January 5, 2018

Why Cloud? The reason changed in 2017…twice

In 2017, the predominant reason companies considered moving to the Cloud changed multiple times. While the “how” tends to shift frequently, seeing the “why” fundamentally shift twice in one year was fascinating (though not quite as fascinating as yesterday when LinkedIn suggested I might know both Jessica Alba and Ashton Kutcher).

The Cloud will save us money

2017 started off with companies moving to the Cloud to save money. This makes sense in a theoretical sense: you pay-as-you-go for your software instead of all up-front, you don’t have to buy your own servers, there’s no need to do installations, and there’s no IT staff needed to handle the frequent maintenance that an on-premises solution requires.

But while that’s 100% correct in the abstract (any new company would buy Cloud first before ever considering an on-prem product), there’s a sunk cost issue with existing solutions: companies already paid for all their software (minus the annual “support maintenance”), they already bought their servers, someone already installed the software, and there’s an existing staff dedicated to maintaining servers that has plenty of other things they can be doing once they stop dealing with the drudgery of daily maintenance activities. While there’s money to be saved with new solutions, and there’s definitely money to be saved in the long-run on converting existing implementations to the Cloud, the short-term savings are trumped by the sunk cost fallacy.

As companies started moving en masse to the Cloud, a compelling new motivation began appearing in Spring of 2017.

Let’s make our server someone else’s problem

Companies began realizing that servers and data centers are a huge headache: a distraction from their core competencies. Trying to make sure servers stay up and running whenever we need to access them shouldn’t be any more of a focus than starting our car: the engine should always work and if it doesn’t, someone far more qualified than we are should fix it.

All of a sudden, people were going to the Cloud so they never had to deal with their servers again: uptime was assumed, patches were someone else’s problem, and backups just happened. And as this happened, the Cloud became more like Google: when was the last time you pondered where Google’s servers are located or when the last time was that Google did a backup? And the reason you don’t invest brain power into Google maintenance thought experiments is that it’s Google’s problem. While the Cloud may be causing someone else sleepless nights keeping those servers up and running, that someone is not making their problem your problem.

So, we spent the next several months of “The Year of the Cloud” (trademark pending) going to the Cloud so we never had to deal with our servers again.

Power to the People!

In late 2017, organizations going to the Cloud began to notice something weird: business people were starting to own their own systems and access their data directly. A noble aim long desired by users everywhere, this has heretofore been impossible because on-premises systems take a lot of effort to administrate. It took consultants or IT personnel to build the systems, modify them, and in the end, those same people controlled access to the systems.

The Cloud changed all that: with a new focus on end users and self-service, the power to change things (add an account, build a new report, modify a form, create new analysis) moved to the people who are the first to know when a change needs to be met. At first, I thought this self-service paradigm would increase the workload on the business, but it turns out that they were having to do all the requesting of the changes anyway and quickly making those changes themselves was far faster. Why should I have to make a request to see my own data rather than just go wander through it on my own (preferably on a mobile device)?

And so we ended 2017 with a new drive – a new “why” – of the Cloud. Give the power to the people. The other reasons aren’t lost: they just took a backseat to the new user-first world of the Cloud. Now when someone asks me “why should our company move to the Cloud?”, I tell them “because it gives your business people the power to make better business decisions faster.”

At least, that’s my answer at the start of 2018.

What’s the next shift?

Each year, I conduct a global survey of Business Analytics. Last year, I asked over 250 companies how they were doing in the world of reporting, analysis, planning, and consolidation.  If you want to see where the next shift is coming from before it happens, I’m unveiling the results of this year’s survey on a webcast January 31, 2018, at 2PM Eastern, where you’ll learn how your BI & EPM (Business Intelligence & Enterprise Performance Management) stacks up against the rest of the world. To register, go to:

If you have any questions, ask them in the comments or tweet them to me @ERoske.

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