We have reached a tipping point in the deployment of Cloud services in the US. IDC predicts that next year nearly 2 in 3 enterprise IT organizations will deploy hybrid clouds. The federal government has issued a “cloud first” policy, which “mandates that agencies take full advantage of cloud computing benefits to maximize capacity utilization, improve IT flexibility and responsiveness, and minimize cost”. While the Cloud does provide a multitude of different options and flavors that can provide expansive benefits to organizations, it is still built on legacy technology that should give you cause to reconsider your cloud migration plans.
Why is my Cloud about to be considered a “Legacy” system?
1. IaaS is just a shift of yesterday's technology 3 inches to the right
Legacy systems are commonly known as old technology or defined as “being a previous or outdated computer system.” For this reason the most common cloud model, Infrastructure as a Service (IaaS), is built on the server and infrastructure technology of yesterday. IBM made OS virtualization available many years ago on its mainframes and VMware brought it to the masses over a decade ago. IaaS simply uses these existing technologies to host your infrastructure on a server-by-server basis in a vendor environment and moves the costs from capital expenditures to operational expenditures.
While there are certainly benefits to the IaaS model, it is not new or innovative. In fact, IDC estimates that by the end of 2016 “75% of IaaS provider offerings will be redesigned, rebranded, or phased out.”
2. Your business doesn't want "software" or "servers," they want "services"
Yesterday’s IT organization was focused on supporting servers and switches without a focus on the business. As a result, pockets of shadow IT started to develop in many business groups. These shadow IT groups were focused on acquiring services like CRM and Payroll. The business found out that they didn’t need or want to know how many servers were needed, they just wanted results.
Today many IT organizations have adopted an IT Service Management framework like ITIL or COBIT and are shifting to providing services to their internal clients rather than servers. While IT is presenting a service catalog, on the back end the infrastructure is still legacy servers. The IT of tomorrow won’t be focused on building and maintaining servers, they’ll be focused on enabling business and brokering strategic SaaS solutions.
3. Upgrades are complex and expensive
There is no doubt that technology powers most organizations. From the Human Resources department to the Sales team, software and the relevant data are critical to their business function. In order to meet growing demands to “do more with less” and use data to “make faster and better business decisions” software complexity has increased.
Oracle’s report “ERP UPGRADES: WHAT’S YOUR PHILOSOPHY?” is evidence of the growing complexity and expense of upgrades. In the report respondents indicated that 44% of Oracle ERP upgrades take 6-12 months and 45% required at least 24 hours of downtime. As reported by CFO Magazine the average ERP project “cost $2.8 million and lasted 16 months” for legacy ERP infrastructure implementations however, when moving to new Software as a Service (SaaS), 46% of companies claimed to see a cost savings of 41% or higher.
4. Unbundling is the future
Gartner has already announced that “CIOs Must Take Action to Address Fast-Approaching Reality of Legacy ERP." With the move from fat clients to web clients, users are more accustomed to using their web browser to consume services and expect. New API-enabled product suites, Master Data Management plans and data virtualization products like Cisco’s Information Server are making unbundling software and consuming best of breed services easier and faster than ever. Meanwhile legacy, monolithic ERP systems continue to require customization and enormous expenses to implement and maintain.
These large legacy software suites hosted on-premise and in IaaS environments may have been the answer yesterday but as Gartner has predicted, a significant number of companies are going to be moving away from “single-vendor megasuites” and towards “loosely coupled suites of cloud functionality.”
5. Best of Breed doesn't just apply to software, it applies to staff too
Business Intelligence, ERP, Data Warehouse, and many others require a specific skill set to implement, maintain and support. Depending on the market and the locale of an organization, obtaining these staff can be difficult and expensive. Why should IT organizations have to balance paying for full time specialized technical resources that don’t have economies of scale and hiring lesser skilled staff and hoping they can learn these complex software products? IT should be moving away from a mere “keeping the lights on” mentality towards having its staff focused on new products and innovative ways to do business while outpacing its competition.
As you move away from IaaS and towards SaaS solutions, organizations will see the advantages and savings by consuming best of breed services supported by specialized staff with the economies of scale that only a service provider can provide.
A strong plan and deep understanding of your current business requirements as well as the target Cloud service models and providers is key to success. Whether you are in the evaluation phase or ready to move forward with new Cloud service consumption solutions, NTT DATA is here to help you through the full Cloud Lifecycle.
- Nathan Aeder, Associate Director, Cloud Advisory Services – Senior Cloud Strategist