Summary:
If your organization isn’t migrating to the cloud, you’re missing out on increased scalability, flexibility and technological innovation.
It’s generally believed that the term “cloud computing” was inspired by the cloud symbol often used to represent the internet in flowcharts and diagrams. The term first appeared in the mid-1990s and has grown to include public, private and hybrid clouds like Google, Azure and AWS.
While cloud technology has been around for over two decades, some companies are still not all-in on migrating to the cloud. According to McKinsey, on average, large companies run only 15-20% of their applications in the cloud.
And while more than 80 of the enterprises McKinsey profiled aspire to run the majority of their applications in the public cloud within 5-7 years, they increased their cloud adoption by only 5-10% over 2023.
Despite recognizing the value of the cloud, organizations are still hesitant to fully migrate, primarily due to investment costs, security concerns and a culture resistant to change.
Why there is hesitancy to cloud adoption
In 2020, Capital One led the way and became the first U.S. bank to move its legacy on-premises data centers to the public cloud. The bank was also one of the only major Fortune 500 corporations to be fully cloud-enabled at the time.
While Capital One plowed ahead, many other financial institutions looked away and could not fathom making the move to the cloud. And years later, that hesitancy still exists.
Industries like financial services, utilities and healthcare are heavily regulated, so their hesitancy is somewhat understandable. They often see stakeholder pushback on cloud migration due to security, compliance and data loss concerns. A survey of banking leaders found that concerns about cybersecurity (83%) and compliance with regulations (70%) have significantly increased over the past year.
But the hesitancy isn’t limited to financial services. A Harvard Business Review report on cloud transformation across sectors found that organizations face a number of roadblocks as they strive for cloud adoption. Common challenges include a lack of talent to manage the cloud (45%), increased cybersecurity and data privacy concerns (44%), and difficulties integrating cloud services and data (34%).
The benefits of migration
So, what are companies tentative about cloud migration missing out on?
Scalability, flexibility and cost efficiencies are a few significant advantages. But for most, it’s the overall value of the cloud. According to McKinsey, the added value the cloud generates by enabling businesses to innovate is more than five times what is achievable by simply reducing IT costs.
For many companies, the cloud is a critical factor in their digital transformation. They realize that modernization is necessary to compete in today’s digital-first world. They must leave legacy and on-prem systems behind and shift to a new way of working that cultivates business resiliency and innovation.
However, sometimes it’s a matter of showing, not telling, when it comes to the benefits of the cloud. Those who have made the jump have found that cloud technology delivers measurable value in their organizations.
A PwC survey of U.S. business executives shows that the top advantages realized through cloud transformation are improved decision-making, increased productivity, increased agility and improved cybersecurity posture — all of which contribute to a business’s growth and success.
The future of cloud migration
The future of cloud migration is bright — and profitable.
According to McKinsey, the cloud can generate about $3 trillion in EBITDA (earnings before interest, taxes, depreciation and amortization) by 2030. Across sectors, the potential EBITDA uplift from the cloud averages 20-30% over the projected baseline. Specific projections vary significantly by industry, with high-tech, oil and gas, retail, healthcare systems and services, insurance and banking positioned to generate the most value by 2030.
However, some companies may only make it to 2030 if they start taking steps toward cloud migration now. To accelerate their journeys, businesses should consider partnering with a trusted managed services provider (MSP) to help them identify the right tools to ensure long-term cloud success.
A Forrester Consulting study commissioned by Windstream Enterprise found that digital leaders seek IT managed services providers that offer a wide range of expertise and capabilities, with more than half relying on an MSP for cloud services. These leaders realize that, to become future-fit, they must improve agility, security and customer experience — all attributes of a thriving, cloud-focused organization.
Explore what Windstream Enterprise IT Managed Services can do for you.
