RESEARCH
PAPER
When is “cloud first”
a good strategy for
organisations?
A cloud first strategy often makes good sense
– but which cloud should you pick?
May 2016
Sponsored by
When is “cloud first” a good strategy for organisations?
Contents
Executive summary
p3
Introduction
p3
Current state of play
p4
Future intentions
p5
Cloud services advantages
p6
A cloud-first approach to IT service delivery
p7
When is “cloud-first” appropriate?
p8
Barriers to broader adoption
p9
Network speed and latency
p10
Service outage incidents
p11
Colocation
p11
Conclusions
p12
About the sponsor, Coreix
p12
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2 Computing | research paper | sponsored by Coreix
When is “cloud first” a good strategy for organisations?
Executive summary
Cloud computing is no longer considered an exotic cutting edge technology for the early adopters,
and is starting to be seen as just another part of the toolbox available for IT departments to use as
appropriate in order to meet the requirements of their organisation.
Much has been written by industry commentators regarding the potential benefits of cloud
computing for enterprise customers and other organisations, such as the ability to reduce
spending on IT infrastructure by provisioning some or all IT services on a pay-per-use basis,
with the ability to easily scale up or down the resources consumed in response to their
requirements.
These benefits have led some organisations, most notably the UK government, to put in place a
“cloud-first” policy. This dictates that all new IT projects and services should be built in or procured
from a cloud service provider, unless there are mitigating reasons as to why this approach cannot
be followed.
In response to this, we decided to examine where a “cloud-first” strategy may be appropriate.
As a starting point, we surveyed a number of IT decision makers to ascertain their attitudes to
cloud services and which IT functions they might be happy to offload to a cloud provider, and
whether some need to be retained in house.
Introduction
Cloud computing has become one of those catch-all industry terms that hides a great deal of
underlying complexity, such as the number of different deployment models and options, along
with the costs and risks associated with each one.
These deployment models range from using a public cloud provider to host services, to building
and operating an internal private cloud. In the latter case, the aim will be to deliver a similar level
of flexibility in deploying and scaling services as Amazon Web Services (AWS), but here the
customer gets to keep complete control over every aspect of it.
However, the image that comes to mind when people contemplate migrating things to the cloud
is typically the previous model, building applications and services on a public cloud like AWS.
This carries its own risks, as a public cloud is essentially a shared resource. The threat of a data
breach or data loss may make such a platform too great a risk for some services and some
industries such as finance.
There is also the issue of performance, with latency between the customer and the service
provider’s data centre a key concern for some applications.
A consensus seems to be growing that cloud services are better suited for some use cases than
others. Many organisations discover that some applications and services can be provisioned from
the cloud, while on-premise or hosted private cloud may prove the more appropriate choice for
others.
This whitepaper aims to address the question of when a “cloud first” approach is appropriate for
organisations, and when another option may be better suited.
Computing | research paper | sponsored by Coreix 3
When is “cloud first” a good strategy for organisations?
Current state of play
As cloud computing covers such a broad range of deployment options and usage models, we asked
organisations how they were already consuming cloud services as part of their overall IT strategy.
The answers are shown in Fig. 1, and reveal that cloud services are already in use to a large extent
within the majority of organisations.
Fig. 1 : Which cloud deployment model is your organisation currently
using, if any?
Software-as-a-Service (SaaS)
– using hosted applications like
SAP or Office 365
61%
Hybrid, using a mix of on-premise
and public cloud resources
41%
On-premise private cloud
29%
Infrastructure-as-a-Service (IaaS)
– using virtual servers from a
cloud provider
27%
Platform-as-a-Service (PaaS)
– building applications in a
public cloud like AWS
23%
Hosted private cloud
20%
None
14%
*Respondents could select multiple answers.
Perhaps unsurprisingly, the greatest uptake of cloud services is represented by Software-as-aService (SaaS), as this model is the easiest to consume, with users being given access to
applications such as email hosted by the cloud provider and typically delivered through a web
browser.
Approximately one third of respondents (29 percent) indicated that they are operating an
on-premise private infrastructure-as-a-service (IaaS) cloud within their own data centre in order
to deliver the applications and services required by their organisation’s business operations.
Meanwhile, as many as a fifth of organisations are making use of a hosted private cloud, which is
essentially the same as operating an on-premise cloud, but the physical infrastructure is deployed
into a service provider’s data centre and typically maintained by that service provider.
A further 27 percent of respondents are using virtual servers hosted by a cloud provider, which
implies these are running applications or services on a public cloud platform such as Microsoft’s
Azure.
4 Computing | research paper | sponsored by Coreix
When is “cloud first” a good strategy for organisations?
