Looking for ROI in all the wrong places: How to get your cloud value back on track

by | Jul 15, 2022

A version of this article was originally published in Forbes.

Theoretically, a case could be made for running your workloads, data, and applications entirely from on-prem servers.

But realistically? That use case is vanishingly small. Nearly all companies can benefit from the cloud. And most organizations are well aware of the benefits cloud modernization confers.

You’ve heard the touts: Cloud migration leads to faster run times, greater efficiency, and — here are the magic words — significant cost savings. As with any major business move, return on investment drives a substantial number of cloud decisions. But when you make those calls without a strategy specifically tailored to cloud environments, the risks add up.

You wouldn’t relocate your corporate headquarters without significant strategic reasoning. Relocating your technical real estate ought to trigger the same level of analysis and corporate soul searching. If you aren’t seeing the ROI you expected from your cloud investment, you may need to consider a more strategic approach.

Why you’re not seeing cloud ROI…and what you can do about it

Companies have technology problems: aging servers, feral architectures, legacy applications, redundant workloads, wild west dev shops…the list goes on. Faced with a mess on the premises and a cloud mandate from leadership, it’s easy to understand why one of the most common strategies for cloud migration is lift-and-shift.

All too often, though, a one-for-one move to the cloud is used as a shortcut to avoid having to create a full-blown cloud strategy and roadmap. Here’s how to avoid common ROI pitfalls.

ROI pitfall: Unexpected costs

Moving to the cloud can be a significant cost-saving strategy for your information technology budget, but it can also have the opposite effect. Without taking the time up-front to tune workloads and assess usage, you could wind up paying more for cloud storage/use than you used to spend for an on-prem solution.

Understanding cloud pricing models, including getting clarity on all the variables that affect pricing in the cloud, couldn’t be more important — it isn’t an apples-to-apples comparison to on-prem. Cloud costs are directly related to resources consumed, so lifting and shifting without a strong strategic foundation can cannibalize your savings.

To save more in the cloud environment, consider:

  • Resizing: Do all of your workloads run at capacity all the time? Or are they often over-provisioned? Would a lower consumption rate with surge capacity work better for your needs?
  • Retiring: Are any of your applications or workloads redundant? Lift-and-shift migrations can shed light on previously siloed tasks that could be streamlined to reduce cloud consumption.
  • Replacing: Would a different solution make more sense? A cloud migration offers the opportunity to rethink your legacy applications and combine or replace some of your workloads and applications.

ROI pitfall: Ungoverned actions

Your teams may be used to a high degree of autonomy, with different business units responsible for their own tech and data usage. Once you move to the cloud, however, that shadow IT culture can cost you. If users deploy new resources and enable additional capabilities to the cloud at their usual rate, your spending can escalate quickly.

To avoid painful consumption spending, here’s how a fresh look at policies and procedures can help:

  • Rethinking: This is a good time to standardize processes around development, quality, testing and change management.
  • Recommitting: A cloud environment makes governance more important for your organization than ever. Take the opportunity to recommit to strong governance standards across your organization—and be sure you have change management plans in place to support the shift.

ROI pitfall: Unanticipated fluctuations

Even the best cloud strategies can’t always anticipate the variability of cloud usage. Costs and efficiencies of different cloud platforms might vary month to month or even week to week. Some companies try to account for the volatility by building each of their workloads four or more different ways so they can quickly shift from one cloud provider to another. Others get fed up and go all in with one platform. Neither option is cost-effective.

To make the most of cloud price fluctuations, consider new ways of working, like:

  • Replatforming: Are your legacy systems still serving you well? Could the costs of a hardware or software upgrade be balanced out by greater efficiency or better cloud usage over time?
  • Refactoring: One way to manage cloud environments is containerization. As I wrote in my previous Forbes article, “Once your workloads are containerized, adding automation can save you even more by establishing, testing, and refining models for workload placement without relying on time-consuming manual decisions.” Google Cloud Platform, AWS, and Azure all have forecasting tools you can use to further refine your automation models.
  • Rehosting: Containerized workloads enable on-the-spot decisions about where to run a task. Realizing savings then becomes as easy as a drag and drop to the cheapest or most efficient cloud or on-prem location.
  • Rearchitecting: Could developing cloud-native applications serve the same needs but in more efficient, modern, or cost-effective ways?

Why you should start with the end in mind

While each of these tactics has value, the best way to avoid surprises and see ROI for your cloud investment faster is to start with a strategy.

A cloud mandate without a cloud strategy is a recipe for cloud disappointment

Up-front strategic planning can save you significant rework and help you avoid costly mistakes with your cloud migration. To maximize your cloud ROI, key topics to include in your strategy are:

  • Evaluating your current architecture, technology, or processes: What’s working and what could be improved?
  • Identifying redundancy and opportunities for improvement: What could be streamlined in your code, workloads, or data?
  • Articulating fluctuations in your use patterns: How are your workloads prioritized? Could your data and storage needs be tiered? What might optimal provisioning look like for your organization?

When it comes to cloud ROI, grounding your operations and tactics in strategy is non-negotiable. The more intentional your organization is about its cloud deployment, the more quickly your ROI will outpace expectations.

About the author

Steve Daly
Technology Practice Director
Steve Daly is the Technology Practice Director at Fusion Alliance and specializes in cloud-native development and application modernization. He brings more than 30 years of experience providing IT solutions to start-ups, local, state, and Federal governments, Midmarket as well as Fortune 500 companies and organizations.

Connect with Steve on LinkedIn

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