Enable javascript in your browser for better experience. Need to know to enable it? Go here.
What causes poor cloud ROI — and how to fix it

What causes poor cloud ROI — and how to fix it

The headline benefits of moving to the cloud are enough to pique the interest of any enterprise decision-maker. But what happens when it fails to deliver on those big promises? And more importantly, what can you do to get things back on track?


Ever since it first emerged, cloud technology has been the subject of big promises about the value it can deliver for enterprises. Lower costs, greater scalability, increased adaptability and agility, reduced management workloads. Chances are, you’ve spent most of the last decade hearing about them.


At the simplest level, those are all things that moving to the cloud can help businesses achieve. But gaining those benefits isn’t always as simple as some have made out. 


According to a recent study, just 35% of organizations report fully achieving their expected benefits after moving to the cloud.


Across the millions of organizations that have made the shift, that’s a lot of disappointed customers.


In this article, we’ll look at why some of the headline benefits of cloud have proven elusive for some, and share practical cloud remediation advice to help you get back on the path to strong ROI if your cloud plans haven’t quite lived up to expectations.



Where are things going wrong?



Generally speaking, there are three broad reasons why cloud deployments don’t deliver their desired ROI:


  • Companies lift and shift their entire on-premises infrastructure into the cloud, creating a cloud-based copy of everything they had on-premises — including every point of inefficiency


  • Ease of scalability and the ability to provision limitless capacity leads to higher costs than those experienced on-premises


  • Moving to the cloud introduces new security challenges — whether that’s overzealous control of cloud environments that limits flexibility, or poor security management that introduces new vulnerabilities


Each of those issues can be highly nuanced, so let’s break them down in detail to see what drives them, and what organizations experiencing them can do to resolve them.


Scenario #1: The wholesale lift and shift



“Moving to the cloud can help you increase agility, improve adaptability, accelerate delivery times, and cut costs.”  While true, that statement is a little bit reductive. In reality, if you pick up your entire data center and simply shift it into the cloud, you can’t expect to immediately gain all of the benefits that cloud can deliver.


If your apps and infrastructure aren’t cloud native, what you’ll end up with is a copy of your on-premises technology, deployed in the cloud — complete with every inefficiency and a few new points of friction caused by cloud compatibility issues.


Unsurprisingly, that doesn’t add up to strong ROI. It’s a situation countless organizations have found themselves in over the past decade. They invest heavily in a cloud migration and see little or no benefit from it. Then they face the extremely difficult challenge of securing buy-in for further modernization and transformation, just to get to the point that they thought shifting into the cloud would bring them to in the first place.



What can you do about it?



Investing years into a cloud migration and not seeing clear benefits from it isn’t a very comfortable feeling. But this is a very common step on a lot of enterprise cloud journeys. If you do find yourself in this position, you’re closer to realizing strong cloud ROI than it may appear.


Remediation begins by recognizing that the path to cloud ROI isn’t quite as simple as it’s often portrayed. Lifting and shifting alone typically won’t deliver the benefits you’re looking for. To gain them, you’ll need to:


  • Clearly define your goals and measures of success, to help you understand where you might want to focus any rearchitecting efforts, and prioritize what, where, and how you transform from here


  • Develop strong cloud skills and ensure that your entire team is ready and equipped to operate in the cloud. The shift to cloud means big changes for how teams work, and it’s a huge change that they’ll need to be supported through


  • Re-evaluate your applications and architecture to root out points of friction, sunset any end-of-life capabilities, and remove complexities that you don’t want to be part of your operations in the cloud


  • Re-architect for the cloud to help your applications become cloud-native — ensuring they’re optimized for cloud deployment and able to be managed, delivered, and iterated on as flexibly as possible


  • Identify where you can make use of commodity cloud vendor services and carefully evaluate which of your existing capabilities are no longer necessary within your new cloud environment


  • Identify licensing problems caused by moving to the cloud and shift away from affected solutions to help make costs more manageable and ensure that your entire estate is future-ready



Scenario #2: Cloud costs spiraling out of control



Virtually limitless scalability is one of the most appealing benefits of cloud. With the power to spin up new environments and gain new capabilities whenever you need them comes the ability to control costs precisely, and only ever pay for what you use. But, without proper governance, it also opens the door for costs to spiral out of control.


Being able to help themselves to the resources they need might be a huge benefit for individual teams across an organization. But if that access and the corresponding cost allocation isn’t managed well, organizations can rack up huge cloud charges very quickly — negating the cost benefits of moving to the cloud.



What can you do about it?



Spiraling cloud costs is primarily a governance issue. To get costs under control so your cloud deployments are delivering ROI, you must first make sure you have full visibility of cloud usage, utilization, and spend. These actions can help:


  • Re-evaluate your account structures and review how you track cloud spending. Often this can be done without having to remove the freedom of self-service that teams love about the cloud, instead we ask teams to be accountable for their cloud spend


  • Use automation to ensure that unutilized instances and services are shut down when they’re no longer needed. However, you should approach this with caution to avoid unplanned outages of essential services or works in progress


  • Tag and monitor all your cloud resources to help teams accurately track what you already have, and avoid unnecessary duplication of spending and effort. Accurate tagging of resources is often a better first step than locking down access



Scenario #3: Mismatched security strategies



The move to cloud represents a big shift and a lot of new challenges for security teams. There are new data sovereignty considerations to make, new environments and connections to secure, new delivery pipelines to lock down, and a whole new landscape and perimeter to master.


It’s a time of change, and one that demands effective action. But if those actions are too extreme or too relaxed, security can quickly start to damage cloud ROI.


A lack of cloud-native security policies and controls can lead to poorly-secured environments, weak access controls and even completely exposed instances and buckets. On the flipside, wrapping cloud services in rigid, legacy security solutions can quickly reduce the speed and agility advantages they offer.


In the cloud there's no such thing as a "test environment" or "development environment" that doesn't need security. These environments may not have been secured the same as production in on-premise data centers. Every environment in the cloud needs to be secured against hackers.



What can you do about it?



If your security strategies have started to impact the value you’re seeing from your cloud investments, you need to:


  • Trust your cloud service provider. Major CSPs have some of the most advanced security capabilities in the world. In general, the move into the cloud today represents a significant step up in security for most organizations


  • Make sure your security strategies are cloud native and avoid applying the same security principles to your cloud environment that you used on-premises


  • Pay special attention to international movements of data. Moving data between zones and data centers is almost too easy in the cloud, and can quickly cause issues if not properly controlled


  • Keep a strong focus on security fundamentals like password management, access control, device-specific permissions, and ownership of cloud instances and services



Above all, don’t forget to reflect



Whichever one of these scenarios you may find yourself in, and however you remediate the situation and get yourself back on the path to value, it’s extremely important to look back and ask, ‘How did we get here?’


If you have found yourself in one of these scenarios, it means something has gone wrong, whether it’s insufficient planning, poor decision-making, or just a misunderstanding of what the shift to cloud actually represented for your organization. 


Nobody is advocating for getting lost in an unproductive blame game. But it’s important that you have the right leadership in place to prevent situations like that happening again. Otherwise, you may find yourself in a never-ending cycle of remediation.


Cloud journeys are just that — journeys. One wrong turn doesn’t mean you’re irredeemably lost; that your costs are sunk with no prospect of any return. Success with cloud will mean your organization has to think differently about infrastructure — today is as good a day as any to start.

Want to get the most for your enterprise from cloud?