Scenario and Key Factors
In 2020, large enterprises accelerated the process of Cloud adoption due to the pandemic emergency, making it a true resilience lever.
However, the geopolitical situation, the energy crisis and rising inflation have generated potential impacts on this service over the past year, especially at the economic level.
2023 presents itself as the year of awareness for companies. Whether large or small, they have grasped the technological potential on the one hand but also experienced the risk of exponential growth in expenditure and consequently grasped the importance of initiating a change in organisation and cost management to better manage the cloud.
A new era
Cloud Transformation means the process of moving and adapting corporate IT resources to cloud-based solutions. This may include the adoption of storage, computing or application services managed entirely by cloud service providers. The promise is one of increased flexibility, scalability and, in some cases, reduced operating costs.
Companies that opt for Cloud Transformation often do so for several reasons:
Scalability: Cloud solutions offer the ability to quickly adapt to the changing needs of businesses.
Flexibility: With the cloud, businesses can access IT resources from anywhere, facilitating remote working and global collaboration.
Costs: The cloud’s ‘pay-as-you-go’ payment structure can offer economies of scale, but care is needed.
Cloud relevance and its growth
The Cloud has become a mainstay in the digitisation processes of enterprises:
half of all business applications (51%) reside in the cloud. Despite the unfavourable socio-economic context, the strategic vision on this technology has not been lost, and the market has continued to grow at a fast pace: +20%, for a total value of 4.62 billion at national level.
In this last year, the Cloud market continues to consolidate, with a growth rate of +19%. In continuity with previous years, it is the Public Cloud & Hybrid Cloud component, which recorded the most significant growth. (Source: Report Cloud Transformation 2023 – Politecnico di Milano Observatory).
The current situation and future vision
The risk of rising prices for Cloud services has led enterprises to look
back, triggering the so-called ‘Cloud Repatriation’ phenomenon by re-evaluating the effectiveness of the migration path already in place since 2020.
What is the most conscious strategy? Only through real organisational transformation is it possible to fully exploit the flexibility and agility benefits of the Cloud. If the adoption of the Cloud is not supported by new governance mechanisms, it will be difficult for companies to achieve the defined objectives; it is therefore necessary to redesign business processes by coordinating them with IT processes. If large enterprises have come to the realisation that they need to act on technology, organisational processes and skills to build resilient and innovative business models with the Cloud as an enabler, the next challenge will be to continue along this path, in some cases going back on the choices made and much more often moving towards a hybrid model.
Cloud Repatriation: a return to the origins
Cloud Repatriation implies the return of IT resources from the cloud to on-premises corporate data centres. This move may seem counterintuitive in an era dominated by the cloud, but there are good reasons why businesses might consider this option:
Performance: Some applications may run better in an on-premises environment, especially if they require specific hardware resources.
Security: Despite improvements in cloud security, some companies prefer to keep sensitive data inside their firewalls.
Hidden costs: While the cloud can offer initial savings, costs can accumulate over time, especially if resources are not managed properly.
The choice between Cloud Transformation and Cloud Repatriation is not easy and depends on a number of key factors: Nature of Applications: Some applications are designed specifically for the cloud and would benefit from a cloud-native environment. Others may have specific needs that are better met by an on-premises data centre.
Security Requirements: Companies handling highly sensitive data might opt for repatriation to ensure maximum security.
Cost Analysis: A detailed evaluation of long-term costs can reveal which option is most cost-effective for specific business needs.
Corporate Strategy: The direction in which a company intends to move can influence the decision. For example, a company aiming for global expansion could benefit from the flexibility of the cloud.
The decision between Cloud Transformation and Cloud Repatriation is not black and white. Companies must carefully assess their needs, resources and long-term goals. In some cases, a hybrid solution, combining elements of both cloud and on-premises, may offer the right balance of flexibility, security and cost.