The new cloud priorities of 2020

Entering 2020, intent was clear: businesses planned to move to the cloud — or at least follow a neatly laid out roadmap. As businesses fended off unforeseen consequences, CIOs quickly pushed cloud to the forefront.

More than half of IT decision makers expected the pace of digital transformation to “increase significantly” in 2020, buoyed by a push to improve the customer experience, according to Flexera’s 2020 CIO Priorities Report, released March 11.

The survey of more than 300 CIOs and senior IT executives is a snapshot of technology plans before budgets were frozen and stay-at-home orders put in place. Two-thirds of IT budgets were dedicated to running the business; the last third was earmarked for growth and innovation.

Survey of more than 300 CIOs, IT executives. Data released March 11 Naomi Eide / CIO Dive; Data from Flexera 2020 CIO Priorities Report

CIOs planned for “heavy adoption” of the cloud and prioritized its security, according to Flexera.

The planned push proved sentient. While a cloud-based future was already part of the technology trajectory, cloud emerged as a key differentiator as the outlook for the year soured.

Moving to the cloud was motivated by larger modernization plans. The priority was to continue migrating to the cloud, a black-and-white approach untethered to business outcomes.

A hurdle to translating the cloud imperative in part stems from the view of IT. Only 24% of CIOs or IT decision makers were “equal partners” in the business strategy, according to Flexera. One-third were merely technology implementers.

The attitude toward the cloud was about shifting in “parts,” Randy Potter, chief architect at global consulting firm Capgemini, told CIO Dive. Businesses planned to take whatever modernization approach was required to go to the cloud.

Business decisions under COVID-19

Under the coronavirus lens, the biggest shift was in the reasoning around cloud technologies — previously-held skepticism gave way to efficiency and an improved time to market.

Companies before may have had an overall order to move to the cloud, but not a “clear vision” and directive for implementation, said Stephanie Radlick, management consultant at Pace Harmon, in an interview with CIO Dive. Now, getting leadership buy-in is easier because “value propositions that previously felt amorphous” are now translated in cost savings.

The technology became a business priority and organizations would need specific reasons not to migrate, Potter said.

Even if it’s just lift and shift, if an organization can get out of its data center or reduce its footprint in its colocation facility it could save money, change the toolchain and accelerate time to market, Potter said.

2021 and beyond

The pandemic and economic downturn may abate, but cloud migration fervor will remain.

It will be similar to the attitudes toward remote work. Forced to adapt, organizations are going to ascertain some of the benefits. Attitudes won’t shift back to those of December 2019, according to Potter. If a company makes a big push to the cloud, it’s going to continue to ripple downstream.

“2020 is setting the tone, 2021 is a continuation of that,” Radlick said. But thinking will likely undergo a broad shift.

How priorities shifted

The pandemic confirmed what many technology leaders already knew: the flexibility born from the cloud directly supports business transformation and adds to customer value. With results in hand, businesses will accelerate moving to the cloud.

Due to COVID-19, 57% of respondents planned to use the cloud slightly or significantly higher, according to Flexera. But the increased use requires efficiency.

Answers from 187 technical professionals. Report released April 28 Naomi Eide / CIO Dive; Data from Flexera 2020 State of the Cloud Report

The coronavirus “is going to have the effect of pulling” technology forward, John-David Lovelock, distinguished VP analyst at Gartner, told CIO Dive.

Cloud is a prime example. Gartner expects cloud spending projected for 2023 or 2024 to begin in 2022, Lovelock said. The technology proved itself; companies scaled up where necessary and those industries that needed to scale down to save money could.

“Cloud has much stronger proof points for value moving forward,” Lovelock said.

While cloud migration was on the business roadmap this year, focus was also on cost control.

While 53% of workloads are in the public cloud, businesses planned to increase the number to 60%, according to the Flexera 2020 State of the Cloud Report, based on a survey conducted in February and March of 750 cloud decision makers.

While 61% planned to move more workloads to the cloud, 73% prioritized optimizing their existing use of the cloud for cost savings, according to the report.

That cost control becomes even more important amid a broader dip in technology spending.

Fortune 500 companies are implementing frameworks to achieve cloud goals in a methodical way, Radlick said. Cloud was previously on the agenda, but it was not a top one or two priority.

But the pandemic has pushed cloud to the forefront, getting companies to take real steps.

The approach to cloud is much more “action-oriented” than previously, Radlick said. “It has become less theoretical.”

Trend to watch:

One theme Pace Harmon has seen with clients is requirement for portability between clouds, a trend emerging outside the scope of the coronavirus.

Whether it’s risk aversion, avoiding lock in or adopting best-of-breed approaches with cloud service providers, organizations are prioritizing flexibility, Radlick said. It goes beyond containerization, and highlights emerging tools that support a declarative infrastructure where companies can seamlessly switch between CSPs.

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