Enterprise Cloud Archives

Cloud Transformation: How Much Is Enough? | Blog

September 15, 2021

With today’s business transformation led by cloud, migration frenzy remains at a fever pitch. Even though most cloud vendors are now witnessing slower growth, it will still be years before this juggernaut halts. But can you have too much cloud? The question of how far enterprises should go in their cloud transformation journey is rarely thought of. Read on to learn when it may be time for your enterprise to stop and reexamine its cloud strategy.

Enterprises believe cloud will continue to be critical but only one part of their landscape, according to our recently published Cloud State of the Market 2021. Once enterprises commit to the cloud, the next question is: How far should they go? This runs deeper and far beyond asking how much of their workloads should run on cloud, when is the opportune time to repatriate workloads from cloud, and whether workloads should be moved between clouds.

Unfortunately, most enterprises are too busy with migration to consider it. Cloud vendors certainly aren’t bringing this question up because they are driving consumption to their platform. Service partners are not talking about this either, as they have plenty of revenue to make from cloud migration.

When should enterprises rethink the cloud transformation strategy?

The challenge in cloud transformation can manifest in multiple ways depending on the enterprise context. However, our work with enterprises indicates three major common obstacles. It’s time to relook at your cloud journey if your enterprise experiences any of the following:

Cloud costs can’t be explained: Cloud cost has become a major issue as enterprises realize they did not plan their journeys well enough or account for the many unknowns to start. However, after that ship has sailed, the focus changes to micromanaging cloud costs and justifying the business case. It is not uncommon for enterprises to see the total cost of ownership going up by 20% post cloud migration and the rising costs are difficult for technology teams to defend
Cloud value is not being met: Our research indicates 67% of enterprises do not get value out of their cloud journey. When this occurs, it is a good point to reexamine cloud. Many times, the issue is poor understanding of cloud at the offset and the workloads chosen. During migration frenzy, shortcuts are often taken and modern debt gets created, diluting the impact cloud transformation can have for enterprises
Cloud makes your operations more complex: With the fundamental cloud journey and architectural input at the beginning more focused on finding the best technology fits, downstream operational issues are almost always ignored. Our research suggests 40-50% of cloud spend is on operations and yet enterprises do not think through this upfront. With the inherent complexity in cloud landscape, accountability may become a challenge. As teams collapse their operating structure, this problem is exacerbated

What should enterprises do when they’ve gone too far in the cloud?

This question may appear strange given enterprises are still scaling their cloud initiatives. However, some mature enterprises are also struggling with deciding the next steps in their cloud journey. Each enterprise and business unit within them should evaluate the extent of their cloud journey. If any of the points mentioned above are becoming red flags, they must act immediately.

Operating models also should be examined. Cloud value depends on the way of working and the internal structure of an enterprise. Centralization, federation, autonomy, talent, and sourcing models can influence cloud value. However, changing operating models in pursuit of cloud value should not become putting the cart before the horse.

Enterprises always struggle with the question of where to stop. This challenge is only made worse by the rapid pace of change in cloud. As enterprises go deeper into cloud stacks of different vendors, it will become increasingly difficult to tweak the cloud transformation journey.

Despite these pressures, enterprises should periodically evaluate their cloud journeys. Cloud vendors, system integrators, and other partners will keep pushing more cloud at enterprises. Strong enterprise leadership that can ask and understand the larger question from a commercial, technical, and strategic viewpoint is needed to determine when enough cloud is enough. Therefore, from journey to the cloud, to journey in the cloud, enterprises should now also focus on the journey’s relevance and value.

If you would like to talk about your cloud journey, please reach out to Yugal Joshi at [email protected].

For more insights, visit our Market Insights™ exploring the cloud infrastructure model. Learn more

Enterprise Cloud Adoption in France: Government Policies, Vendor Strategies, Challenges, and Approach | Blog

August 13, 2021

In our earlier blogs on sovereign cloud and GAIA-X Summit 2020, we talked about the increasing relevance of sovereign cloud and the expanding impact of the GAIA-X initiative on Europe’s IT services environment. In this blog, we will explore the state of enterprise cloud adoption in France, government policies and IT market dynamics, the impact on enterprises, and the approach enterprises can take while adopting cloud technology.

