Understanding the current state of cloud transformation

To unlock transformational business performance, enterprises must be able to employ applications and data at scale across the enterprise IT landscape. Mastering hybrid cloud enables these capabilities with speed and security.

The IBM Transformation Index: State of Cloud helps establish an advanced view into the state of cloud transformation year after year. This informs technology investment for global businesses and allows organizations to benchmark their progress.

The development of this index is detailed in a new report from the IBM Institute for Business Value (IBV), “A comparative look at enterprise cloud strategy: IBM Transformation Index: State of Cloud.” As described in this report, the index is informed by deep data analysis of survey responses from 3,000 C-suite business and technology leaders across 12 countries and 15 industries. The survey highlights key findings that allow business leaders to evaluate and innovate hybrid cloud management.

Hybrid cloud has become the dominant architecture, but few continue to innovate and manage cloud environments holistically

The Index points to a strong correlation between hybrid cloud adoption and progress in digital transformation. In fact, 71% of those surveyed think it’s difficult to realize the full potential of a digital transformation without having a solid hybrid cloud strategy in place. At the same time, only 27% of those surveyed possess the necessary characteristics to be considered as “advanced.”

When companies first started migrating to cloud they assumed it would give them scalability, reduce costs and reduce technical debt. However, for this to happen, organizations must first determine how they want to connect the cloud assets and the rest of their estate to enable new ways of working. Adding more clouds does not address business objectives; companies need to create a solid hybrid cloud strategy that helps deliver the capabilities needed to achieve the business outcomes.

The initial excitement with respect to cloud is now shifting toward businesses partnering with the CIO, asking questions such as:

Why should I move to cloud?
How will it accelerate achieving my business objectives?
What capabilities do I need before I can leverage the cloud?
Which applications are best suited to move, modernize or build new?

A holistic strategy will help answer these questions and help companies define an architecture for delivering a single, secure hybrid cloud platform that supports the business need.

Lack of skills and talent is a limiting factor

When it comes to managing their cloud applications, 69% of respondents say their team lacks the skills needed to be proficient. This, combined with each cloud generating its own operating silo, puts constraints on the efficiency and effectiveness of people’s work.

To develop a cadre of cloud-skilled resources and create a single effective hybrid cloud operating model, consider the following steps:

Start with defining a strategic workstream on a people agenda
Empower a cloud Center of Excellence (CoE) to bring the hybrid cloud operating model to life to incubate and hone the necessary skills
Accelerate execution and empower your people with a skills and experience development program to thrive in the hybrid cloud operating model

As you are on this journey, define the work required for hybrid cloud operations first and adjust your organization chart second.

Businesses have the tools to secure workloads in the cloud, but challenges exist

Though the adoption and use of security tools is ubiquitous, one thing that stands out in the survey results is that security is a concern for a large number of respondents who believe public cloud is not secure for their data.

More than 90% of financial services, telecommunications and government organizations who responded have adopted security tools such as confidential computing capabilities, multifactor authentication and others. However, gaps remain that prevent organizations from driving innovation. In fact, 32% of respondents cite security as the top barrier for integrated workloads across environments, and more than 25% of respondents agree security concerns present a roadblock to achieving their cloud business goals.

A modern security model must align with a dynamic hybrid cloud infrastructure while moving at the same pace as innovation happening at the data and application layer. This approach embeds security into the hybrid cloud product development process. It keeps system owners and developers accountable for employing security and privacy best practices in each code release, all the way down to the level of the workload.

Regulatory and compliance roadblocks can stand in the way of cloud goals

As regulations rise, so too do compliance challenges. 53% of respondents believe that ensuring compliance in the cloud is too difficult, and nearly one-third cite regulatory compliance issues as a key barrier for integrating workloads across private and public IT environments. This is particularly true for highly regulated industries like financial services, where more than a quarter of respondents agree that meeting industry requirements is holding them back. Embedding these requirements as core to the hybrid cloud architecture and operating model is crucial, as this will remain an ongoing need.

There is a lot of expectation about what cloud can do for business transformation, and some growing awareness about what it will take. There is a still a way to go towards mastering hybrid cloud.

As IBM Consulting works with clients across the globe, we see five common challenges on the journey to mastering hybrid cloud: architecture, people and operations, security, finance and the partner ecosystem. Luckily, these aren’t insurmountable. The truth is, you’ve probably solved similar challenges before, just not in the specific context of a hybrid cloud environment where public, private and on-premise IT landscape is today’s norm.

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