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Understanding the complete value of moving to the cloud continues to be elusive for even the highest achieving cloud leaders.
What makes a company a “Cloud Leader?” In 2017, CloudHealth Technologies released a survey called “Secrets of the Cloud Leaders” to find out. The results were illuminating. The survey of hundreds of IT executives identified a number of characteristics that separated top performers from the rest of the pack.
Recently, we decided to learn more about what makes Cloud Leaders tick. CloudHealth Technologies joined with Cloud Technology Partners (CTP) to conduct a second “Secrets of the Cloud Leaders” survey to uncover more insights about the best practices successful organizations are following. The survey is being released today. Here is a registration link to attend the webinar, which will discuss the findings and distill key takeaways.
To get some perspective on the goals and outcomes of the second annual “Secrets of the Cloud Leaders” survey, we sat down for a discussion with Melodye Mueller, VP of Marketing & Strategic Alliances at CloudHealth Technologies, and Jonathan Bumba, Chief Marketing Officer of Cloud Technology Partners.
The cloud computing industry does not suffer for a lack of surveys. Why conduct yet another?
Jonathan Bumba: There’s a lot of noise associated with most industry surveys – especially surveys about using the cloud. You get wildly different perspectives and they are rarely relevant or actionable for our clients. What we’ve done with the second version of the “Secrets of the Cloud Leaders” is to look for patterns of success – comparing the experiences of people who are realizing value in the cloud with those involving people who are not successful. Then we drilled into what are they specifically doing and sometimes more importantly, what they are not doing.
Melodye Mueller: We weren’t interested in sizing the market or covering old territory – how everybody’s moving to the cloud, what kinds of workloads are moving to the cloud, etc. That’s been done plenty of times. We focused on outcomes – what organizations are gaining in the cloud vs. what other organizations are struggling with. The fact is, the learning curve is huge. When you look at a survey like this, it’s not about the size of the market; it’s about what you have to do to succeed. That in itself makes it very different.
CloudHealth Technologies and CTP both work with customers to overcome common adoption challenges and up-level their cloud programs. How did the insight you’ve gleaned from your customer base factor into the survey process?
MM: Our customer base echoed a lot of what the survey respondents said. They’re struggling with how they adopt cloud, cloud workloads and cloud services. So, they have a lot of questions and they’re looking for best practices. That list of tactics, processes and approaches has basically become the Holy Grail in our industry. We work with customers day in day out, providing them with solutions that help them come up with those best practices based on where they are in their cloud maturity journey.
JB: Quite a bit, actually. More often than not, our clients have experienced a significant amount of trial and error before they come to us. It’s kind of like catching them at the moment where they move from the unconscious incompetence into the conscious incompetence. In other words, they want to move to the cloud and they know enough to know that they need help. Much of what the survey reveals about the drivers for both success and failure in the cloud are quite common.
Essentially, what we’ve been hearing is that transformations fail for one of three reasons:
- Leadership alignment is not only possible, it is essential! There are many tactics to help drive leadership alignment, but none as critical as grounding in a comprehensive, board-quality business case. Without this in place, it is simply a matter of time before someone, usually from the office of the Controller, starts asking questions that are difficult to answer.
- Projects were clandestine. Project leaders proceeded without knowledge of and buy-in from key stakeholders like the CISO and GRC. Once they get wind, they come in and shut it down until someone can prove to them the organization is either as safe as they are in their own datacenter or safer, before they let them proceed.
- They did not account for organizational change. This is very often the biggest blocker to success. We have found it very unwise to underestimate how destructive it can be to ignore the concerns being voiced by the rank and file. Even if the transformation is being mandated from the top, I am often surprised by the number of ways middle management and the front line can create friction or even stall a cloud transformation project.
We saw a lot of these issues reflected in the “Secrets of the Cloud Leaders” survey. What were the primary takeaways from Secrets of the Cloud Leaders?