While slower to adopt cloud technology than other parts of Europe and the Americas, COVID-19 has changed the outlook in France and is now picking up speed. Driven by the pandemic’s unpredictable business demand and shift in operating models, enterprises in France are embracing more scalable, agile, and reliable cloud infrastructure and service providers.

With the accelerated demand for cloud adoption, regulations to ensure data privacy have increased. Can France overcome the factors that have held it back in the past of its conservative political outlook, stringent regulations and compliances, cultural resistance to change, and inherent trust in regional technology providers? To find out, read on.

What Measures are the French government taking?

Data privacy concerns, coupled with the CLOUD Act of 2018, which permitted the US government to access data stored in servers of US-headquartered cloud providers, prompted the French government to launch initiatives to reduce France’s dependency on foreign cloud providers and protect digital sovereignty. The GAIA-X initiative launched in 2019 and cloud doctrine or “Cloud de Confidence” unveiled in 2021 mandates data to be processed and stored in France, operations to be run by French employees, and cloud providers to be certified by French authorities.

The French government’s evident push for native hybrid cloud providers such as Dassault Systèmes, Equinix, and OVHcloud through these initiatives is an attempt to slash the dominance of the US cloud providers.

Soon after the government’s announcement in May 2021, Capgemini and Orange joined forces to create “Bleu,” a French hyperscale cloud powered by Microsoft Azure to meet the privacy, sovereignty, governance, and transparency requirements of the French government.

While these developments are intended to support native French players and protect citizen’s privacy, they do raise some key questions: Are GAIA-X and “Cloud de Confidence,” as currently described, aimed to form a European cloud provider ecosystem for setting rules and regulations or is the French government planning to position these as European alternatives to the US-headquartered cloud providers? Given that such initiatives of “French cloud” or “sovereign cloud” by the French government have been short-lived in the past, how much substance will these hold?

While these questions will be better answered with time, let’s take a look at how different stakeholders are reacting to these developments, the impact these issues will have on the digital growth of enterprises, and how French enterprises should proceed.

France IT market dynamics

Amid these developments, IT stakeholders are adopting the following aggressive strategies to penetrate and establish a foothold in France:

Regional cloud infrastructure providers: Equinix, OVHcloud, and Dassault Systèmes have realized the importance of partnering with hyperscalers to build global hybrid cloud capabilities. During the political and legal developments, many French-American alliances have prevailed. Equinix and OVHcloud continue to invest in strategic alliances with AWS and Google Cloud
Europe-based global service providers: Capgemini, Orange, Atos, and Sopra Steria are investing in partnerships with hyperscalers to develop robust cloud strategies. These partnerships have gathered momentum, despite recent developments by the French government
Niche service providers: Claranet France, Sfeir, Onepoint, and Devoteam Revolve are putting a uniform focus on local private cloud providers and global hyperscalers to build a holistic cloud services portfolio
Indian heritage players: Accenture and HCL are strengthening their position in the French market by opening new offices and delivery centers in France, introducing Europe-native leadership, developing partnerships with local technology and service providers in areas of cloud management and cybersecurity, and acquiring French headquartered public cloud service partners and consultancy experts such as Gekko, Cirruseo, and Sentelis
Hyperscalers: Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure have shown interest in playing an important role in the GAIA-X initiative and cloud doctrine chartered by the French government. They are working with government authorities as policy contributors and partnering with regional cloud infrastructure and service providers

Impact on enterprises’ digital growth

While service providers are adopting aggressive strategies for the French market, there are many obstacles to overcome. Market dynamics will most likely increase the cost of technology, reduce the speed of digitalization, hamper innovation and growth, hinder technology competitiveness, restrict vendor options, and inhibit access to global technologies, standards, and talent for enterprises.

How will enterprises overcome the biggest challenges?

French enterprises face major challenges related to data security, privacy regulations, resistance to change, and talent incompetence.