Almost as many (23 percent) are bypassing the need to manage infrastructure entirely, and are
developing or operating services using Platform-as-a-Service (PaaS) resources available from
cloud providers such as Amazon Web Services (AWS). In many cases, this route is taken with
customer-facing services, rather than those used internally to run the business itself.
It should be noted that these categories are not mutually exclusive, so many organisations are
likely to be using more than one at a time, such as email and enterprise resource planning (ERP)
delivered via SaaS, while maintaining an IaaS private cloud for more critical applications.
Only 14 percent of respondents said they are not using cloud services of any kind, while nearly half
(41 percent) said they were using a hybrid model, with services deployed both on-premise and in a
public cloud.
Future intentions
While the results in the previous section show that cloud computing is well established among
many organisations in the UK, we also desired to know how these users saw their priorities
changing in the future. It is always possible that a particular cloud deployment method is proving
more effective than others, or organisations are finding that cloud services are not matching up to
their expectations.
We therefore asked the same set of users how they expected their cloud provisioning to have
changed in 18 months, if at all.
As can be seen in Fig. 2, the results follow the same basic pattern as in the previous section.
Overall, uptake of cloud services is continuing along the same path, with a few notable differences,
such as that only 8 percent of respondents expect to be using no cloud services at all in 18 months’
time, down almost by half from the situation today.
Fig. 2 : Which cloud deployment model do you expect to be using in
18 months’ time?
Software-as-a-Service (SaaS) – using hosted applications like SAP
or Office 365
62%
Hybrid, using a mix of on-premises and public cloud resources
52%
Infrastructure-as-a-Service (IaaS) – using virtual servers from
a cloud provider
42%
Platform-as-a-Service (PaaS) – building applications in a
public cloud like AWS
35%
On-premise private cloud
25%
Hosted private cloud
21%
None8%
*Respondents could select multiple answers.
Computing | research paper | sponsored by Coreix 5
When is “cloud first” a good strategy for organisations?
The number of organisations expecting to be using cloud-based SaaS applications and services is
virtually unchanged. (62 percent versus 61 percent previously), as is the number of respondents
expecting to be using hosted private cloud services delivered from a service provider’s data centre
(21 percent versus 20 percent).
Meanwhile, the number of organisations that aim to run their own on-premise private cloud in the
future shows a small decline from 29 percent to 25 percent of respondents. This perhaps indicates
a desire to shift the burden of managing infrastructure to a service provider rather than their own
IT department.
To reinforce this point, there is a concomitant rise in the number of those indicating their plan to
use virtual servers from a public cloud provider (42 percent, up from 27 percent) and a hybrid
architecture (52 percent, up from 41 percent).
Overall, it appears there will be an increase in the consumption of cloud services delivered from
outside the organisation’s own data centre.
Cloud services advantages
With uptake of cloud services increasing, it is worth taking a step back to consider why. Large
organisations are fairly conservative and do not tend to switch away from a formula that works
unless the alternatives are compelling or the existing solution is no longer meeting their
requirements.
With this in mind, we asked organisations to tell us what they saw as the benefits of this method
of IT service delivery.
Fig. 3 : What do you see as the advantages of cloud services for a
company like yours?
Easier to scale resources as required
65%
Cost savings through not having to
purchase and manage infrastructure
58%
Greater flexibility
54%
Greater resilience against downtime
32%
Convenient backup and recovery
provisioning
32%
None
5%
Other
3%
*Respondents could select multiple answers.
6 Computing | research paper | sponsored by Coreix
When is “cloud first” a good strategy for organisations?
The responses in Fig. 3 reveal that for the majority (65 percent) of respondents, cloud-based
services offer the advantage of making it easier to scale resources to meet requirements when
compared with traditional IT provisioning. Almost as many (58 percent) indicated that the biggest
advantage is cost savings on not having to procure and maintain infrastructure themselves,
and 54 percent said that cloud services offer greater operational flexibility.
About a third of organisations (32 percent) agreed that cloud providers offer them greater
resilience against service downtime (i.e. higher availability) and the same number said that cloud
services offer a convenient target for backup and recovery.
A cloud-first approach to IT service
delivery
Industry commentators have been talking about adopting a cloud-first approach to IT service
delivery and procurement, for quite some time now. However, what is meant by adopting a
cloud-first approach? This may seem obvious in light of the UK government’s official policy for
public sector organisations to consider and fully evaluate potential cloud solutions before
considering other options.
However, as we have already discussed, cloud covers an array of deployment models and means
different things to different people. In the context of organisations that may already have an
installed base of legacy infrastructure, cloud-first may be interpreted in several ways; that users
should plan to move everything to the cloud; that any additional services should be provisioned
from the cloud; or that cloud should be preferred except where there are overarching
considerations such as security.
