Want to know if your organization has the right characteristics and culture to successfully adopt cloud computing? I recently ran across a new cloud computing study that might provide the answer.
“Our approach was to try to look into the future and determine what capabilities and kinds of organizations are necessary for a successful migration to the cloud,” co-author Arun Sundararajan told me.
Sundararajan (associate professor of Information, Operations and Management Services at the NYU Stern School of Business) and two colleagues surveyed 23 CIOs and high-level IT managers at U.S. and Canadian companies that use or have evaluated use of cloud services. The companies ranged in size from 180 to 170,000 employees, with annual revenues that varied from $1 billion to $100 billion.
The take-away? A strong partnership between IT and business units, operational agility, and a knack for modeling new technologies to fit unique business needs are critical in order to make the most of cloud computing.
A key finding was that organizations with a strong culture of partnership between IT and business units are likely to find the most success in the cloud. What’s more, these stakeholders must be nimble and creative in combining available technologies and processes in ways that best meet business needs.
Agility doesn’t stop with implementation however. The capabilities of cloud solutions will advance over time—probably very quickly—and smart organizations will commit to a constant adoption of new services. In other words, you can’t just implement it and forget it.
Technology consultants often stress the importance of managing relationships with public-cloud suppliers, and the survey validates that advice. Sundararajan says organizations that have previously outsourced IT functions hold an advantage because they have experience in managing third-party relationships.
“Understanding and managing vendor relationships is especially important with cloud computing because a better vendor relationship gives you a better view of the capabilities of the provider’s services—more so than we expected,” he says.
And what about security, that enormous elephant in the room? Sundararajan told me that the survey didn’t ask respondents about the safety of sensitive data and apps in the cloud. But in follow-up interviews, researchers did find—and this is no surprise—that respondents remain hesitant to migrate apps that are mission-critical or central to their competitive advantage. This perceived lack of security is the real hurdle for cloud computing, but we’re starting to see signs that CIOs are gaining trust in the level of security provided by cloud vendors
Sundararajan says most respondents who already use cloud services have adopted mainstream SaaS solutions, such as customer relationship management (CRM) and human resources functions. Implementations of Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) were comparatively rare among respondents.
Lower costs and rapid implementation are seen as top advantages of the cloud model. In order of importance, the primary benefits of cloud computing were cited as:
* limited upfront investments
* quick implementation
* the ability to convert IT services from fixed to variable
Another frequently mentioned advantage was access to best-of-breed applications that SaaS offers.
The survey results are pretty encouraging for companies considering a move to the cloud because they indicate that the cloud can help organizations grow their overall value—and not just cut IT costs.
“But you can’t achieve that unless you have the right organizational capabilities,” Sundararajan says. “That was surprising in a good way, because it told us something new about the economic value of SaaS.”
He is also the inventor of the patented meshDETECT, Secure Prison Cell Phone Solutions.
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