Cloud Readiness: What CEOs Need To Know

The CEO hears it incessantly from his/her CIO in their weekly C-suite board meeting: “We need to get competitive and create a strategic architecture around our cloud computing technology.” Then, the landslide of questions begins: Public or private cloud adoption? A hybrid? Cloud migration? And what to do about effective integration? These and related questions are increasingly becoming a challenge for not just the IT executive, but the corporate chief is finding himself or herself intimately involved in making decisions about the company’s technology direction. According to a Forbes piece: “Close to two-thirds (62 percent) of 500 mid-market executives say their company’s C-suite leaders have ‘some’ level of involvement in the adoption of next generation technologies.” Yet, deciphering these complex subjects depends on the CEO being cloud-ready and understanding the key tenets of the technology, as well as its promise and pitfalls in key areas, including:

• Security
• Cost of Ownership
• Building / Architecting solutions
• Integrations

One fact is clear: cloud computing is here to stay. According to a CIO article, “93 percent of businesses are using cloud technology in some capacity.” The dollars tell a similar story as according to a Forbes article: “The worldwide cloud computing market grew 28 percent to $110B in revenues in 2015.” So CEO’s are already using and talking about the cloud, and here is what they are thinking.

Security

Proprietary information and data protection are the foremost priority for the executive. Cloud and security just a few years ago were thought to be inherently incompatible based on the newness of the innovation, its non-centralized infrastructure and multiple points of access according to a Forbes piece. Now, just a few short years later, advancements in: “policy-based firewalls, encrypted communication, multi-factor authentication, automatic backup and identity and access management controls” provide a high-level of confidence for the CEO to move more of the company’s information assets to the cloud.

Cost of Ownership

The CEO and CFO are concerned with the return on investment (ROI) on their cloud spending. According to a Forbes piece, a survey of businesses found “cloud computing improved profits by an average increase of 22 percent, and an average cost reduction of 23 percent.” And while those numbers are impressive, they should not all fall to the bottom line. Astute executives will leverage some of those profits and cost reductions to drive more innovation within the organization.

Building/Architecture Solutions

A common query for the CEO is whether to utilize a public or private cloud technology. According to the CIO piece, “88 percent of businesses are using public cloud technology, 63 percent are using private cloud and 82 percent have a hybrid cloud strategy.” According to a Wired article: “management visibility, control, security, privacy, and physical data proximity” are pros for a private cloud option, while scalability, “the speed of access to resources and the pay-per-use model” are public cloud benefits. The answer for each company will be different based on their needs and capacity however, the software-as-a-service (SaaS) model is one that is gaining considerable traction in IT departments across industries.

Integrations

Despite the wide adoption of cloud technologies, integration remains a challenge, according to the CIO piece. Depending on the criticality of the functions a firm is using the cloud to implement, integration complexity will vary. According to CIO: “59 percent of respondents used the cloud for storage; 48 percent used the cloud for business continuity and disaster recovery and 44 percent for security.” Resources for aligning and building a cohesive integration infrastructure is dictated by not only the number of end-users, and but also by the size and complexity of the organization’s footprint in terms of both geography and market presence.

Conclusion

More than ever before, the CEO must be engaged in the company’s IT cloud dialogue and to be effective, the CEO must become conversant in the costs, challenges and potential benefits of moving to some form of cloud-based technology infrastructure. While the nuts and bolts of provider, specifications and capabilities are the purview of the CIO; the strategic direction of how the business will utilize the cloud, its financial implications and the potential impact on innovation in the ecosystem are concerns that the chief executive must address in that dialog.