We put the question to organisations, to ascertain exactly what is commonly understood by
a “cloud-first” strategy among those responsible for IT services among organisations.
As can be seen from the responses in Fig. 4, nearly half of those questioned (45 percent)
understood “cloud-first” to mean that new services should be cloud-based, but that this may
mean using an on-premise private cloud or delivering them from a public cloud platform.
Fig. 4 : What do you understand by a “cloud-first” deployment strategy?
6%
5%
All new-build applications and services should
be deployed from a public cloud such as AWS or
Azure
13%
New services should be cloud-based, whether
this is on-premise, private cloud or public cloud
19%
12%
All services should be migrated to the cloud
when possible, such as the next refresh cycle
45%
All services should be deployed into the cloud
apart from critical services that need to be kept
on-premise
Only services that need to be public-facing or call
for massive scale should be deployed in the cloud
Other
Computing | research paper | sponsored by Coreix 7
When is “cloud first” a good strategy for organisations?
A further 19 percent believe that services should be deployed to the cloud, apart from critical
services that need to be kept on-premise. This is consistent with a hybrid cloud strategy that
is generally accepted as being the mainstream scenario for IT delivery in organisations going
forward.
Meanwhile, only 13 percent of respondents believe that “cloud-first” implies that all new
applications and services must be deployed to the public cloud, and just 12 percent believes that
services should be deployed to the cloud as soon as possible, such as the next refresh cycle.
In summary, these results show that IT decision makers in the majority of organisations interpret
cloud-first as meaning that future services and applications should be delivered using a cloud-like
model. However, this does not necessarily entail moving them off premise to a public cloud,
and most firms are prepared to take the time to evaluate the mix that works best for them.
However, moving to a cloud-like delivery model for applications and services will make it easier
to migrate workloads to a public cloud in the future, if this is deemed necessary.
When is “cloud-first” appropriate?
While a “cloud-first” approach can significantly reduce costs by eliminating the need for
organisations to procure and maintain the physical infrastructure required to deliver applications
and services, there can be disadvantages to moving them off-premise. A loss of control is one such
issue, as are concerns over the security of the data that is being handled by these applications and
services.
With this in mind, we asked organisations which applications and services they would consider
taking a “cloud-first” approach to IT provisioning, in order to gauge which services organisations
are comfortable with potentially moving off-premises to a service provider.
The results shown in Fig. 5 (see page 9) will not come as much of a surprise to anyone who has
been following the IT market for the past several years. 72 percent of respondents would consider
email and collaboration tools ideal for a cloud-first approach, and in fact many organisations have
already done so through the adoption of services such as Microsoft’s Office 365 or Google Apps for
Work.
Likewise, backup and recovery is widely regarded as an ideal service for cloud delivery, as storing
backup data off-site is almost an essential requirement in case some incident should lead to loss
of data or infrastructure at the organisation’s main site.
Another application seen as well suited for a cloud-first approach is big data analytics and
business intelligence. This is possibly because many popular business intelligence (BI) tools are
already in the cloud, such as Microsoft‘s PowerBI, but also because many data sources are
increasingly in the cloud, and it makes sense to process this data where it lives.
However, fewer respondents (41 percent) would consider a cloud-first approach for business critical
applications such as customer resource management (CRM) and enterprise resource planning
(ERP), despite the fact that many of the most popular solutions in these categories are already
SaaS, such as Salesforce and NetSuite.
8 Computing | research paper | sponsored by Coreix
When is “cloud first” a good strategy for organisations?
Fig. 5 : Would you consider a “cloud-first” approach for the following
applications or services?
Email / collaboration
72%
Archiving
64%
Backup and recovery
61%
Big data and analytics / business
intelligence
51%
Business critical applications such
as CRM, ERP
41%
Databases
35%
None of these
9%
Other
2%
*Respondents could select multiple answers.
Perhaps the biggest surprise is that 35 percent of respondents would consider a cloud-first
approach for databases. Hosting a database in the cloud would typically only makes sense if it was
to be used to serve other applications and services running in the cloud, although making use of a
cloud-hosted Database-as-a-service (DBaaS) such as Amazon RDS ensures customers will be free
from issues such as maintenance or scaling.
Barriers to broader adoption
Cloud services hold out the promise of a more flexible approach to IT that will allow customers to
treat it as a utility like the electricity supply, available on-demand for organisations to consume as
many resources as they wish to pay for and only as and when they need them.
However, there are downsides to cloud services, such as potential loss of control over data and a
greater reliance on communications infrastructure to provide access to services when required.
In order to ascertain whether some of these barriers to cloud adoption were viewed as a greater
impediment than others, we asked organisations to choose what they saw as holding them back
from broader uptake of cloud services.
Computing | research paper | sponsored by Coreix 9
When is “cloud first” a good strategy for organisations?
