Table of Contents
For many businesses today, cloud computing has become an essential part of operations…
The Evolution of Cloud Computing
Let‘s dial back the clock to understand how we arrived at today‘s cloud-powered era.
Mainframe Days
In the 1960s, mainframe computers handled organization-wide workloads in government and academia. These expensive, refrigerator-sized machines could cost millions annually. Access was strictly controlled by IT ops teams.
Rise of Personal Computers
The 1970s saw experiments melding graphics and text on computer screens for interactive, visual experiences beyond just code. Xerox PARC pioneered the graphical UI. Apple Macintosh then made it mainstream.
Networking capabilities soon connected these disparate personal computers over local area networks and then the emerging internet.
The Distributed Computing Revolution
Client-server computing in the 1990s allowed apps to split processing between locally installed software like Microsoft Office and back-end servers like SQL databases networked to PCs.
The distributed model gave more users hands-on control rather than depending on mainframe keepers. It scaled better than monolithic systems too.
Time-Sharing Services Emerge
Dial-up bulletin board systems (BBS) enabled users to login to remote machines to access apps and community message boards.
Early internet service providers (ISPs) similarly gave home users shared access to networks and storage not physically housed in their basements or bedrooms! The seeds of the cloud were planted…
Grid Computing and Peer-to-Peer
In the early 2000s, utilities like electricity grids conceptually inspired “compute grids” to harness distributed computing power through networked commodity machines across organizations vs isolated data centers.
Peer-to-peer architectures similarly aimed to decentralize storage and content distribution among intermittently connected devices. Napster’s music sharing network demonstrated viral peer-to-peer potential.
The Cloud Takes Shape
By the mid 2000s, soaring smartphone usage and broadband penetration precipitated rolling out centralized “cloud utilities” for on-demand internet services.
In 2006 Amazon launched the Elastic Compute Cloud (EC2), delivering virtualized computing infrastructure now known as infrastructure-as-a-service (#IaaS).
The race was on to scale the cloud…
Cloud Adoption Across Industries
Cloud adoption was initially slower among traditional enterprises compared to digital native businesses, but the tide has certainly turned according to the market researchers:
Multicloud adoption has topped 90% among enterprises surveyed by Gartner
Drilling down further into leading industry verticals:
Banking
- 85% of all banks now use cloud-based services, with 70% planning to shutter their traditional data centers by 2025 according to Accenture. Compliance considerations are being resolved.
Energy & Utilities
- 80% have moved at least one workload to the cloud, per Deloitte. Use cases span asset management, cybersecurity services and customer analytics.
Government
- Federal cloud spend in the US will approach $12 billion by 2025, led by national security data consolidation aims, says Bloomberg Government.
Insurance
- 27% of workloads have already moved to cloud with an expectation this hits 35% by end of 2022 according to MorganStanley – led by product development and customer acquisition applications.
Manufacturing & CPG
- 80% of manufacturers believe industry cloud platforms will provide real-time supply chain transparency by 2030, reveals an IDC survey.
Cloud Benefits for Specific Roles
Depending on where someone sits in their organization, the upsides of cloud adoption will resonate more powerfully for certain teams over others.
Empowering Marketing with Cloud
Marketers were among the earliest commercial cloud adopters beyond tech startups, leveraging on-demand tools for optimizing customer targeting and pacing campaigns based on budgets. Cloud analytics now also empower marketing ops to gauge content engagement and fine-tune strategies using hard data.
Accelerating Sales via the Cloud
The CRM market has massively shifted towards cloud-hosted systems like Salesforce.com instead of on-prem software. This allows the sales organization real-time visibility into prospect engagement across channels and surfaces alerts when touchpoints are needed to advance deals using AI-driven insights.
Streamlining HCM through Cloud HR
Whereas human resources previously depended on manual processes using paper forms or isolated systems, HR teams now access integrated talent management suites in the cloud spanning recruitment, onboarding, performance management and learning. This brings consistency across regions while enabling employees to access systems securely from anywhere.
Comparing Cloud Tradeoffs
Weighing cloud deployment models involves inherent tradeoffs between control, flexibility and costs:
| Parameter | Public Cloud | Private Cloud | Hybrid Cloud |
|---|---|---|---|
| Infrastructure Control | Low – leased from 3rd party providers | High – owned and operated privately | Mixed – dictates placement of workloads |
| IT Skill Needs | Low – handled by cloud provider | High – relies on in-house ops talent | Mixed – managing complexity requires both |
| Upfront Capex | Low – only pay-as-you go fees | High – must purchase own systems | Moderate – requires some upfront outlay |
| Scalability | High – leverage shared capacity pools | Limited – constrained by fixed resources | Flexible – workloads move between clouds |
| Multi-tenancy Risk | Higher – resources shared across unknown parties | Lower – used solely by one entity | Moderate – public cloud introduces some risk |
| Availability | Moderate – risk of vendor outages | Higher – relies on corporate safeguards | Robust – distribute across environments |
There are techniques like using availability zones to engineer higher resiliency in public clouds. But outages over recent years impacting providers like AWS, Google and Microsoft underline realities around depending too entirely on third parties.
