transaction, and this must be taken into account when selecting a supplier. 85% of respondents are planning to adopt cloud computing or have already done so IT is driving the development of cloud strategy Businesses are going to the cloud for strategic rather than tactical reasons The primary motivation for going to the cloud is to improve IT flexibility, followed by reduced costs

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