Challenge	Challenge description	Mitigation strategy
Data security and privacy regulations	As cloud adoption increases and the IT ecosystem continues to expand, enterprises in France still have concerns with data privacy and security With restrictions and regulations around storage and usage of data, enterprises feel stuck and oblivious	Enterprises should work with technology providers, service providers, regulators, risk and compliance consultants, and auditors to draft a cloud adoption roadmap
Resistance to change	One of the most pressing internal challenges faced by French enterprises is cultural resistance to the adoption of new technology The digital transformation is not purely technology change, it requires a shift in mindset, organizational culture, and operating model. Hence, enterprise leaders continue to face slowed transition and cloud adoption	An organization mindset shift in favor of new technology adoption is needed Leadership needs to drive these initiatives and align employees on this vision Investments in organizational change management and clear articulation of the company’s vision may prove effective
Talent Incompetence	Since digital transformation was reactive rather than a proactive measure in France, enterprises are struggling to keep up with the talent requirements of digital transformation and evolving technology and service landscape	Training on the latest trends and new technological know-how can help gain employee confidence and make them more comfortable with change. Both in-house talent development and a talent outsourcing strategy should be adopted

Taking note of the above challenges, French enterprises should choose what is best for them and transform at a pace that is appropriate to their current maturity level and envisioned target state.

What approach can enterprises take across various dimensions for cloud adoption?

1: Based on Everest Group analysis of sustainability objectives and investments of 800+ enterprises in Europe

Despite the concerns and restrictions, the outlook for cloud adoption in France looks favorable. Hyperscalers and global service providers will maneuver their way to operate in the French market. Outsourcing and partner options for enterprises also will increase, creating opportunities for accelerated digital transformation.

To learn more about our insights in France and other European markets, please reach out to [email protected] or [email protected].

Oracle Wins Over Microsoft and SAP in the Cloud ERP BigTech Battle

September 18, 2019

As part of our enterprise platform services research, we reached out to 15 global IT service providers and some of their key enterprise clients to understand their views on the leading cloud ERP vendors: Microsoft Dynamics 365, Oracle ERP Cloud, and SAP S/4 HANA.

We then analyzed their input against five important parameters.

Who’s the winner? Oracle ERP Cloud.

Here’s a drill-down on our analysis of the five parameters.

Technology sophistication/product excellence

Microsoft and SAP are still struggling to migrate all the on-premise functionalities to their cloud offerings. In fact, many of the enterprises we spoke with consider Dynamics 365 and S/4 HANA simplified versions of their on-premise offering, but with some functionality gaps. On the other hand, Oracle has made significant headway in its migration and is stepping up to integrate emerging technology capabilities into its cloud offering. Microsoft and SAP also lack case study-based proof points that demonstrate the maturity of their solution.

Ease of implementation and integration

Although implementation completion time is consistent among the three vendors’ cloud offerings, there are significant variations among their ease of integration. Because of its Fusion middleware, Oracle ERP Cloud is considerably easier to integrate with on-premise systems and other third-party applications than the others. SAP ranks lowest on this parameter, mainly because of challenges associated with integrating other SAP cloud offerings, such as SuccessFactors, Ariba, Concur, and Hybris, with the core S/4 HANA and on-premise SAP products.

Commercial flexibility

Here, Microsoft fares better than both Oracle and SAP. It has a friendlier licensing model wherein it bundles its cloud ERP offering with CRM and other Microsoft products. In comparison, SAP’s limited features and functionalities make mid-sized enterprises its largest buyer group. And Oracle’s hosting environment isn’t particularly flexible; it is pushing to keep the NetSuite and Oracle ERP Cloud workloads in-house on the Oracle platform.

Talent availability

Because of Oracle’s and SAP’s strong presence in the on-premise ERP market, there’s an abundance of talent with the knowledge to be upskilled to implement, integrate, and manage their cloud-based offerings. In fact, supply is larger than demand. But Microsoft is struggling here, with a ~20 percent demand-supply gap for trained developers and integration consultants.

Overall customer experience

Over the past few years, Oracle has been able to improve its end-user experience with software updates. Microsoft is trying to create a better customer experience with its integrated enterprise offering. Dynamics 365 engagements are no longer just standalone ERP or CRM engagements; instead, oriented around a transformational impact message, they also encompass Office 365, Azure cloud services, and the Power platform. SAP is creating a better customer experience by collaborating effectively with its clients on implementation and maintenance issues. But it still delivers an inconsistent user experience between its on-premise and cloud version. While all three vendors have made strides in delivering a better customer experience, Oracle rose to the top on this parameter.

Our analysis shows that Oracle ERP Cloud is the clear, present winner in the war among the top three vendors. Although Microsoft and SAP are catching up with Dynamics 365 and S/4 HANA, and are doing great in specific niches, it will take some time before they evolve their offerings and establish some credible proof points across different industries.

