Kathy Gibson is at IDC Directions – The cloud discussion is no longer just around the public cloud, but rather about cloud technologies and methodologies on a variety of platforms.
“Many CIOs have brought workloads back on-premise, but with a clear view of achieving cloud-like benefits,” points out Jon Tullett, senior research manager: IT services (Africa) at IDC.
These benefits are mostly seen to be internal, with a view to achieving operational efficiencies.
Business resilience is also seen as an important outcome, with organisations looking to strengthen the workforce, create new products and services, develop new business models and set up partnerships.
Business growth is the next benefit, in the form of catering to new customer and business segments – and acquiring, integrating or spinning off business, or undergoing internal consolidation
External growth, at the bottom of the list of achievables, revolves around entering new geographic markets, revamping financial planning and management, and revamping the supply chain.
Most of the technology and IT service investments are going into the urgent digital transformation concerns like security services, business process transformation, and application modernisation.
This is followed by enterprise management in the form of managed cloud services, data management and data lifecycle related service, digital workforce and workplace services, risk management and compliance.
Not as important for organisations is design; reaction and innovation services; IT architecture services; and long-term digital transformation issues like strategy consulting, cognitive service and intelligent automation.
Workforce transformation is at the bottom of the list, and this is an area of concern, says Tullett. “When we talk workforce transformation we mean learning and education is not as high a priority as it should be. Investing will yield great benefits for organisations. But there is still a dichotomy, and this results in dissatisfaction.”
Security and analytics investments are high priority, with cloud driving this increased risk awareness.
Emerging technologies are low down on the list – there is a lot of interest, but not much activity. These include edge computing, robotics/drones, hyperconverged systems, blockchain, AR/VR and 5G.
A trend that vendors and IT partners should be aware of is that cloud infrastructure is growing, and quickly.
“We asked CIOs how much of their infrastructure spend is on IaaS now, and how much it will be in a year’s time,” says Tullett. “We found that the share of companies spending more than half their investment on IaaS is 38%.
“This demonstrates it’s where their focus is, and that the benefits of IaaS are very much on CIO’s minds. They want the IaaS benefits regardless of what they are spending on.”
One research result that stands out is that South African CIOs are markedly less satisfied with the impact of cloud on their business. Migration challenges, unexpected costs, and scope/adoption creep are common concerns, with bill shock coming in as a the top challenge.
Sixty percent of CIOs said revenue was impacted by cloud; 50% said costs; 55% said profitability; 60% named customer satisfaction; 56% said employee/supplier satisfaction; and 60% said governance, regulation and compliance (GRC).
Among the biggest difficulties were deployment. The costs and fees ended up higher than promised (55%); prolonged implementation/deployment (52%); difficulty migrating services and data (46%); and poor integration experience (42%).
Executive challenges also created difficulties, with poor technical support and customer service at 50%; lack of governance and management oversight at 48%; and poor availability and uptime for managed services at 42%.
Skills were also highlighted as a major challenge, with 39% of organisations lacking the skilled resources required for their projects and 30% saying there is poor availability of training.
A lot of cloud deployment concerns come down to visibility, Tullett adds, suggesting partners could aim to give customers better insight into what the cost implications are, what they need to know, and what they are doing wrong.
“Getting better clarity and insight into consumption is very important.”
When they are talking to prospective partners, customers says that business flexibility is important, with strong customer support and service at 51%; deep industry expertise and industry solutions at 43%; and rapid innovation capability, intellectual property and co-innovation at 41%. Solution innovation is also important, along with hybrid vigour.
The vast majority of South African businesses are committed to the hybrid cloud environment – 94% saying they will implement within the next 12 to 18 months. Many of these companies will be looking to the industry to help them with the management of these multi-cloud environments, Tullett says.
“That creates a fantastic opportunity for the IT industry players who feel they have been marginalised.”
The services in demand are expected to encompass deployment, management, migration and support
Tullett concludes with some essential guidance for IT partners.
“Multi-cloud is the norm,” he says. “So position solutions with hybrid deployment as a known goal; emphasise manageability, efficiency, automation and integration across silos; application-specific deployments will move to inclusive strategic deployments.”
Partners should drive customer satisfaction, focusing on measurable outcomes across lifespan of projects; reducing technical debit, especially during migration, and simultaneous deployment projects; assisting technology champions within customers to set and manage expectations.
“Align with operational expectations,” Tullett adds. “Customers are moving beyond the cost of acquisition to focus on cost-efficiencies across technology silos; cost of skills, technical debt and foreign exchange variations will become more frequent so anticipate them.
“And focus on business process outcomes. Post-Covid expect a renewed customer focus on automation, process efficiency and re-engineering; leveraging data to inform and support business strategy is a top priority item for CIOs and board – so measure, analyse, predict.”