What happened to agility and new business models? Cloud benefits have all gone to IT
(2024/04/08)
- Reference: 1712571306
- News link: https://www.theregister.co.uk/2024/04/08/cloud_mckinsey_survey/
- Source link:
The migration of IT workloads to the cloud is benefiting tech departments rather than the wider business, according to a McKinsey survey.
The interviews with around 50 European cloud leaders found that only one in three European companies monitors non-IT outcomes of cloud migration, such as cost savings outside IT (37 percent) or new revenue generation (32 percent).
The figures might concern those who have seen the move to the remote distributed architecture as a means to achieve nebulous concepts like business agility rather than IT savings.
[1]
"A stunning 95 percent of European companies in our recent survey say they're capturing value from cloud, and more than one in three say they intend to have more than half of their workloads on cloud," the report said. "But scratch below the surface, and the story is a little less rosy. The vast majority of the value companies have captured, for example, remains in isolated pockets and at subscale.
[2]
[3]
"The focus of their cloud efforts, for example, has been disproportionately on improvements to IT, which generate lower rates of value than improvements to business operations. A shift to higher-value cloud use cases in business operations would create significantly more value."
The report found that 71 percent of companies measure cloud impact in terms of IT operational improvements, while 66 percent measure in IT cost savings, and 63 percent measure the number of applications on the cloud.
[4]
It makes the argument that the cloud would help create fleet-footed business units seeking new markets and commercial models seem less of a reality for some.
[5]Lambda borrows half a billion bucks to grow its GPU cloud
[6]OpenStack pushes its first easy-to-upgrade release out the door
[7]AWS severs connection with several hundred staff
[8]French lawmakers take a swing at cloud monopolies
However, the global consultancy argues that businesses' success in adopting new technical trends will depend on them measuring cloud migrations in different ways.
"The ability to take advantage of new technologies, particularly generative AI, will depend on how well companies can establish and scale their cloud programs," the report said.
"It is not much of an exaggeration to say that Europe's growth ambitions will hinge on its success in the cloud. Companies that effectively integrate gen AI in their transformations may achieve up to seven times the ROI of their peers for each migrated business domain. Such potential makes incorporating gen AI into cloud adoption a 'must-explore' action for successful cloud journeys."
The view that "AI plus cloud equals growth" is not shared by everyone. Earlier this year, John-David Lovelock, distinguished VP analyst at Gartner, [9]told The Register : "In terms of productivity, that doesn't necessarily translate to GDP. If I make another email, another slide, improve quality, drop error rates ... none of that is GDP producing."
[10]
Both [11]Microsoft and [12]Dell said recently they are still at an early stage of trying to convince customers to pay for these new services.
Nonetheless, European companies polled by McKinsey claim they are already getting value from the cloud. While 13 percent say returns have been insufficient, 55 percent report satisfaction with their cloud investments. Nineteen out of 20 companies say they have improved operations – in terms of security and quality, for example – while 75 percent have saved money on IT or improved productivity within the tech department. ®
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[6] https://www.theregister.com/2024/04/04/openstack_caracal_released/
[7] https://www.theregister.com/2024/04/03/amazon_aws_layoffs/
[8] https://www.theregister.com/2024/04/02/cispe_welcomes_french_law/
[9] https://www.theregister.com/2024/01/17/ai_investment_gartner_tech_spending/
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[11] https://www.theregister.com/2024/03/18/microsoft_copilot_moneymaker/
[12] https://www.theregister.com/2024/04/05/ai_talent_wars_craziest_ever_seen/
[13] https://whitepapers.theregister.com/
The interviews with around 50 European cloud leaders found that only one in three European companies monitors non-IT outcomes of cloud migration, such as cost savings outside IT (37 percent) or new revenue generation (32 percent).
The figures might concern those who have seen the move to the remote distributed architecture as a means to achieve nebulous concepts like business agility rather than IT savings.
[1]
"A stunning 95 percent of European companies in our recent survey say they're capturing value from cloud, and more than one in three say they intend to have more than half of their workloads on cloud," the report said. "But scratch below the surface, and the story is a little less rosy. The vast majority of the value companies have captured, for example, remains in isolated pockets and at subscale.
