Cloud strategy – what is it?
3 Jan 21
Cloud services or “cloud” is in focus right now. And all indicates this is nothing temporary. Instead, it is natural that the era of “onpremise” is about to end and that all delivery of IT will take place using an external hosting party and not as a local installation in the basement. But the fact that IT is run by an external party does not automatically mean that it is a cloud service, does it?
When previously discussing how the hosting of IT should be handled, the customers choose between “local hosting” or “outsourced hosting”. Even though the same discussion occurs today, the terminology is different, which can create a certain ambiguity about what is meant. Let us take the example of a customer actively choosing to purchase and upfront pay for an application instead of subscribing to it but at the same time choosing to outsource the hosting of the application to an external hosting partner. This is according to the definition “onpremise” but at the same time “outsourced hosting”.
Today, you often hear customers referring to have a “cloud strategy”. But what does this really mean? Do you only mean that you refrain from local hosting of your IT infrastructure or do you mean that you only subscribe to so-called “public cloud applications”?
There are a variety of consequences of switching from local hosting of purchased applications to subscribed cloud applications. And these consequences are a mixture of positive and negative, but it differs from customer to customer to what extent they are positive or negative. Some examples of consequences are: A. The need for local technical hosting competence decreases; B. The possibility of influencing when and how the software is upgraded decreases, C. The possibility of customer-unique customizations decreases, D. Reliability increases. These are just a few examples of many consequences.
Integrations have always been a problematic area. There is always a weak link in the overall infrastructure and the risk remains over time as applications are upgraded and replaced. And the problem largely remains even with cloud services. The extreme when applying a cloud service is that the customer has, for example, a cloud-based ERP system, a cloud-based HR system, a cloud-based WMS, a cloud-based CRM system, a cloud-based payroll system, and so on. And where all applications are so-called public cloud services. In practice, this means that data for each application is stored in completely different places and databases and where integrations are required between all applications. To be able to handle this in a smooth way, some form of integration platform may be required.
If we in the example above add the aspect that the customer in addition to this has some local applications to, for example, manage their manufacturing systems (MES), maintenance systems and time stamping for time reporting, the picture becomes a little more complex. The customer has a focus on “cloud” but still has an infrastructure that is a hybrid between the different models.
From time to time, customers who have an Azure strategy are also heard, but what does that mean? This probably means that you have chosen Azure as the platform and infrastructure for your applications, but it can still be purchased applications that you have chosen to put in Azure to manage your hosting. Is it then a cloud service?
An issue that often arises when the customer moves from a locally implemented system environment to a cloud-based architecture based on public cloud applications is how the system administration should be handled. Switching from upgrades every 3d year to getting new upgrades 4 times a year has a very big impact on the organization to prepare and receive these upgrades. Although it sounds easy to continuously receive ongoing upgrades, there is no standard model for how the customer should absorb the new functions introduced in the system or how the customer should secure their customized integrations.
The purpose of this blog is not to argue for or against cloud services. Instead, the purpose is to shed light on the issues around the cloud and that “cloud strategy” is about much more than just choosing the direction to strive for applications with external hosting. And today we unfortunately meet far too many customers who lack insight into “HOW” they should switch to cloud services, what conditions are required and what impact it will have on the organization.