Cloud budget overruns are common. In 2021, 46% of European companies faced this budget scenario, according to IDC. Cloud cost control is therefore a discipline in its own right, FinOps.
This control of expenses, which can quickly soar for lack of supervision, is all the more critical in that it otherwise risks hindering the creation of value expected through the adoption of the cloud.
Cloud in most or all functions, but…
However, in this sector, French companies (more than 200 million euros in turnover) are already struggling. According to PWC’s Cloud France 2023 study, 94% of them say they experience “difficulties in creating value [tangible, NDLR] thanks to the cloud”.
It is difficult to achieve concrete results, but also missed objectives. Thus, more than 50% of the organizations surveyed consider that they have not “achieved the expected results in terms of reducing costs, improving resilience or even generating new revenue…”
Almost paradoxically, however, adoption has risen sharply, with 58% of executives explaining that “their company has adopted the cloud in most or all business functions”.
Without, however, the value being there. How can this gap between expectations and results be explained? Would technological promises not be kept? For PWC, the cloud first suffers from a “poor understanding of the issues”.
The firm believes that “deep confusion persists about the move to the cloud”. And PWC continues: “Migrating or running part of the company’s activity there does not mean that the latter is fully powered by this technology. »
The cloud, an IT topic for 40% of Comex
Clearly, decision makers would be expecting value even before they have truly led their cloud transformation. In addition, the study finds, business leaders would neglect the strategic aspect of such adoption.
In 40% of organizations, “the Comex believes that the cloud is only an IT subject”. Consequently, by reducing it to a technical dimension, it would not participate in the business development of the company, any more than it would help the trades, for example in shortening the time-to-market.
Among cloud users, the “Cloud Power Companies” therefore stand out, described by PWC as “champions of value creation thanks to the cloud”. The latter represent 25% of French organisations.
And if they stand out, it’s because they “succeeded in reinventing their activities”. And the obstacles to value creation? They are less confronted with it. Better, “they create them at a rate three times higher than that of other companies”.
The analysis of these champions makes it possible to identify key success factors. The study lists five. Among the actions to be taken is the approach. This must be “holistic, methodical and accelerated”.
5 leading stocks among Cloud Power Companies
The study also encourages collaboration between the various departments of the company, emphasizing cloud governance and supervision, anticipating regulatory constraints (as well as their evolution) and developing skills.
Regarding this last point, 48% of Cloud Power Companies also want to “develop their skills in native cloud development and cybersecurity in 2023”. According to an IDC study of September 2021 on the EMEA zone, the main obstacles to the adoption of the cloud are however financial before being HR.
Migration from the mainframe, on the other hand, comes up against both costs deemed too high (32%) and a lack of skills (32.6%), further assessed IDC. The firm also noted a diversification of cloud strategies.
Lift & shift represented 18% of approaches in Europe in August 2021, ahead of refactoring (11%), but behind replatforming (22%). In addition, 21% of companies opted for an on-premise maintenance. In fact, by that same date, only 4% of companies had modernized 100% of their applications with the cloud.