In the early days of cloud computing, cost was the number one driver of adoption. Startups and SMBs flocked to the cloud for the ability to build their mission critical applications without having to sink huge amounts of capital into data centers and physical infrastructure. Over the last couple of years, enterprises have started getting over their fears of security and control with public clouds and are moving more workloads outside of their firewalls. The impetus for the move is not to reduce costs, but to get products to market faster. For some, this is about gaining competitive advantages over their peers. For others, it is a matter of survival.
Here are three of the top reasons why enterprises are investing in public clouds.
1) Competition is driving the need for speed
The game has changed. Enterprises are dealing with competitive threats like never before. Now a startup with very little capital and great engineering resources can quickly build a superior product at a much lower cost and offer the service for a lower price. Competitors are moving to a Software as a Service (SaaS) operating model that is radically changing pricing from a large upfront capital expenditure model to a subscription based model. Delivering SaaS also means more frequent software updates, more self service capabilities, and less work for the customer. If competitors are moving to the SaaS model, a company would not want to be the last one standing that still delivers only bi-annual upgrades and relies on the customer to participate in the upgrade process. That would be a tough sell.
Enterprises need to dig their way out of their legacy processes and technologies and figure out how to deliver more features and faster. One way of accomplishing that goal is to focus more on core competencies and start offloading commodity type work to the experts. Unless a company is in the data center business, they are nuts if they have no plan to stop sinking valuable capital and time into infrastructure and real estate that provides no competitive advantage.
2) Private clouds are expensive and challenging to implement successfully
I can’t even count how many companies I have come across who went down the private cloud path only to find out that the DIY approach was much more challenging than their favorite vendor’s PowerPoint slides led them to believe. Many of these companies sunk a large amount of cash and time into their private cloud initiative with very little business value in return. In fact, some have built private clouds only to discover that the developers refuse to use it and are building on AWS anyway. Don’t get me wrong, I am not bashing the private cloud nor saying that companies cannot extract value out of them. What I am saying is that I have seen many companies make large investments in private cloud only to discover that they still are spending too much time managing infrastructure and not enough time delivering business value. Many of these same companies are now looking at moving as many workloads as possible to the public cloud to solve that problem. This has led to a rise in hybrid and multicloud cloud solutions, where a variety of public and private clouds come together to meet business needs and requirements.
3) Customers are demanding it
Customers are trying to be more agile too. One way of accomplishing that goal is to offload more work to their vendors. This means that many customers are done with the days of purchasing software and infrastructure and managing third party products. Now they want the vendor to do all of that work in a SaaS offering with the highest levels of security, availability, and reliability. Vendors that are slow to adapt the SaaS model will find that they are not even considered in many RFP processes. Many customers just simply do not want to commit resources to managing third party software anymore.
SaaS creates challenges for suppliers because not all customers are comfortable with their data being in a public cloud. I have seen companies build SaaS solutions that are capable of being deployed on different cloud endpoints (public and private). I have also seen companies that have figured out how to keep the data layer in a private cloud or datacenter, yet deploy the rest of the stack in a public cloud. Others choose a pure private cloud solution, but that approach might be short sighted. Many companies are accepting the public cloud and the percentage of customers that do will only increase each year as fears fade and the public cloud matures.
Summary
As I have mentioned in the past, cost is not the key driver for most enterprises when it comes to cloud. Getting new features out in the market place quickly and frequently is the game that we are required to play in this day and age. Building and managing datacenters is a commodity and spending IT cycles on managing physical infrastructure rarely adds value to a business’s bottom line. The public cloud creates a huge opportunity for companies to focus on their core business and get their services and products to the market faster.
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