Thoughtful hybrid and multi-cloud architectures withstand disruptions by avoiding concentrations of risk. But this requires upleveling IT skillsets and operating models.
Managing Cloud Challenges
Any substantial cloud adoption journey will encounter obstacles on the road to change. Being aware of risks heading into initiatives makes it more likely organizations sidestep pitfalls.
Let‘s analyze key problem vectors and mitigations.
Vendor Dependencies
Concentrating spend on one or two public cloud vendors risks expensive lock-in if needing to later shift workloads. But evenly spreading usage defeats economies of skill. The answer lies between, by initially targeting a primary vendor for cloud migration but always requiring portability using containers and leveraging opens source tech not proprietary to any one provider.
A multi-cloud management platform can then harmonize visibility and governance across heterogeneous infrastructure footprints.
Skill Gaps
Internal ops teams boasting decades of experience running traditional data centers may lackcloud fluency. Retraining takes time and careful skills mapping. Leveraging managed services through partnerships temporarily fills talent gaps so business initiatives don‘t stall. But longer term, cultivating cloud native practices in-house remains imperative, lest outsourcing costs erode hoped for savings.
Technical Debt
In racing to migrate legacy systems to the cloud, business stakeholders often just want the same app experience without disruption. But this lift-and-shift approach defers needed software upgrades or cloud-native rewrites. The short term relief thus incurs ongoing technical debt until modernizing core app architecture.
Executing Cloud Migration
Transitioning infrastructure and data to the cloud while optimizing spend and security involves structured planning and phased execution coordinated by corporate IT, with oversight from cross-functional governance teams representing each business domain.
The high-level methodology:
1. Discover and document system interdependencies through tools scanning networks to auto-generate application maps showing connections between servers, apps, databases and utilization patterns.
2. Rationalize portfolios via application owners aligning older software to strategic needs and cloud readiness plus help desk ticket analysis revealing user experience pain points.
3. Model migration scenarios comparing approaches like re-hosting, re-platforming, rewriting or retiring apps while projecting infrastructure and licensing costs via public cloud, private cloud and hybrid options across target platforms.
4. Prioritize wave planning by coordinating capacity and sequencing most fragile legacy apps first while leveraging available skills and tools.
5. Test via staged rollouts applying learnings before final cutover commitment. repetition develops organizational muscle memory reducing errors.
6. Manage costs ongoing through tooling providing visibility into consumption and chargeback reporting to align cloud budgets with business usage.
The Path to Cloud ROI
Transitioning to cloud-centric operating models generates hard cost savings, accelerated growth via innovation velocity and improved resilience. The savviest IT leaders now quantify business value through compelling financial cases justifying cloud investments.
Here is an example 3-year ROI forecast across key performance indicators that direct stakeholders can relate to:
Diving deeper into assumptions by cost pool:
-
Data center colocation savings – from exiting leased facilities
-
Faster product launches – via developer productivity gains leveraging cloud native toolchains
–Improved sales conversions – by modernizing customer facing apps and touchpoints
- Expanded profit margins – from supply chain visibility and forecasting accuracy
Such models help demystify cloud migration, moving the boardroom discussion from tech jargon to everybody‘s favorite language – cash!
Regional and Industry Cloud Constraints
However attractive expanding cloud usage appears for cost and innovation advantages, regulatory realities in sensitive industries impact adoption models for global enterprises.
Data protection, privacy and cybersecurity laws differ substantially across geography and industry verticals. This directly affects allowable cloud deployment options.
For example, the European General Data Protection Regulation (GDPR) has strict requirements around consumers‘ personal data portability rights and breach notifications, with hefty non-compliance fines. This makes unilateral public cloud usage tricky.
Banking and healthcare sectors also operate under myriad regulations that steer decisions around hosting sensitive data processing off-premises.
Understanding restrictions by region and line of business helps craft rational cloud roadmaps compliant with oversight obligations. Again, hybrid models mixing private infrastructure and public cloud offer paths to balance security with flexibility.
What Does the Future Hold?
Cloud computing is assuredly no longer just some niche experiment. The mass migration is fully underway.
Gartner predicts:
- 85% of organizations will embrace cloud-first policies by 2025
- 80% of data center traffic shifting to cloud infrastructures
- 40% of enterprise workloads still running traditional data centers will drain into managed cloud providers through 2024
So for technologists and business leaders alike, ramping cloud literacy and skills today promises big career dividends tomorrow.
We‘ve only scratched the surface exploring market dynamics and tactical guidance here in this guide. But hopefully readers now feel empowered to start contextually relating cloud concepts to priorities in your real world.
When evaluating next steps on your cloud journey, consider working with an experienced partner complimenting your internal capacities. Hybrid and multi-cloud proficiency remains relatively scarce. VMware Cloud solutions help smooth enterprises‘ path to the future without detours.
The possibilities look wide open!