Decoding Enterprise Cloud Strategy for 2023

As businesses march towards achieving digital transformation success, there are specific technology levers that are considered integral for the journey. Invariably, cloud computing has secured one of the top ranks in the ladder as a technology enabling businesses to accelerate transformation impact.

This sentiment has been echoed across industries as captured in Vision 2023: Digital Acceleration Insights for Asia Pacific from 545 CIOs and technology decision makers. The report illustrates that 74% businesses believe cloud computing is the top digital enabler for 2023. Based on the insights from these digital leaders and decision makers, we have identified below 5 key trends that will determine the enterprise cloud strategy for India Inc. for 2023. The objective is to help businesses create an outcome oriented strategy that can yield high powered results.

Leverage cost optimization to drive buy-in

To create a strong enterprise cloud strategy, advocates of cloud adoption need to start with creating a buy-in or a rationale for the investment of resources, efforts, etc. to follow. While there are several benefits that are showcased for buy-in, cost optimization can be quite a big driver. Our research shows that 64% businesses believe that cloud adoption is being accompanied by high levels of cost optimization making it the top benefit for businesses. Here’s a quick glimpse of how cloud computing can facilitate cost optimization:

  • Reduced infrastructure cost with reduction in hardware costs and the need to maintain large number of devices
  • Easy scalability as businesses can scale up and down based on market needs without long terms investments and commitments
  • Minimized maintenance cost as all maintenance and upgrade costs are handled by cloud providers/ vendors

Therefore, start framing cloud strategy by creating a robust rationale detailing the business impact from a cost optimization lens resulting in profitability.

Focus on cloud security and resilience

Once stakeholders are aligned and are on the fast track to cloud execution, a core part of the strategy and focus needs to be on cloud security and resilience. Interestingly, our research shows that while on the one hand, 54% businesses believe that increased security is a major benefit accompanying cloud adoption, 66% see cybersecurity risks as the major concern that they seek to address with increased cloud computing.

Factors like data encryption, centralized security management, regular security updates, disaster recovery,, multi factor authentication, all contribute to acknowledging cloud computing as a security enabler. However, insider threats, malware, DDoS attacks and data breaches are significant security threats that cloud computing brings along. In fact, research shows that 45% of breaches are cloud-based. Furthermore, 80% of companies have experienced at least one cloud security incident in 2022.

Therefore, a major focus of the enterprise cloud strategy should be on securing cloud and facilitating resilience and business continuity. A key activity is to foster greater investments towards cloud security. Interestingly, the cloud security market is projected to grow from USD 33.13 billion in 2022 to USD 106.02 billion by 2029. This clearly illustrates how budgets towards cloud security should be a central part of cloud strategy. Investing in a cloud security team is a major imperative because currently, 80% of organizations do not have a dedicated cloud security team or lead.

Plan cloud investments across private, public and hybrid

A key element of cloud strategy is to decide which cloud is best suited for the organization. Broadly speaking, one can choose between a private (available only to respective business), public (shared by other organizations) and hybrid (combination of both) cloud, basis requirements. Our study shows that currently, investments are highest for public cloud where around 45% businesses have claimed that the public cloud currently has over 10% of their total IT budget, followed by hybrid and then private cloud.

From a future lens, there is almost a unanimous verdict where about 73% businesses believe that there will be an increase in budget allocations towards all the three cloud types. Invariably, the ultimate choice lies with the organization.

Choose a private cloud if a high level of control over data and security is a key concern. With the private cloud come the benefits of automation and flexibility.

Choose a public cloud if an inexpensive and a pay-as-you-go model is suited more, where maintenance and upgrade costs as well as efforts are managed by the cloud providers. This model supports scalability promoting agility.

Choose a hybrid cloud if one wants to achieve a balance of data control as well as cost savings. A hybrid cloud can effectively take care of short term demand hikes without massive investments.

Make cloud spending strategic, without overshooting budgets

While it is imperative to make investments in cloud computing, it is equally important to be prudent about where budgets are allocated. Without a clear vision, enterprise cloud strategy will stretch too thin, resulting in allocations which yield no results. In fact, for about 66% of businesses, exceeding cloud budgets is a major impediment in the seamless execution of their cloud strategy. Therefore, one needs to in-build preemptive actions within the strategy to ensure not exceeding the budget.

Exceeding cloud budgets is not a one off challenge. External sources illustrate that more than one-third of businesses have cloud budget overruns of up to 40%, and one in 12 companies exceed this number. To ensure that not overshooting the cloud budgets, make the following practices a part of enterprise cloud strategy:

  • Monitor cloud usage to identify services that one may be paying for, but aren’t using
  • Evaluate different cloud services and providers to identify the one which has the most cost effective offer basis needs, instead of simply choosing an off the shelf offer
  • Don’t move all services to the cloud at once, review the workload that needs to be actually be moved to the cloud
  • Trace hidden costs

Invariably, this can help to ensure that cloud budget is not exceeded and cloud strategy is well-aligned with the intended results.

Manage data privacy risks

Finally, one needs to focus on data privacy risks on the cloud as a part of the cloud strategy. Research shows that 60% of the world’s corporate data is stored in the cloud. Invariably, the cybersecurity risks associated with cloud computing make this data vulnerable to threats of attack, unauthorized access, misuse and much more. Any risks or vulnerability has the potential to cause major financial and reputational damage for a business.

Invariably, our research shows that for 62% businesses, data privacy, loss or theft is the top most threat or concern they are facing. Furthermore, deletion, elimination of access, etc. are also factors of concern. While managing data privacy risks for the cloud, businesses must focus on minimizing or eliminating human error. A study shows that 82% of all data breaches involve the human element, such as human error, credential theft, or social engineering, such as phishing.

To manage data privacy risks, one should:

  • Facilitate data encryption and access control with multi factor authentication, role based access and identity and access management
  • Classify data based on sensitivity and assign controls accordingly
  • Ensure regular backup and recovery of data along with time bound data retention policies
  • Ensure regulatory compliances like GDPR, HIPAA, etc. and focus on regular audits to identify and address vulnerabilities

Way forward

Overall, the sentiment across industry illustrates an increase in cloud adoption with increased investments and strategic efforts. As a business accelerating transformation success, it is extremely important that a robust enterprise cloud strategy is crafted which takes into account the above mentioned points and augment it with the right team and resources for seamless execution. Focus on achieving the perfect balance of people, processes and technology to unlock cloud success for business in 2023.

It is interesting to note that multiple innovations within cloud are coming to the forefront, including the rise of serverless computing, FaaS, fog computing, among others. Increasingly many enterprises are already evaluating the business case for adoption of these and these tech innovations are likely to see a steady growth in the years to come.

Stay tuned to CXO Digital Pulse to learn about more cloud innovations in our subsequent publications.

Prateek Tokas
Prateek Tokas

Disclaimer: The views expressed in this feature article are of the author. This is not meant to be an advisory to purchase or invest in products, services or solutions of a particular type or, those promoted and sold by a particular company, their legal subsidiary in India or their channel partners. No warranty or any other liability is either expressed or implied.
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