MM: The commentary from the focus groups was pretty revealing. The participants generated increases in top-line revenue based on their cloud initiatives, but they couldn’t always articulate how they were getting there -- bear in mind, these are the leaders, not the laggards. That speaks to how difficult this journey can be; even best-in-class enterprises don’t necessarily have it all figured out. It wasn’t just about cost savings, either; a lot of it had to do with efficiencies and process. They did have a strategy, and they did have an organization-wide initiative, but they couldn’t necessarily say they were measuring specific KPIs.
JB: I think most of the high performers understand TCO savings, but they don’t have a complete grasp of the entire ROI -- things that translate into more intrinsic, yet greater value, like the reduction in time-to-market, uncovering new business models and revenue streams...even improving the ability to recruit top talent. Most often, they don’t go that extra mile. More often than not, most CIOs feel like the measurement leads to too much internal debate and fall back to more defensible TCO calculations. We feel this will eventually become a focus for more and more CIOs in the future.
Did anything about the results surprise you?
MM: It was a surprise that the Leaders had not fully baked how they were measuring success. They calculated return on their investment in very rudimentary ways. But they hadn’t really broken it down to a “cost of goods” calculation the way they would in a data center. If they’re taking advantage of their cloud environment at scale, why are they not thinking in some form or fashion about those same types of metrics?
JB: I would like to amplify what Melodye just said. I am not shocked by the findings of this survey, as it pretty much reflects what we at CTP see regularly. The leaders understand the industry best practices and try to apply them. This includes achieving leadership alignment, a board-quality business case, continuous measurement of success … etc. And those achieving less than optimal results? Quite simply, they need to understand that success is the cloud in achievable, but not inevitable. The first and most fundamental fact they need to understand is that everything is different in the cloud. The tooling, the processes, the entire operating environment … everything!
This is the second installment of Secrets of the Cloud Leaders. What did CloudHealth Technologies do differently this time around?
MM: We went much deeper to unearth concrete takeaways. The first time around we were looking to define what a cloud leader was, and we weren’t really sure what we were going to get. We found that there was a significant difference between the top and bottom tiers of cloud users, but we didn’t really learn a lot of specifics about what was driving them. They were generating ROI, but it wasn’t clear if it was based on cost savings or on other tangible things. This year we went back with the explicit goal of uncovering things that were very tangible: What do you mean regarding your return on investment? What do you mean you’re experiencing additional market opportunities? Then, by asking a new set of questions, we took it one step further by employing focus groups. That really gave us an opportunity to dig in and see what people meant when they said some of these things that can sound very generic.
Did the focus groups yield any additional insights or shed light on the survey findings in any way?
MM: It did amplify what JB and I were saying earlier: Even though cloud leaders were having more success, they didn’t have a core set of metrics or a real methodology that correlates with great success. That’s still evolving for them.
JB: I think it’s a real opportunity to educate the marketplace that even some cloud leaders are still “missing it” – that there are things you could be doing better. They need to do more in terms of continuing measurement and ongoing refinement. They need to get true visibility into their entire value – not just the TCO.
Earlier you said you wanted to provide actionable content. How do you envision businesses using the information from the report?
JB: As I just mentioned, success in the cloud requires a new way of doing just about everything – a whole new operating model. It requires significant effort to understand this brave new world, but it is absolutely worth it. The key message is it’s OK to get help and really understand the best practices high achievers leverage to achieve success. If you need help, you will inevitably ask … what should I do? Build, buy or partner? The pragmatic answer is all of the above (good place to link the article from Scott Mullins). You’re going to need help in the beginning. There is nothing more costly in terms of time and treasure, than having to undo the typical mistakes made in the very beginning of your transformation.
MM: It’s really about directionally how cloud users can create a successful strategy. What is the foundation? What does the groundwork look like? What are the things they need to consider? How do they go about making a decision? Do they have the expertise? Ultimately, taking information that the top tier provided and outlining a few improvements organizations can implement is going to be of enormous help. We just want organizations to go into it with their eyes wide open.