UK enterprises have reached cloud tipping point, but people are greatest barrier to success

Skytap has published the results of a commissioned study on the state of enterprise IT modernisation and the conflict between cloud strategies and datacentre realities. Conducted by 451 Research, the “Realities of enterprise modernisation: Urgency mounts for a clear path to cloud” surveyed 450 C-level and Director-level technology leaders in the UK, US and Canada.

 

The report finds that although enterprises have a clear appetite to move to the cloud, businesses are creating additional technical complexity and recruitment challenges in the process. Businesses know they need to modernise if they are going to remain competitive and UK IT leaders recognise the critical role of the cloud in doing this. However, a lack of skills, combined with internal resistance to change, is holding UK organisations back.

 

Key findings include:

·         The enterprise runs in the datacentre:

o    The majority of technology leaders report managing more than 100 applications, with 74 percent stating at least half of these applications are on-premises.

o    Another 71 percent of respondents see more than half their on-premises applications as mission-critical to their business.

·         Cloud use for application modernisation is reaching a tipping point:

o    67 percent of respondents plan to migrate or modernise at least half their on-premises applications in the next 12-24 months. As a result of this process, nearly two-thirds of respondents expect better customer responsiveness and to be more competitive.

o    However, at least half of the respondents cite common, core business applications including CRM, ERP, and Data Analytics as least-suited for hyper-scale clouds, and report lack of skills to manage these applications and an inability to deliver new features as current challenges in their operations.

·         But enterprises are choosing the path of most resistance, unintentionally creating a self-induced cloud skills gap:

o    The two top-ranked strategies that respondents report taking when they migrate traditional applications to the cloud are the strategies that require the highest degree of IT skills -- 49 percent cited refactoring or rewriting applications as their primary modernisation strategy.

o    Embarking on the most arduous path to cloud may be one reason why 55 percent of respondents cited “people capable of migrating existing applications to the cloud” as their most critical recruiting need.

o    In the UK, IT leaders are struggling to galvanise enthusiasm for driving change:

§  54 percent cited “internal resistance to change” as a top three factor holding them back from modernisation

§  82 percent said they felt some apprehension embracing a cloud-first strategy and learning new skills

 

Skytap and 451’s new study found that the reality of enterprise IT modernisation is a myriad of difficult choices exacerbated by urgent skills needs and the significant challenges created by traditional but mission-critical applications left in the datacentre. The research found technology leaders varied widely in cloud and application deployment models and that while the majority want to migrate most of their existing applications to the cloud in two years or less, they are in desperate need of the skills to do so.

 

“Enterprises are motivated to leverage cloud to modernise, and clearly understand the benefits,” said Jay Lyman, Senior Analyst, 451 Research. “However, the sheer mass and complexity of on-premises application portfolios, combined with a propensity to choose the most arduous path to cloud, is creating a painful skills challenge that may require a more patient, progressive approach to find relief.”

 

These new findings underscore the reality that enterprises need a clearer, more iterative path toward modernisation, and examines the cloud technology, people, and process challenges to digital business success.

 

“Cloud is an often over-hyped and simplified, while modernisation and digital transformation can be even more vague,” said Brad Schick, CTO, Skytap. “Our study cuts through to clarify the fact that technological change is hard and is being further aggravated by cookie-cutter approaches to cloud adoption. We want to be part of a conversation that gives enterprises clear choices to manage change and progressively modernise without burning everything to the ground.”

 

The study found respondents in the UK, compared with the US and Canada, were experiencing even more acute pain in their modernisation initiatives. More than two-thirds of UK respondents intend to migrate existing applications to the cloud in the next 12-24 months, with business and digital transformation being primary motivators for their change. However, more than half cite “internal resistance to change” as a top three factor holding them back from modernisation, and more than 80 percent noted IT teams would be “somewhat apprehensive” about a cloud-first strategy.

 

Further complicating the situation, UK technology leaders currently view technological change as having a negative impact through new skills shortages and cost challenges, and more than half are managing 300 or more applications, most of which are both on-premises and mission-critical.

 

The study’s findings underscore the fact that, like their US counterparts, UK technology leaders need a better path to modernisation that begins where they are today, then progresses forward to more modern infrastructure, processes, and organisational structure at a pace their business can handle.

 

“Our survey shows UK organisations are simply not realising the benefits of digital transformation and risk falling behind,” said Chris Griggs, VP and EMEA GM. “Rather than finding new revenue streams or helping them connect with customers in new ways, technology change is giving UK IT leaders a cost and skills headache. UK enterprises need a more holistic modernisation strategy or face even greater risks from rapid technological change.”