Cloud Strategy: the organization’s Strategy describing its objectives regarding the use of cloud services.
A good Cloud Strategy is:
- Future proof
- Aligned with strategic business objectives
- Derived from the Digital Strategy
- Part of a Sourcing Strategy
- In alignment with the Security Strategy
- Contains a reversibility plan (Exit Strategy)
- Allows for structured analysis of application functionality by providing a Decision Tree
- Provides a Roadmap for the existing landscape
The Cloud Strategy should set the target for future application workloads and also provide a roadmap on how to deal with existing applications and data centers. A Cloud Strategy is ‘activated’ from the moment it is approved by the Steering Committee or accepted by the Board. From that moment on the organization will base decisions about purchasing or refactoring applications in alignment with the Cloud Strategy. As most organizations have an extensive installed base of applications in the data center, the question is: how is the organization going to deal with the remainder of applications? A Roadmap should provide insight into what needs to be done with regards to organizational capabilities, technical prerequisites, governance and workload migrations.
A high priority of your cloud strategy might be to relieve the IT operations Department from the burden of maintaining applications that provide limited competitive advantage to the organization. These commodity applications are generally quite expensive to maintain (the costs involved of keeping the lights on are generally high) and the competitive advantage is limited. By freeing up resources on the non-competitive side of the application landscape (see cloud placement decisions). The organization is able to spend valuable resources (in time and money) on the applications that make a difference.
What does a Cloud Strategy look like?
A very simple Cloud Strategy may be something like:
Commodity Applications / Functionality: Functionality that provides low competitive advantage to our organization will be procured ‘as-a-service’; Alternatively we will host this Commodity Functionality in the Public Cloud on Platform-as-a-Service or Infrastructure-as-a-Service. Competitive Applications / Functionality: We will develop Competitive Functionality in an cloud-native manner using Platform-as-a-Service capabilities.
By procuring commodity functionality from Software as a Service providers (SaaS) or Business Process as a Service providers (BPaaS) the organization effectively outsources non-core operational activities. This relieves the IT operations team from activities that are not contributing to the organizations competitiveness. In this way money and resources are made available to work on functionality that does provide the organization with competitive advantage. A cloud strategy that focusses on innovation is used by many organizations world-wide (* rightscale state of cloud 2019).
This leads to a preference for SaaS (1) over PaaS (2) over IaaS (3) and can be visualized as:
In reality a Cloud Strategy will be more fine grained and provides more options to choose from different target Landing Zones. Here are some examples:
- Applications that rely on traditional database platforms might require a separate landing zone that is compatible with the licensing model;
- Data classified as ‘secret’ may require additional security;
- Functionality that is dependent on traditional ERP applications might require close proximity ;
- Some functionality may be developed using low-code / no-code platforms;
There are of course more dimensions to determining the optimal landing zone for an application. Determining the decision criteria and rules upfront might be a bit challenging but this allows both the business and the enterprise architects to follow the same set of rules and will provide clarity about the sourcing strategy. A useful way to represent the decision rules is by means of a decision tree.
Example interpretation of the above strategy:
A traditional bank that is planning to launch a new brand tailored to a specific product/market combination needs software to fulfil core-banking functionality like debit/credit accounts; deposit functionality and payment cards. When the bank applies the above Cloud Strategy it will determine that the core banking software is a commodity and by itself does not provide a competitive advantage. It is the way they parameter and configure the software that makes its product offering competitive (for example the interest rates). The bank decides to procure the core banking functionality ‘as-a-service’ by using a SaaS provider to provide this functionality. Instead they focus all their attention and resources on the development of end-user oriented self-service portals and mobile applications for this specific product/market combination. It is the end-user functionality that ultimately determines the success of this new product/market combination.