Watch this space for additional blogs on the kind of challenges enterprises are facing with cloud ERP adoption, and what they should do to tackle them.

What has been your experience with cloud ERP? Please write to us at [email protected] and [email protected].

The Amazon Web Services Juggernaut: Observations from the AWS Summit India 2019 | Blog

May 24, 2019

Amazon Web Services’ (AWS) Summit in Mumbai last week made it clear that its trifecta juggernaut in customer centricity, long-term thinking, and innovation is giving other public cloud vendors a run for their money.

Here are our key takeaways for AWS clients, partners, and the ecosystem.

Solid growth momentum

Sustaining a growth rate in the mid-teens is a herculean task for most multi billion-dollar businesses. But AWS has an annual run rate of US$31 billion, and clocked-in a 41 percent Y/Y growth rate, underpinned by millions of monthly active customers and tens of thousands of AWS Partner Network (APN) partners around the globe.

Deep focus on the ecosystem

Much of this momentum is due to AWS’ heavy focus on developing a global footprint of partners to help enterprises migrate and transform their workloads. Taking a cautious and guided approach to partner segmentation, it not only broke out its Consulting and Technology partners, but also segmented its Consulting Partners into five principal categories: Global SIs and Influencers, National SIs, Born-in-the-Cloud, Distributors, and Hosters. This is helping AWS establish specific innovation and support agendas for its partners to grow.

This partner ecosystem focus is increasingly enabling enterprises to achieve real business value through the cloud, including top-line/bottom-line growth, additional RoI, lower cost of operations, and higher application developer productivity. And AWS’ dedicated focus on articulating business benefits such as operational agility, operational resilience, and talent productivity, along with the underlying tenets of the cloud economy, has helped it onboard more enterprises.

Cloud convenience will need an accelerated Outposts push

Enterprises are looking for cloud convenience, which often manifests in location-agnostic (on-premise or on cloud) access to AWS cloud services. To bring native AWS services, infrastructure, and operating models to virtually any datacenter, co-location space, or on-premises facility, the company launched AWS Outposts at its 2018 re:Invent conference. Outposts is expected to go live by H2 2019 for Indian customers. Despite this, AWS is trailing in this front, playing catch-up to Microsoft Azure, which launched Azure Stack almost a year ago (and previewed a version in 2015.) At the same time, AWS will have to educate its enterprise clients and ease their apprehensions about vendor lock-in challenges while leveraging integrated hardware and software packages.

Helping clients avoid consumption fatigue

Shifting the focus toward AWS’ innovation agenda, the public cloud vendor launched over 1,800 services and features in 2018. As enterprises grapple with the rising number of tools and technologies at their disposal – which can lead to consumption fatigue – this can manifest in different ways:

Large enterprises will often depend on system integrators to help them unlock value out of latest technologies – AWS’ success in furthering the partner ecosystem will be crucial here
For SMBs, AWS will build on its touchpoints with the segment, something that Microsoft and Google already enjoy because of their respective enterprise productivity suites.

What’s next on AWS’ innovation front

There seemed to be a lack of development on the quantum or high-performance computing front. Client conversations suggested that they are struggling to figure out the right use cases depending on whether they need more compute and/or data – something AWS can help educate them on.

Gazing into the enterprise cloud future

We do not believe enterprises will move their entire estates to the public cloud. Indeed, as they transition to the cloud, we expect the future to be decidedly hybrid, i.e., a mix of on-premise and public, as this approach will allow every organization to choose where each application should reside based on its unique needs.

To deliver on this hybrid need, product vendors are inking partnerships with virtualization software companies. And the services and product line-ups are piquing enterprises’ curiosity. To help stake its claim in this hybrid space, AWS Outposts does have a VMware Cloud option, which is AWS’ hardware with the same configurations but using VMware’s Software Defined Data Center (SDDC) stack running on EC2 bare-metal. But it will need to educate the marketplace to accelerate adoption.

The bottom line is that although AWS is facing some challenges on the competitor front – with Azure and a reinvigorated Google Cloud under Thomas Kurian – it is well positioned on account of a solid growth platform and ecosystem leverage, which it demonstrated at the 2019 India Summit.

