The True Business Value of Cloud Migration

The Hackett Group Senior Director and Global IT Advisory Practice Leader Chris Key talks with Tech Transformation Practice Principal Mike Fuller, Senior Director Jay Ruffin, and Tech Practice Principal Scott Holland about key findings from The Hackett Group’s recent Cloud Migration Study, the largest-ever study of its type.

Show Notes

Welcome to The Hackett Group’s Business Excelleration Podcast, where – week after week – we hear from experts on how to avoid obstacles, manage detours, and celebrate milestones on the journey to world-class performance. Today’s episode is hosted by Chris Key, Global Advisory Practice Leader at the Hackett Group. His guests are Mike Fuller, Principal in the Tech Transformation Practice, Jay Ruffin, Senior Director, and Principal Scott Holland. The focus of today’s discussion is the results of the largest ever cloud migration study conducted to date.

This study was conducted in October-December of 2021 and represented a wide demographic of global companies ranging from $500 million to over $30 billion. The goal was to identify real business value generated by the migration of infrastructure and application to the Cloud. Of the 1,000+ companies that participated, data was collected from 4,000 applications pre and post Cloud. They considered cost, availability, scalability and operations. About 82% of the companies were multi-cloud.

The biggest difference between the top and average performers was their approach to technology. Top performers saw technology as part of their DNA and course strategy, while the averages were just looking for a way to reduce cost. Scott believes it important to recognize that the value of cloud migration goes way beyond cost and scalability. The Cloud promotes availability, agility and ease of operation. In terms of top performers, they were more likely to migrate IT infrastructure and security and migrated much sooner than everybody else.

There are four primary ways which organizations are migrating workloads to the cloud. Companies that do the work up front see much more benefit as compared to companies who go to the lift and shift path. At the end of the day, cloud is the basis of digital operations. The most common goal among all performers was reducing cost. Among top performers, however, the most common goal was to utilize the cloud to enhance their current services and products. Top performers are migrating 52% more apps than others. The cloud is becoming the norm and those who don’t migrate will likely be left behind.

Referring back to our key issues study, Jay defined the Cloud as a foundation for many of these goals. For example, it allows for faster time to value, cost efficiency, engagement from anywhere, and much more. Top performers were able to reduce their infrastructure spend by 37% compared to average performers’ 12%. This significance all comes back to how they manage their portfolios overall. Shifting to security and the influx in data breaches and ransomware attacks, Mike speaks to the board’s watchful eye of these issues. After cloud migration, organizations on average saw a 44% reduction in cyberattacks, while top performers’ improvements were even larger.

Today, system downtime basically disables a business from operating and deters users. In 2020, the average downtime was 80 minutes and cost about $5,000 an hour. The availability of the cloud is even more critical in this light. The cloud was built for availability. The study showed how much the cloud allows users to shift responsibilities and resources to focus on the most important things, specifically for developers. The bottom line is once you make this shift to the cloud, developers can stop focusing on mundane things and begin working on exciting features like functionality. In terms of development methodology, Scott explains that the cloud has knitted the notion of agile and DevOps together which provides a high scalability and low cost, making it easier to deploy agile techniques. With regards to speed and customer value, this is critical in the world we live in.

As the conversation wraps up, we hear the biggest noticeable changes revealed in the study. When thinking about the cloud, companies have to look beyond just the cost savings and consider the aspects discussed in today’s episode. Furthermore, the cloud should be considered as a foundation for operations and an enabler for the future of the workforce moving forward. Before dropping the mic, Mike and Scott highlight the exciting innovations coming from The Hackett Group in this area today.

Timestamps:

• 0:47 – Welcome to this episode, hosted by Chris Key.
• 2:06 – Mike outlines the study.
• 4:30 – Differences between top and average performers.
• 5:25 – The goals and values achieved.
• 7:34 – Actions taken by top performers.
• 9:10 – 4 primary ways companies are migrating workloads to the cloud.
• 12:33 – Common goals and targets of these migrations.
• 17:08 – Cloud migration as it relates to the key issues study.
• 19:11 – Discussing efficiency.
• 22:30 – The improvements in security after migration.
• 30:07 – Innovation improvements.
• 32:45 – What we’re seeing from modern development methodologies.
• 35:41 – Biggest noticable changes.
• 38:49 – Final recommendations for organizations migrating to the cloud.
• 42:20 – Exciting things happening today at Hackett.