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Business Effects of Cloud Migrations

Updated Oct 03, 2022 ·

The Change of Business Dynamics​

Migrating services to the cloud changes business strategy and affects many departments. The impact can be significant.

  • New Sales Approach

    • Adapt quickly to market changes.
    • Expand offerings with scalable and flexible cloud resources.
    • Free up time from managing services to focus on innovation.
    • Reach new customers and diversify the client base.

  • Advanced Analytics

    • Analyze large datasets at low cost.
    • Make agile decisions from insights on sales, products, and operations.
    • Understand patterns for better strategic planning.

  • Shift in Responsibility

    • Transfer infrastructure management to cloud providers.
    • Reduce on-premise tasks like installing or maintaining servers.
    • Build new vendor relationships, sometimes with dedicated account managers.

  • Process Overhaul

    • Update procedures for finance, support, development, and operations.
    • Document new processes to avoid confusion later.
    • Ensure workloads and responsibilities are clear post-migration.

  • Deployment and Operations Transformation

    • Use on-demand resources to reduce wait times.
    • Implement automation, serverless computing, and self-healing systems.
    • Test cloud environments that mimic production for fewer errors.

  • Access to Latest Software

    • Get the newest operating systems and tools.
    • Choose software versions during deployment for up-to-date features.
    • Allow development teams to innovate with new capabilities.

  • Employee Engagement

    • Communicate changes to reduce fear or resistance.
    • Offer training and feedback opportunities.
    • Keep staff involved to maintain morale and understanding.

  • Resource Recycling

    • Repurpose redundant hardware for upgrades.
    • Add resiliency via duplication or load balancing.
    • Optimize existing infrastructure for better efficiency.

Effects on Employees​

Cloud adoption changes roles, creates opportunities, and may make some roles redundant. Understanding these effects helps manage transitions.

  • Roles and Opportunities

    • Create new positions in cloud architecture, implementation, and support.
    • Some employees may resist or feel threatened.
    • Operational teams may split between on-premise and cloud support.
    • Some roles may become redundant as automation increases.

  • Retraining and Skill Transition

    • Existing skills may not directly transfer; retraining is essential.
    • Encourage certifications like AWS or Azure.
    • Provide guidance for evolving job roles.

  • Reassurance and Communication

    • Explain safety of roles and offer clear development paths.
    • Maintain open channels for questions and feedback.

  • Training for All Levels

    • Non-technical staff get basic cloud principles.
    • Technical staff receive vendor-specific and vendor-agnostic training.
    • Offer flexible online or in-person learning.

  • Mobility

    • Enable remote access for staff and customers.
    • Allow global flexibility with internet connectivity.

  • IT Contribution

    • Free IT teams to focus on business goals.
    • Use cloud automation to save time for innovation.
    • Improve services and develop new offerings.

Financial Impact​

Cloud migration affects cost models, budgeting, and speed to market, making financial planning a key part of strategy.

  • Capex to Opex

    • On-premise requires capital expenditure for hardware and maintenance.
    • Cloud shifts costs to operational spending as resources are used.

  • Cloud Billing

    • Track costs by department or division.
    • Pay based on actual usage to avoid wasted resources.
    • Internal reporting aids budgeting and financial management.

  • IT Budget Changes

    • Reduce hardware spending and related Capex.
    • Increase software and cloud service budgets.
    • Staffing costs shift from general IT to specialized cloud roles.

  • HR Costs

    • Adjust for role changes, severance, or recruitment.
    • Recruit cloud specialists until in-house skills develop.

  • Improved Efficiency

    • Streamline processes for better collaboration.
    • Increase productivity and morale through optimized workflows.

  • Rapid Go-to-Market

    • Launch products and services faster than on-premise.
    • Increase revenue opportunities with quicker deployments.

Cloud migration affects cost models, budgeting, and speed to market, making financial planning a key part of strategy.

Contractual Business Obligations​

Using third-party cloud providers impacts contracts, SLAs, and compliance. Being aware of obligations helps maintain service quality.

  • Service Level Agreements (SLAs)

    • Evaluate vendor reliability and service resilience.
    • Check specific SLAs per service, like uptime and error rates.

  • Negotiation and SLA Changes

    • Negotiate terms if possible to align with customer commitments.
    • Monitor SLA updates as providers may change terms.

  • High Availability Architecture

    • Design systems to be fault-tolerant across regions.
    • Balance costs against required continuity.

  • Compliance Controls

    • Cloud providers handle physical security and global regulations.
    • Users remain responsible for application-level compliance.
    • Use tools like AWS Config to monitor and report compliance.

Business Risks​

Cloud adoption carries risks that must be understood and mitigated for a successful migration.

  • Legislation and Regulation

    • Follow data protection and regional laws.
    • Design systems to meet compliance and security requirements.

  • Technical Skills

    • Reskill staff to handle new cloud technologies.
    • Lack of skills may affect productivity and security.

  • Third-Party Reliance

    • Dependence on vendors can limit control.
    • Use high availability and multi-cloud strategies to reduce risk.

  • Contract Limitations

    • Cloud terms may restrict customization of SLAs.
    • Negotiating specific terms can be challenging.

  • Strategy Misalignment

    • Post-migration, original cloud strategy may need adjustment.
    • Consider hybrid or alternative deployment options if results differ from expectations.

  • Technology Advances

    • Cloud providers frequently update services.
    • Adapt applications to leverage new features.

  • Shared Infrastructure

    • Multi-tenant environments carry potential security risks.
    • Dedicated instances may be required for sensitive workloads.

  • General Risks

    • Identify and mitigate risks continuously.
    • Expect a learning period to adjust systems and processes.

Resources​