From the mid-noughties onwards and especially since the Covid crisis, enterprises of all sizes have been flocking to the cloud, entrusting an ever-increasing proportion of their data and workloads to third parties.
In April, for instance, consumer goods giant Unilever moved all of its 400-plus household brands to Microsoft’s Azure platform, completing one of the largest cloud migrations ever seen.
In November 2022, DIY group Kingfisher – the owner of B&Q and Screwfix in the UK – announced a five-year £80m deal with Google Cloud to move on-premises services, including its ecommerce platform and test environments, to the cloud. It plans to scale up from offering 300,000 products on the B&Q website to more than 4 million over the next few years.
Such massive, wholesale migrations indicate a significant change in how organisations view the cloud. A growing number of companies, particularly larger ones, are coming to treat it as their default option when it comes to data storage and workload hosting.
It’s not only businesses that are looking to the cloud as their standard solution. The UK government recently updated its tech procurement guidance to state that public sector bodies should consider public cloud services first and seek out an alternative only when these aren’t a feasible option. This approach is mandatory in Whitehall and strongly recommended to the wider public sector.
Roy Shelton, CEO of IT support and services company Connectus Business Solutions, expects the cloud-as-default approach to be the number-one deployed strategy by the end of 2025.
“The current economic challenges will fuel greater adoption of cloud-first solutions, as companies seek to minimise capital investments, reduce internal costs and outsource more non-core activities,” he predicts.
Benefits of the cloud-first approach
While big corporations have tended to be the most prominent adopters of the cloud-first approach, smaller firms and startups have been leading the way, as they are less likely to be encumbered by unwieldy tech stacks and legacy processes. In fact, there is an entire generation of cloud-native companies, whose business models and operational processes have been designed with the cloud in mind.
Among the younger businesses that have made the switch is insurance firm Inigo, which was established in 2020 and became a cloud-first concern in nine months.
Inigo’s chief operations and technology officer, Erdal Atakan, says that one of the main benefits of the cloud-by-default approach is that it offers “new capabilities without requiring large infrastructure and security teams, reducing the need for physical space and equipment maintenance. It also makes it easier to flex and scale your operations up (and down) as and when required.”
Canterbury Christ Church University is another organisation that’s come to view the cloud as its standard choice for hosting new services and applications. The university’s platform and systems manager, Dave Hailwood, reports that this change of approach has been advantageous in several ways.
“It enables us to be quicker at reacting to technological developments and adopting new features,” he says. “We can test something quickly and create a proof of concept without committing to a large investment in new hardware. If testing is successful, we can scale the new feature out to production. If not, we can simply turn it off.”
Hailwood adds that applying a cloud-first approach and making better use of software as a service in this way shifts more of the responsibility for infrastructure maintenance to those better placed to do it.
“We can leave the vendor to think about low-level hardware management while we concentrate on delivering a good service to our staff and students,” he says.
The reality of cloud costs and complexity
Despite much of the marketing hype talking up the ‘simplicity’ of public cloud services, it’s worth remembering that managing a migration can be a complex process that may be beyond the capabilities of some smaller organisations’ in-house tech departments.
Even the 68-strong IT team at Canterbury Christ Church University encountered unexpected problems during the Covid crisis while enabling remote access to campus PCs across the board with Microsoft Azure Virtual Desktop. It ended up having to enlist a third-party migration specialist called Nerdio to make the process more manageable and cost-effective.
Cost is obviously a huge consideration for any firm thinking about adopting a cloud-first policy. According to a survey of enterprises published by the Uptime Institute in March, 42% of respondents said that they had spent more on cloud services in 2022 than they had expected to, while 33% reported that they had moved applications back from the cloud to an on-premises data centre or colocation facility.
With the rise of generative AI and the growing importance of data management, cloud usage and the costs thereof are only likely to increase. It’s little wonder that pay-as-you-go cloud (PAYG) services are gaining in popularity.
Andrew Bithell is account team lead at CTS, one of Google’s largest dedicated cloud partners in Europe. He notes that, “with the cost-of-living crisis still hot on everyone’s radars, companies need to evaluate the best strategies for making smart choices about their legacy systems and optimising these to get the best return on investment. While it’s hard to forget how expensive IT systems are, businesses are evolving constantly and adopting digital innovations apace. But not everything needs to be in the cloud. Firms should ask themselves: ‘Will this deliver a return if we put it in the cloud?’ If the answer is ‘no’, it’s time to re-evaluate.”
Bithell adds that cloud computing gives users the scope to “modernise and ensure that they’re using open-source licensing and cloud-native technologies. But finding maximum value means modernising, utilising the available technology and transforming existing architecture into something that’s more cloud-like and cost-effective.”
Organisations should therefore not expect an instant reduction in their IT costs simply because they’ve adopted a cloud-first policy. They have to reimagine and refactor their architecture, according to Bithell, who stresses that the cloud “is always going to be expensive” if they’re not willing and able to adapt.
Cloud first does not mean all cloud
A report published by Gartner in April predicted that three-quarters of organisations will have adopted “a digital transformation model predicated on the cloud as the fundamental underlying platform” by 2026. Despite this, some significant barriers to going all-in on the cloud remain.
Todd Moore, senior vice-president of encryption products at Thales Cloud Protection & Licensing, explains: “There will always be the need for on-premise or hybrid workloads based on latency, performance and security. And requirements such as digital sovereignty may always force the need for some on-premise elements.”
Moore stresses that a cloud-first approach is not the same as an all-cloud policy. Under the former, there will always be a balance between the various options based on the organisation’s technical and operational needs.
Ultimately, organisations adopting a cloud-first strategy must, just like any other firm, focus on extracting full value from each investment in cloud tech, keeping a keen eye on the returns while minimising the risk of incurring unexpected costs.