2023 cloud outlook

How successful enterprises maximise the impact of cloud transformation

The cloud enables companies to turbocharge their performance and stay competitive in a fast-evolving marketplace—one often disrupted by cloud-powered startups. Organisations boost their return on investment through the cloud by driving revenue growth and cost savings and reaping a host of other strategic and operational benefits.

To study the unique drivers and concerns of mid-sized enterprises as they adopt the cloud, in the fourth quarter of 2022, SoftwareOne surveyed 300 senior technology executives at North American companies across industries.

Despite a slow start, mid-sized companies are accelerating cloud transformation to ensure they are not left behind. Most of the companies surveyed started their cloud migrations within the last 2-4 years, but now 37% of their applications operate in the cloud. Organisations plan to take that percentage to 48% within two years.

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Benefits

Our study revealed that as these organisations advance in their cloud journeys, their cloud investment costs fall, while their revenue and cost efficiencies rise.

How cloud migration drives ROI

Investment drops

As firms progress in cloud adoption, spending decreases. Cloud beginners spend 1.3% of revenue, while leaders spend 1.1% of revenue.

Overall cost decline

As companies migrate more resources to the cloud, their overall costs fall. Among companies experiencing cost savings, beginners reported a 19% fall, compared with over 25% for leaders.

Revenue rises

While cloud spending decreases, company revenue grows. 26% of beginners are seeing increased revenue now, compared to 48% of leaders.

And there are many strategic and operational benefits.

Strategic benefits, leaders vs. beginners

Operational benefits, leaders vs. beginners

Challenges

But transitioning to the cloud can be complex; it often presents a maze of technology and business barriers that executives need to navigate. The most common challenges are ensuring data security and privacy, selecting the right providers and tools, and maintaining service during cloud migration. Other pain points include coping with technical debt, tracking and controlling costs, and lack of a proper organisational foundation.

Technology challenges by stage

Business challenges by stage

Cloud costs and visibility into costs are the top two business challenges, cited by about half of mid-sized companies. But only 15% of all companies surveyed have a FinOps practice today.

How to become a cloud leader

To overcome these impediments and optimise cloud results, mid-sized enterprises will want to consider six best practices uncovered by the research:

Actively manage cloud costs
using practices and tools such as FinOps to create a culture of accountability.
Focus on business goals
rather than the technology side of cloud transformation to ensure that decisions are made for the right reasons and produce the desired results.
Take a structured approach
to decisions about shifting and modernising applications that focuses on business imperatives and sets the correct priorities.

Develop the culture and talent to succeed in the cloud
creating a cloud centre of excellence to provide training and advice, ensure proper cloud governance and standard processes, and foster wide adoption of cloud best practices.
Select the right tools and partners
using a variety of cloud service models and turning to a range of cloud technology partners to bridge the skills gap as needed.
Put cybersecurity at the centre
of cloud migration plans, assessing and improving app cybersecurity before migration, and ensuring that the technology team has the needed cloud security expertise.

Let's talk

Reach out today to schedule a no-cost 30-minute consultation with one of our cloud experts.

Let's talk

Reach out today to schedule a no-cost 30-minute consultation with one of our cloud experts.