The Importance of Public Cloud for Businesses

December 03, 2021 by Stefanini

It’s well established that the transition toward public cloud is an important enabler for businesses seeking greater agility and flexibility.

Despite this, embracing cloud also introduces potential security risks, while creating new levels of complexity and fragmentation, particularly when a large number of systems need to be integrated.

Although these are significant challenges, a new Gartner study has revealed that businesses have invested more in public cloud, with more than half of organizations (53%) increasing spend by between 5% to 20% in the past 12 months.

All of this suggests that the benefits of the transition to public cloud outweigh the challenges.

This fact is further underlined by the Gartner study, which reveals that businesses recognize public cloud as a way to deliver value and increase agility/flexibility. Additionally, the Gartner study shows public cloud plays a key role in reducing or eliminating the need to maintain and support hardware.

Interestingly, these benefits are ranked above containing costs. This is also demonstrated by the study revealing that over three years, for most businesses (54%) public cloud has resulted in an increased IT spend, compared with 29% of businesses reporting that public cloud had resulted in a decreased IT spend.

The fact that public cloud is an investment rather than a cost cutting measure is also shown by the study finding that, for most businesses, the shift to public cloud is set to prompt an increase in operational expenditure (opex) and a decrease in capital expenditure (capex).

According to Gartner, “The great majority of IT organizations (85%) anticipated and communicated with finance about changes in opex versus capex ratio.”

Garner further says, “Despite this, the changes in opex vs. capex ratio still caused budget issues/pressures for 47% of organizations, putting funding at risk. Thirty-two percent reported no issues with the change.”

André Corrêa, Cloud Practice Leader at Stefanini Group, comments: “This latest Gartner study confirms what we’ve long expected – the transition to public cloud is something that can be valuable, rather than something for businesses to be intimidated by – and it isn’t primarily driven by costs.

“Instead, despite the challenges involved, businesses should view public cloud as a way to achieve the flexibility and agility that is required when operating in the current disrupted landscape. Of course, this means that a commensurate rise in their approach to governance and security is required.”

Bruno Casillo Digital Delivery and Lean Agile CoE Director, Stefanini Group, adds: “Our view is that an effective cyber governance, risk and compliance (GRC) program is a fundamental aspect of confidently transitioning to the cloud, enabling companies to proactively meet their security and compliance objectives. With this in place, businesses can confidently benefit from the increased agility offered by public cloud, while also reducing or eliminating their need to maintain software or hardware.”

 

Gartner, The Role of the Public Cloud in Digital Business Acceleration, 26 August 2021, Chris Ganly, Bryan Hayes

GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

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