The Evolution of Corporate Cloud Strategy

by Jason Burian on April 4, 2019

Don’t Get Left Behind

One of the best parts of my job is speaking with our customers and understanding their business, challenges, and strategies. I am overwhelmed by the change in cloud strategy in the last two years.

A few years ago, I was speaking with a mid-sized regional financial institution and asked the CIO about their cloud strategy.

“There is no chance we are putting our business-critical data or content in the cloud,” the CIO said.

Fast forward to a few months ago, and the answer from the same CIO to the same question is, “We will not bring in a new solution unless they are cloud-first. In addition, we are reevaluating all current solutions to see if the vendor has a future cloud strategy.”

That is a major shift in just two short years. And the software ecosystem supports this change. The entire future of companies like Microsoft, Salesforce, Box, and Zendesk are built on the bet of going to the cloud.

Why is this happening? Why now?

I think the first answer is confidence. The cloud is no longer new or cutting edge—it’s tried and true. Companies like Microsoft, with Office 365 and Azure, are all in. Amazon with AWS is the same. They have matured the services and pricing and have the evidence to back up its stability.

The choice for an organization to adopt the cloud is usually a progressive one.

Organizations start with the easy stuff: email, file shares, CRM systems. While all of these are important, they are, for the most part, self-contained systems: Very few business-critical systems integrate with a user’s Z drive. It was just a place for them to store collaborative and personal content for access. Having a user save a PowerPoint to OneDrive instead of a local file share is not a massive change to their day.

But changing the systems that allow an organization to pay its bills is a much different level of effort. Now that all the low-hanging fruit has been picked, our customers are turning the cloud lens towards the critical systems that run their businesses.

When I ask our customers why the move to the cloud is strategic and important for them, it typically comes down to three key points: cost, flexibility, and security.

Let’s dive into each one of these a bit deeper.

Cost

Running solutions on premises in a data center is expensive.

Don’t believe me? Check this out: Using Microsoft’s Cloud Calculator, we can see a solution running two virtual machines. One with a SQL Server can cost over 100,000 dollars a year. When you include the cost of hardware, software, operating systems licenses, SQL licenses, electric, data center, networking storage, and labor, it all adds up. Think of all the backups, outages, system upgrades, et cetera that seem to happen every single month. Organizations have way better things to do.

First and foremost, there are no installation costs. Traditional software projects could take anywhere from a week to several months just to get the solution installed. With the cloud though, the vendor just turns it on, and the implementation is ready to begin. On top of that, cloud subscriptions are typically recorded as operating expenses rather than large capital expenditures.

Plus, think of all the cool stuff you could do with the old data center room: indoor bocce ball court, beer garden, or a mid-day nap room (they are usually cold and dark places).

Flexibility

The ability to adjust to changes in a business quickly is paramount for IT leadership.

I was speaking with a current KnowledgeLake customer at Microsoft Ignite about this very topic. Her organization does a lot of growth via acquisition. Just the other day they added 30 new offices. Along with the new offices came new employees who needed access to the business systems. This required more hardware to handle the additional traffic, which resulted in dev, test, and production rollouts over several months.

She said, “With our cloud CRM platform, I just changed the number of available users, which adjusted the subscription fee automatically, and I was done.”

Then there is the topic of accessibility. These new branches were across the US, so close geographical location to the data center and bandwidth had to be considered. With the cloud, these types of concerns are handled by a vendor like KnowledgeLake. One of the very undervalued strengths of the cloud is prototyping or proofs of concept. As an organization, it’s important to ensure a solution would be the right fit before any major investment is made.

Name the last time you bought a car without a test drive. Sure, the salesman walked you around the car and showed you the engine and the sound system. But at the end of the day, you wanted to drive it to make sure it was right.

The cloud, and the ability to spin up solutions quickly, allows us to try new ideas with very little upfront investment. I’ve seen projects go from prototype, to user buy-in, to live, in weeks.

Security and Control

This is probably the biggest concern I used to hear from customers. Even today, security, data integrity, and privacy are paramount concerns. There have been several high-profile data breaches in the media recently in organizations like Home Depot and Apple.

What the media will fail to report is that most of these breaches were a result of human error (personal information via third party) and not someone “hacking the cloud.”

Ask yourself this: When was the last time your organization’s on-premises solution went through a security audit or third-party penetration testing?

Cloud service providers are responsible for quarterly audits to ensure they are protected. Each year, Microsoft invests about one billion dollars in cloud security. I would argue that this is more than most organizations could probably afford to invest in themselves.

Along with security comes the concept of control or access to your organization’s data. This one I totally get: It’s one that, frankly, many cloud providers have not perfected their approach on yet.

I spoke with a CEO of a small company (less than 100 employees) last month. He said, “If we make an investment with a cloud solution and it’s wrong, it can be very costly. They don’t just hand you all of your data back; you have to export it via code and potentially pay a data egress fee.”

With cloud providers, your data is in their data center, somewhere in the world, behind their gates. That’s why the KnowledgeLake Cloud approach resonated with this CEO.

Then we high-fived...

...not really, but I could tell that he wanted to.

What’s the Catch?

So, you’re probably asking yourself: Why exactly do software companies like KnowledgeLake want customers in their cloud?

You got us. Software companies absolutely love cloud software. Cloud services run in our environments, 100-percent under our control, on our gold-mastered images.

What does this mean?

This means there is significantly less hardware and software permutations that KnowledgeLake needs to consider for each update. No more, “Does it work on Windows Server 2008 R2 with a SQL 2012 and Windows File Replication Services turned on?”

That means increased quality and more resources to invest in adding new value. It also means that our customers get the new features automatically and don’t end up seven versions behind.

For a product person (aka me), this is nirvana.

Here is the little bonus secret. Come closer…closer…

Okay, not that close...

We get great insights into how the services is being used.

Please understand that we are not looking at your specific data, but at how many users are logged into a specific app for how long. Absolutely, we use some of this data to measure the usefulness of new features. But it's not that we are being creepy.

Data like this helps us make our software better.

But What About…

So you are now 100% convinced that your entire organization is ready to move to the cloud, right?

What? Not yet?

Okay, let’s address some of the common questions I hear from customers.

“This is a critical system, I cannot afford for it to go down.”

Very fair point. With the type of content that we help organizations with, outage means business is not getting done. While nothing is 100%, cloud services providers must make major investments in uptime. If they don’t stay up, they will be out of business. It’s like missing payroll for an organization.

Any outage has major consequences for a cloud company.

“I cannot move every system to the cloud at once, but these solutions require systems (some cloud and some on premises) to be integrated. How do we do that?”

This one is hard for sure and has a lot to do with security. I have yet to find a CTO that will open the inbound firewall so that a cloud application can connect to a database. That’s how you end up on the front page of the news.

All I can say is that, at KnowledgeLake, we understand this complication and have built a solution to address it. With our secure data gateway, we can connect to on-premises solutions (databases, apps, et cetera) without the security risk.

This way we can deliver fully integrated solutions to our customers while still leveraging the power of the cloud.

Look, the cloud is here.

Is it right for every organization and every system? I cannot say with 100% certainty that it's a yes. But organizations are embracing it because of the immense advantage, and they know that their competition is moving there.

The winners in business will be those who quickly understand their changing environment and adapt to it the fastest.

To quote my hero Dr. Emmett Brown:

“Roads? Where we’re going, we don’t need roads.”
Jason Burian Headshot 2

Jason Burian

VP of Product Management

As Vice President of Product Management, Jason loves investigating new and exciting technologies that help customers solve business problems. He puts this research into action by designing, building, and launching various software solutions for KnowledgeLake.

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