Enterprises Should Jump – Carefully – on the Cloud Native Bandwagon | Sherpas in Blue Shirts

November 20, 2018

With enterprise cloud becoming mainstream, the business case and drivers for adoption have also evolved. The initial phase of adoption focused on operational cost reduction and simplicity – what we call the “Cloud for Efficiency” paradigm. We have now entered Wave 2 of enterprise cloud adoption, where the cloud’s potential to play a critical role in influencing and driving business outcomes is being realized. We call this the “Cloud for Digital” paradigm. Indeed, cloud is now truly the bedrock for digital businesses, as we wrote about earlier.

This is good and powerful news for enterprises. However, to successfully leverage cloud as a business value enabler, the services stack needs to be designed to take advantage of all the inherent benefits “native” to the cloud model – scalability, agility, resilience, and extendibility.

Cloud Native – What Does it Mean Anyway?

Cloud native is not just selective use of cloud infrastructure and platform-based models to reduce costs. Neither is it just about building and deploying applications at pace. And it is definitely not just about adopting new age themes such as PaaS or microservices or serverless. Cloud native includes all of these, and more.

We see cloud native as a philosophy to establish a tightly integrated, scalable, agile, and resilient IT services stack that can:

Enable rapid build, iteration, and delivery of, or access to, service features/functionalities based on business dynamics
Autonomously and seamlessly adapt to any or all changes in business operation volumes
Offer a superior and consistent service experience, irrespective of the point, mode, or scale of services consumption.

Achieving a true cloud native design requires the underlying philosophy to be embedded within the design of both the application and infrastructure stacks. This is key for business value creation, as lack of autonomy and agility within either layer hinders the necessary straight-through processing across the integrated stack.

In this regard, there are salient features that define an ideal cloud native IT stack:

Cloud native applications – key tenets

Extendable architecture: Applications should be designed for minimal complexity around adding/modifying features, through build or API connections. While microservices inherently enable this, not all monolithic applications need to be ruled out from becoming components of a cloud native environment
Operational awareness and resilience: The application should be designed to track its own health and operational performance, rather than shifting the entire onus on to the infrastructure teams. Fail-safe measures should be built in the applications to maximize service continuity
Declarative by design: Applications should be built to trust the resilience of underlying communications and operations, based on declarative programming. This can help simplify applications by leveraging functionalities across different contexts and driving interoperability among applications.

Cloud native infrastructure – key tenets

Services abstraction: Infrastructure services should be delivered via a unified platform that seamlessly pools discrete cloud resources and makes them available through APIs (enabling the same programs to be used in different contexts, and applications to easily consume infrastructure services)
Infrastructure as software: IT infrastructure resources should be built, provisioned/deprovisioned, managed, and pooled/scaled based on individual application requirements. This should be completely executed using software with minimal/no human intervention
Embedded security as code: Security for infrastructure should be codified to enable autonomous enforcement of policies across individual deploy and run scenarios. Policy changes should be tracked and managed based on version control principles as leveraged in “Infrastructure as Code” designs.

Exponential Value Comes with Increased Complexity

While cloud native has, understandably, garnered significant enterprise interest, the transition to a cloud native model is far from simple. It requires designing and managing complex architectures, and making meaningful upfront investments in people, processes, and technologies/service delivery themes.

Everest Group’s SMART enterprise framework encapsulates the comprehensive and complex set of requirements to enable a cloud native environment in its true sense.

Adopting Cloud Native? Think before You Leap

Cloud native environments are inherently complex to design and take time to scale. Consequently, the concept is not (currently) meant for all organizations, functions, or applications. Enterprises need to carefully gauge their readiness through a thorough examination of multiple organizational and technical considerations.

Our latest report titled Cloud Enablement Services – Market Trends and Services PEAK Matrix™ Assessment 2019: An Enterprise Primer for Adopting (or Intelligently Ignoring!) Cloud Native delves further into the cloud native concept. The report also provides the assessment and detailed profiles of the 24 IT service providers featured on Everest Group’s Cloud Enablement Services PEAK Matrix^TM.

Feel free to reach out us to explore the cloud native concept further. We will be happy to hear your story, questions, concerns, and successes!

Announcing our inaugural conference: Everest Group Engage, The Pragmatic Edge: Designing Your Future. Learn more.

Tag: Enterprise Cloud