The cloud is benefiting IT, but not business
“The cloud has tremendous business value!” That’s the battle cry chanted by cloud providers and their allies at every cloud computing conference.
You will never hear me say that “the cloud” is always the right solution or, for that matter, the wrong solution. In my 20-plus years as a cloud expert, I’ve never blindly followed the lead of cloud computing pioneers or adopters. Like any other technology trend and category, cloud computing should be considered on a case-by-case basis.
This balanced approach may have cost me some friends and perhaps some jobs, but I believe this will remain the right way to think about cloud deployments in 2024.
ROI of cloud computing and AI
McKinsey underscores the necessity of incorporating generative AI into cloud adoption journeys. There is an anticipation that up to seven times the ROI for each migrated business domain still needs to be determined. This is in a landscape where only a fraction of companies report satisfactory returns from their cloud ventures.
It shouldn’t be a surprise that I lean toward the cautionary route. Despite technological advancements introduced by cloud deployments, 13% of companies surveyed said that returns from cloud investments need to be increased. It seems to me that cloud ROIs should be much higher, but I’m also aware that businesses are myopic about the actual value of their cloud deployments.
Even more troubling is that 55% of companies report satisfaction with their cloud investments. This highlights a gap between satisfaction and actual business value. In other words, the rush toward AI expansion is causing lousy technology configuration decisions because the perceived value of the cloud is overvalued.
This survey and others like it are a crucial wake-up call for businesses to reassess their cloud strategies. The promise of cloud computing must be critically examined—as it should have been from the beginning. However, I don’t see any fire-in-the-belly movements to get this under control right now. Instead I see people walking like lemmings toward more cloud deployments without a sound understanding of the business value that should be returned.
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