Back in 2016, we wrote an insight piece discussing the role of the Enterprise Architecture (EA) capability of an organisation in designing and delivering the architectures for future cloud environments, the pitfalls and some of the phony thinking that was touted at the time. The original article entitled “Cloudy Day” is available on request from Laing Russell. Prompted by listening to Peter Weil from CISR (Centre for Information Systems Research) at Massachusetts Institute of Technology (MIT) talk about their recent research on most effective strategies for “re-platforming” enterprises, we went back to the original “Cloudy Day” piece. Reviewing that five year old piece, it was interesting to note what’s changed and what’s endured. Especially as our work on strategy and enterprise architecture is increasingly focused on enabling the development of a digital platform for organisations. Digital platforms that make the most effective use of cloud capabilities.
The cloud industry is slated to grow from $371.4 Billion in 2021 to $832.1 Billion by 2025 according to the latest analyst’s figures. Back in 2016, we were predicting 36% pa growth from a $13.3 Billion starting point. By our calculations that 36% pa growth rate would have put us at about the $62 Billion mark in 2021, so we have comfortably outstripped that growth metric. AWS, Azure and Google Cloud Platform are now the market leaders and there other players in train as well. However, the majority of organisations are embracing hybrid architectures, adopting some cloud-based services across the landscape from IaaS to SaaS. Five years on, it is still the minority that are entirely cloud resident.
One significant shift in the narrative from 2016, is the move away from a cost-based benefit case for adopting the cloud to a benefit case based on business agility, flexibility and elasticity. The cost reduction argument was always a false narrative. Many organisations, to their peril, have fallen prey to the salesmen’s patter and ended up with higher running costs in the “cloud”. We have been involved in several turnaround initiatives where unpicking a simplistic rush to a ‘cloud nirvana’, has proved expensive, complex and time consuming. Today, we are all more acutely aware than ever that the hybrid architecture needs to designed with a clear-eyed view of how different aspects of the cloud environment enable value, reduce risk and at what cost. Once strategy, design and implementation path are set out they need to be governed tightly. An outcome of this shift is that quality vendors now offer multi-year payback schedules to justify the investment in the transition.
As more organisations look to transform to deliver value as a platform, their operating models are evolving such that value is delivered by an eco-system that extends beyond the traditional organisational boundaries. These operating models require a new level of engagement by organisational leaders in setting and governing digital strategy and architectures. For example, flexible integration and API management strategies are transformational utilities in their own right. However, if poorly architected they can become contributors to technical and organisational debt through design ‘cul-de-sacs’ and in-efficient processes. We are finding that EA needs to support the organisational leadership in being aware of the benefit opportunities and risks. EA are using new collaborative processes to produce design artifacts, with the associated commitment based on understanding, that will deliver for the organisation and its stakeholders.
Back in 2016 there was a greater scarcity of expertise in cloud technologies than there is today. The increased understanding of the “cloud” has helped ensure we have better technical architectures in this constantly developing environment. But organisations are still dependent on the strategic perspective that the EA brings. EA is as necessary as ever. EA helps make explicit that vital link between your hybrid cloud services and your organisation’s business strategy.