A recent report was shared by McKinsey, ‘the state of cloud computing in Europe’, which highlighted not just low returns, but serious complications for businesses implementing cloud as a basis for their digital transformation.
Firstly, not only does the value of cloud come ‘in isolated pockets and at a subscale level’, but it’s also limited to your IT department. While 75% of those surveyed reported either cost-savings or increases in productivity, only one-third have seen such savings beyond IT.
This could be down to cloud being historically ‘owned’ by IT and that legacy is hard to lose. The research has found 71% of companies measure the value of cloud in IT operational improvements. In comparison, just one in three companies in Europe monitor non-IT outcomes. 37% reported on cost savings outside of IT and 32% reported new revenue generation.
What this means is cloud success is determined by IT capabilities.
This is despite 90% of these companies are prioritising cloud projects. Again however, just a third of these businesses regularly discuss cloud progress at a C-Suite level.
Leaders don’t realise that It’s not about embracing cloud as a solution to change your business. It’s about identifying the change needed and implementing the right technology.
On the flipside, the report does indicate there is ‘hybrid thinking when it comes to digital infrastructure. For example, there are two-thirds of companies with more than 50% of their workloads migrated to cloud and more than 20% of their activity is retained on-premises.
But the mindset on cloud has resulted in McKinsey to proclaim that: “The ability to take advantage of new technologies, particularly generative AI…will depend on how well companies can establish and scale their cloud programs”, which needs to be challenged.
To echo the BBC guidelines for mentioning brand names: there are ‘other forms of digital infrastructure available’. There are existing alternatives, which some exceed cloud.
One example is the edge colocation data centre, that provides low-latency processing and real-time response. It opens new capabilities and revenue streams for a business, such as video analytics. For the likes of oil rigs or power plants, connections to cloud centralised facilities will always come with a huge risk.
This is why Gartner predicts by 2025, 75% of enterprise data processing will move to the edge.
Conclusion
Data strategy isn’t a one fit all, each businesses needs to develop their own bespoke strategy as a true reflection of their IT focus on cloud, which must now be strengthened by their business approach to the likes of operational demands to drive value from their digital infrastructure investment, regardless of the technology.
