Kiwi organisations are embracing cloud technologies, but achieving cloud transformation promises isn't easy. So what's hampering adoption?

Earlier this year CCL conducted independent research of local organisations to capture a snapshot of cloud technologies in play and how that might change in the future. You can uncover all the insights in our 2023 State of New Zealand Cloud Transformation report.

The survey made it clear that cloud is critical to business success – most organisations (88%) rate cloud as extremely or moderately important to their future strategies. Various cloud models are in play, with private cloud operating in nearly half (40%) of organisations surveyed. Public cloud (28%), hybrid cloud (22%), and multi-cloud (15%) have also made significant inroads.

Other findings and comments confirm that organisations grasp the myriad benefits of modernising their systems in the cloud – and that more than a few have substantially improved their business and made huge gains as a result.

Bold aspirations, tentative steps

While most organisations are in the cloud and plan an even bigger future there, many are yet to find their feed, evident in the 40+% of organisations in the early stage of cloud adoption. Moreover, less than one in five respondents (18%) view themselves as a ‘leader’ – defined as using the cloud and confident they will realise business benefits.

So, while there are moves afoot to leverage cloud technologies, decision-makers are stepping carefully. They are most worried about insufficient skills and resources, managing cloud expenditure, and complex migration.

The graph below shows the full list of barriers to adoption:

What challenges are you facing with adopting or managing cloud?

My take on the top-three barriers

The war for talent

Attracting and retaining talent is an ongoing battle for everyone in business. Despite the current economic unease and many organisations downsizing their hiring plans, talent is still hard to find. Training within is one approach to closing the talent gap. However, upskilling becomes a mammoth task when you consider the sheer size of the cloud landscape – the average organisation simply cannot cover all the technical bases they need to.

The report also shows that 58% of organisations are expecting their managed service or IT provider to lead cloud adoption. That’s a sound plan, for obvious reasons – specialist cloud partners offer broad and deep knowledge, choices between hyperscalers, and years of experience implementing cloud solutions across a range of industries. It’s the quickest way to access the right skills and capabilities to bridge the skills gap and achieve the best possible outcomes.

Managing cloud expenditure

IT leaders generally worry that growing their cloud footprint sows the seeds for uncrontrolled (or at least harder to control) costs. As more of their people dabble in cloud services, they’re no longer under the glare of traditional cost controls that attach to capital expense items.

In the meantime, businesses are under pressure to bring a sharper focus to cost management. They worry that allocated cloud services won’t be used, resulting in wasted investment. And as many organisations haven’t yet fully retired their on-premises IT, remaining threads of legacy thinking can artificially inflate cloud spending, such as retaining extra capacity for growth and unplanned events.

Many IT leaders are looking to adopt a range of measures to configure, monitor, and finetune cloud resources across their cloud environment. The development is driving interest in FinOps – practices combining financial and operational approaches to align cloud costs with business outcomes.

Complex migration

For years now, our industry has focused on cloud migration – the entry point to the realm of digital transformation. This is a base one of sorts, but the real value going forward is in application modernisation, where processes and technical resources can be recalibrated more appropriately for cloud deployments, paving the way to the promised land of efficiency, productivity, and agility.

We know that the cloud landscape is crowded and inherently complex. Little wonder so many IT leaders obsess about risks. On the one hand they see the incredible potential of so many levers to pull to do new things, but on the other they realise that it can be difficult to choose the right mix of cloud architecture, security, networking, storage and so forth. They wonder how they can possibly manage their cloud environments to find the right balance between performance, accessibility, and costs.

It’s a hard road finding the perfect cloud model. What was once a race to the cloud is now a race to manage its complexity.

Download a copy of our 2023 State of New Zealand Cloud Transformation report. Or get in touch to learn more about how we can help address your barriers to cloud adoption.

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