The cloud has become the foundation that enables businesses to transform, differentiate and gain competitive advantage.
This statement from Gartner illustrates why the market for cloud-based services—including software-as-a-service (SaaS)—is growing so quickly. Forty percent of organizations in North America plan to spend the majority of new or additional funding on the cloud, according to a recent Gartner survey.
Here’s what CIOs and other IT professionals need to know about a cloud-first strategy and how to implement it.
The Market For Cloud Services
The worldwide market for cloud services is projected to grow 80%, from $182 billion in revenue to $331 billion by 2022, according to the most recent Gartner research.
Cloud application services (also known as SaaS) represent a significant portion of that growth, with revenue growth also on track to increase by 80% in that same time period.
More than a third of organizations see cloud investments as a top three priority, which impacts the market’s offerings. By the end of the year, Gartner expects more than 30 percent of technology providers’ new software investments to shift from cloud-first to cloud-only.
That means demand for and availability of license-based, on-premise software solutions will continue to plummet while SaaS solutions become the new norm.
And there’s good reason for that. Traditional on-premise software is expensive to maintain and update, difficult to scale and does not easily integrate with many modern SaaS solutions. By contrast, cloud-based solutions reduce complexity and streamline operations, which accelerates speed to market and gives companies a competitive advantage.
“Cloud services are definitely shaking up the industry,” said Sid Nag, research vice president at Gartner. “At Gartner, we know of no vendor or service provider today whose business model offerings and revenue growth are not influenced by the increasing adoption of cloud-first strategies in organizations. What we see now is only the beginning, though. Through 2022, Gartner projects the market size and growth of the cloud services industry at nearly three times the growth of overall IT services.”
How To Develop A Cloud-First Strategy
By 2025, Gartner predicts 55% of large organizations will implement a cloud-only strategy.
While that may be the eventual goal, it’s often easier for large organizations to start with a commitment to cloud-first.
A cloud-first strategy is an organizational commitment to evaluate cloud-based solutions before considering other alternatives. Unlike a cloud-only strategy, it doesn’t entirely eliminate other solutions, allowing for greater flexibility.
In a whitepaper on cloud strategy leadership, Gartner offers the following recommendations:
Start With The Business Objectives
Moving to a cloud-first strategy simply because it’s a growing trend likely won’t be enough to convince your executive team.
Consider what your business objectives are and what you hope to gain from cloud migration. Then determine what key stakeholders need to be involved, which cloud strategy is best and how you’ll measure the outcome.
In a recent TechTarget survey of 600 IT professionals, 47% said their primary reason for pursuing digital transformation (including a shift toward cloud applications) was to streamline operations and improve internal efficiency. That was tied with another closely related priority: improving employee performance and productivity.
Both are fundamental to achieving their third most pressing priority: enhancing the customer experience.
Ensure Cloud Security
It’s a myth that moving to the cloud means compromising security. Gartner predicts that through 2020, public cloud infrastructure workloads will have 60% fewer security incidents than traditional data centers.
However, the assumption that everything in the cloud is 100% protected is also a myth. IT leaders still need to take steps to safeguard data and ensure employees are using best practices.
Develop Cloud-Savvy Talent
In a 2016 Gartner survey, IT professionals said the cloud would have the single largest technology impact on their career.
Adopting a cloud-first strategy requires individuals with a new set of skills, including:
- Knowledge of cloud architecture and deployment
- Expertise in cloud security
- An understanding of how the cloud impacts data and analytics
- Experience with Internet of Things (IoT) applications, including sensors
- Experience with SaaS deployments
In addition to technical skills, the right candidate also needs to be able to collaborate effectively with leaders across the organization.
The Future Is In The Cloud
The future of IT clearly points upward. Cloud-based storage is more agile, scalable, efficient and cost-effective. And cloud-based applications position organizations to embrace what Gartner refers to as the “continuous next”—the future we can’t yet anticipate, but must be prepared for.
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