[2]
[3]
"The focus of their cloud efforts, for example, has been disproportionately on improvements to IT, which generate lower rates of value than improvements to business operations. A shift to higher-value cloud use cases in business operations would create significantly more value."
The report found that 71 percent of companies measure cloud impact in terms of IT operational improvements, while 66 percent measure in IT cost savings, and 63 percent measure the number of applications on the cloud.
[4]
It makes the argument that the cloud would help create fleet-footed business units seeking new markets and commercial models seem less of a reality for some.
[5]Lambda borrows half a billion bucks to grow its GPU cloud
[6]OpenStack pushes its first easy-to-upgrade release out the door
[7]AWS severs connection with several hundred staff
[8]French lawmakers take a swing at cloud monopolies
However, the global consultancy argues that businesses' success in adopting new technical trends will depend on them measuring cloud migrations in different ways.
"The ability to take advantage of new technologies, particularly generative AI, will depend on how well companies can establish and scale their cloud programs," the report said.
"It is not much of an exaggeration to say that Europe's growth ambitions will hinge on its success in the cloud. Companies that effectively integrate gen AI in their transformations may achieve up to seven times the ROI of their peers for each migrated business domain. Such potential makes incorporating gen AI into cloud adoption a 'must-explore' action for successful cloud journeys."
The view that "AI plus cloud equals growth" is not shared by everyone. Earlier this year, John-David Lovelock, distinguished VP analyst at Gartner, [9]told The Register : "In terms of productivity, that doesn't necessarily translate to GDP. If I make another email, another slide, improve quality, drop error rates ... none of that is GDP producing."
[10]
Both [11]Microsoft and [12]Dell said recently they are still at an early stage of trying to convince customers to pay for these new services.
Nonetheless, European companies polled by McKinsey claim they are already getting value from the cloud. While 13 percent say returns have been insufficient, 55 percent report satisfaction with their cloud investments. Nineteen out of 20 companies say they have improved operations – in terms of security and quality, for example – while 75 percent have saved money on IT or improved productivity within the tech department. ®
Get our [13]Tech Resources
[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/paasiaas&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZhQUnK7PW82K8pazhEoerwAAAJU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[5] https://www.theregister.com/2024/04/05/lambda_500m_loan/
[6] https://www.theregister.com/2024/04/04/openstack_caracal_released/
[7] https://www.theregister.com/2024/04/03/amazon_aws_layoffs/
[8] https://www.theregister.com/2024/04/02/cispe_welcomes_french_law/
[9] https://www.theregister.com/2024/01/17/ai_investment_gartner_tech_spending/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/paasiaas&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZhQUnK7PW82K8pazhEoerwAAAJU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2024/03/18/microsoft_copilot_moneymaker/
[12] https://www.theregister.com/2024/04/05/ai_talent_wars_craziest_ever_seen/
[13] https://whitepapers.theregister.com/
Yankee Doodle Doofus
I agree. Azure/M365 stuff is a pain to admin. They change things so often that when you run into an issue or just can't find an option, searching for a solution online is almost pointless. Even Microsoft's own online documentation is usually out of date.
"The migration of IT workloads to the cloud is benefiting tech departments"
Mike 137
Maybe that shoud read " "The migration of IT workloads to the cloud is benefiting CTOs " -- job still safe, costs (apparently) reduced, less personal exposure when the sh*t hits the fan.
Re: "The migration of IT workloads to the cloud is benefiting tech departments"
Strong as Taishan Mountains
lmao reg seems to be written by an MBA these days
"The migration of IT workloads to the cloud is benefiting tech departments"
Err, what?
Hands up all those IT departments who prefer dealing with cloudy stuff!
With on-prem you have a reasonable level of control over what gets installed, what is patched and when it's patched. With cloudy stuff there is much less control (none in the case of most SaaS products), and a supplier fuck-up can at any point cause a deluge of user complaints, which you are unable to do anything about other than lean on the supplier.
And IaaS isn't more straightforward than on-prem infrastructure either - e.g. Azure is harder to configure than a Vsphere deployment. OK, you don't have to patch the firmware but that's not a major factor anyway and the local control makes it more than worth the time.