The event began with an attempt to substantiate this claim from the participants' experiences. The consensus was that while there is a burgeoning trend of increased caution and nuanced understanding as cloud usage matures, it is generally accepted as a great enabler and integral to the success of an organisation. The escalating usage of cloud services, hence, seemingly contradicted the hypothesis of a 'cooling attitude' (much to the relief of cloud providers). 

Once this backdrop was set, the discussion veered towards the practicalities of cloud adoption. Unsurprisingly, the success and appeal of cloud services boiled down to mastering the basics within an organisation.

The conversation coalesced around the following topics: 

•          Governance and Controls

•          Accounting (inc. cost management and containment)

•          Multi-Cloud Strategy (environment management)

•          Resourcing

•          Business Type (business sensitivity)

•          Miscellaneous Factors: Insurance, Geography, Differentiators

Governance and Controls

The cloud's accessibility and scalability are both its boon and bane. Without a robust governance framework, costs can quickly spiral and poorly configured environments might risk operational data. Several attendees of organisations around the table reported establishing a Cloud Centre of Excellence (CoE), acting as a central control point without posing an impediment to access. The significance of automated environment monitoring with financial analytics and automated usage policies was also recognised, as a crucial means to avert 'bill shocks' and flag unexpected cost spikes.

Accounting

Accounting for cloud expenses and how it measures up against on-premises solutions for specific use cases or workloads emerged as a closely related subject to governance. The shift from capital expenditure (CapEx) to operational expenditure (OpEx) while adopting the cloud is substantial for businesses. On one hand, it reduces the need for significant upfront investment and the responsibilities of maintenance and upgrading infrastructure. On the other, it can lead to increased operating costs over time, depending on the usage.

The transition will influence financial reporting and taxation, as CapEx and OpEx are treated differently for accounting and tax purposes. CapEx costs are typically capitalised and then depreciated over the asset’s useful life, whereas OpEx costs are fully deductible in the period they’re incurred.

In summary, while moving to the cloud can provide businesses with potentially significant savings on upfront costs, each company must consider the long-term OpEx implications, including the potential for increased ongoing costs and the impact on financial reporting and taxes.  

Multi-Cloud Strategy

A prevalent trend among organisations is the usage of multi-cloud landscapes either to avoid an “all our eggs in one basket” resilience concern or to drive a best-of-breed approach for organisations with more specific workload needs (GCP for analytics as an example).

In addition to multi-public cloud, organisations are often combining private and public clouds to create a single solution. This can lead to many additional costs - data ingress and egress being an obvious issue; integration costs in solutions that span providers; inherent complexity and support overhead for multi-cloud. Then there is the complexity of providing resilience in a multi-cloud environment – how do we failover between clouds? Is that a consideration?  

Multi-cloud may seem like a good idea – but we need to go into the decision with our eyes open to cost and complexity.

Resourcing

The obvious point to make here is that cloud resources are scarce and in demand. The pandemic drove up usage and the market for cloud skills really heated up. The lack of cloud skills to keep pace with organisational demand can cause real issues in delivering projects and leave organisations floundering.  

Cloud deployments also tend to blur roles that used to exist in a more traditional on-prem world. “Cloud Engineer” covers many skills that were demarcated into separate roles (or even departments). This blurring can lead to issues with lowest-common denominator deployments – clear segregation of duties makes things much clearer.  

There was also a discussion here about the need to be clear about which skills you keep in-house vs which you outsource to the cloud provider – which will give you a competitive advantage vs which are needed to keep the lights on.

Business Type

There were discussions around whether certain business types are more inclined to cloud adoption. The group perceived that B2B organisations were generally more receptive to migrating to the cloud than B2C companies, primarily due to regulation and data privacy concerns.

Despite advancements, perceptions regarding privacy and suitability for low-latency applications continue to impact cloud deployment decisions. A shift in such perceptions lags the technological reality.

Miscellaneous Factors 

Other concerns expressed include insurance against possible failures of tier-1 cloud providers, geography-related data security issues, and the lack of flexibility in cloud environments to differentiate applications and use cases.

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In conclusion, the notion of a 'cooling attitude' towards the cloud was effectively debunked. The cloud continues to be perceived as a strategic enabler and the core principles of governance, control, management and accounting emerged as pillars for successful cloud adoption. Perhaps, the cloud has reached a phase of maturity where foundational elements trump technology and business outcomes, unlike its unruly teenage years.

Darren Armitage
Enterprise Architecture and Corporate Innovation Expert