The results in Fig. 6 show that data sovereignty and compliance remain the top concern over cloud
services, reported by 63 percent of organisations), closely followed by security worries (60 percent).
The latter is only natural considering the number of data breaches from online services that have
hit the news in recent times.
Fig. 6 : What do you see as the barriers to broader adoption of cloud
services for a company like yours?
Data sovereignty / compliance
63%
Security worries
60%
Network speed or latency concerns
51%
Availability or service outage
concerns
41%
Network / bandwidth costs
41%
Loss of control or oversight
38%
None
6%
Other
15%
*Respondents could select multiple answers.
Network speed and latency
Other issues that may have a negative impact on cloud services include network speed and latency
issues (51 percent of respondents), which could impact on application performance if the provider
hosting the service is located a great distance from the customer, for example.
10 Computing | research paper | sponsored by Coreix
When is “cloud first” a good strategy for organisations?
Service outage incidents
Meanwhile, two-fifths of respondents (41 percent) flag up service outage incidents as a worry,
while the same number is concerned about the costs associated with any increase in network
bandwidth that may be required to facilitate communications between cloud-based services and
the organisation’s on-premise infrastructure.
Interestingly, 38 percent expressed concern about loss of control or oversight regarding
applications and services due to these being switched from the organisation’s own infrastructure
to operating from that of an external cloud provider.
Colocation
Although cloud services can in theory be delivered from anywhere, concerns over issues such as
data sovereignty and network performance may mean that customers might be best advised to
work with a cloud provider that is able to service their requirements from a data centre located
within the same region as their organisation.
With this in mind, we asked organisations whether they would consider a strategy of colocation
in a service provider’s data centre in the context of a cloud-first approach to IT services.
The results shown in Fig. 7 demonstrate that at least a quarter of UK organisations see that
colocation offers the advantage of knowing the precise physical location where their data is stored,
while another 16 percent believe this would help them to choose a data centre close enough to
their own premises to deliver an acceptable level latency for critical applications.
Fig. 7 : Do you see any advantages of using colocation for a “cloud first”
strategy in a company like yours?
Yes, it gives us the assurance of knowing exactly where our data is stored
26%
Yes, we can pick a data centre close enough for low latency in critical
applications16%
Yes, it lets us operate a hosted private cloud on dedicated infrastructure
15%
No, there is no real advantage compared to using a public cloud service
16%
Not sure
15%
N/A - we don’t have a cloud first strategy
12%
A similar number of respondents indicated that colocation would be advantageous because it would
allow them to operate a hosted private cloud on dedicated infrastructure. This approach combines
the benefits of having a private cloud running on dedicated infrastructure, but removes the need for
the organisation to house and maintain the infrastructure itself in its own data centre.
Just 16 percent of organisations stated that there was no real advantage in colocation compared
with using a public cloud platform such as AWS. At least a quarter of respondents (27 percent)
indicated they were either uncertain of the benefits or were not pursuing a cloud first strategy.
Computing | research paper | sponsored by Coreix 11
When is “cloud first” a good strategy for organisations?
Conclusions
As the cloud market matures, it is clear that organisations are picking and choosing multiple cloud
services and deployment models to fulfil their IT service requirements. This pertains to email and
collaboration tools delivered via SaaS, to building up on-premise private cloud for business
applications, to using virtual machines and other resources allocated on demand from a public
cloud provider.
But while the UK government may have predicated a “cloud-first” strategy for the public sector,
not all organisations are convinced that all of their applications and services should be migrated
off-premises, although many have seen the benefits of employing cloud-like deployment method,
whether that is internal to the corporate data centre or from an external provider.
Predictably, services such as email and archiving are identified as those most suitable for
“cloud-first” treatment, while many organisations believe that applications and services that
are more critical for the operation of the business are best kept internal for the time being,
or hosted in dedicated infrastructure if moved off-premises.
Meanwhile, customers are still expressing many of the same reservations about wider adoption of
cloud services, such as where their data is stored, compliance with regulations, availability of
services and whether performance will suffer due to latency or bandwidth issues.
These concerns are likely to be addressed as cloud providers become more in tune and more adept
at meeting customer requirements, but for now organisations can minimise many of the risks by
choosing a cloud provider with a local presence in their region. This addresses the “where is my
data?” conundrum, and should also facilitate ultra-fast low latency connections to the service
provider’s data centre.
About the sponsor, Coreix
Coreix specialises in providing high availability hosting services and solutions for small, medium
and large enterprise businesses. Coreix was formed in 2003 to answer the need for a customerdriven managed hosting provider with unparalleled expertise, cutting-edge technology and award
winning industry-leading customer service.
For more information:
Visit:
www.coreix.net
12 Computing | research paper | sponsored by Coreix