Over the past few years, organizations have faced significant challenges as they have had to adapt to economic, political, and societal changes. Migrating and Modernizing Workloads, These challenges are not over yet, as the business environment remains uncertain and there are ongoing concerns such as inflation, supply chain disruptions, and rising energy costs.
Microsoft believes that organizations can best navigate this uncertainty by doing more with fewer resources, such as reducing complexity and cost while increasing agility, resilience, and innovation. This can be achieved through the use of digital technologies to achieve more despite current limitations.
Migrating workloads to the cloud allow organizations to better align their IT investments with business needs while taking advantage of the cost savings provided by cloud economies of scale. Modern infrastructure and cloud capabilities can also enable an organization’s IT workforce to focus on the workloads and applications that are most important to their customers.
To gain insight into the challenges faced by our customers and their plans for cloud adoption, Microsoft conducted a global survey with over 1200 IT decision-makers.
According to the survey, 62% of organizations have a migration and modernization strategy in place, demonstrating the growing importance of cloud adoption in IT transformation. The top motivators for these organizations are reducing overall business costs, future-proofing business strategy, and driving revenue growth. The survey also showed that security, business continuity, disaster recovery, and scalability are among the top benefits desired from cloud migrations. Despite these benefits, Microsoft expects that return on investment will continue to be a top consideration for customers as they prioritize cloud initiatives, whether it be optimizing their existing cloud workloads or moving additional workloads to the cloud. This focus on cost optimization and the rise of financial operations teams (FinOps) is also reflected in the Flexera State of the Cloud 2022 report, which found that optimizing the existing use of the cloud (cost savings) was the top initiative for the sixth year in a row, followed by migrating more workloads to the cloud.
Organizations are taking a comprehensive approach to their cloud adoption plans by evaluating their entire IT infrastructure to better prepare for the future. According to the survey, the number of organizations with more than half of their workloads in the cloud will increase from 27% to 47% over the next 18 months, with investments covering both business-critical and non-business-critical workloads. Additionally, the survey found that organizations with a cloud migration and modernization strategy are 58% more likely to be “cloud-only” (with all or nearly all applications and workloads running in the cloud) three years from now.
According to the survey, 82% of organizations said that migrating to the cloud is a stepping stone toward digital transformation. Migrating and modernizing workloads to the cloud are about moving them to a new platform, while modernization involves adapting existing applications and workloads to take advantage of cloud-native technologies like Platform-as-a-Service (PaaS) or containers. Of the workloads that have already been migrated, 74% were identified as candidates for modernization. Modernizing workloads can facilitate digital transformation, whether by speeding up product innovation cycles or providing personalized end-user experiences.
Organizations are continuing to adopt multi-cloud approaches and are looking for cross-cloud management and interoperability from their cloud providers. According to our recent research on hybrid and multi-cloud, 71% of customers surveyed want to retain investment flexibility and access the best cloud capabilities and are planning to implement a hybrid or multi-cloud strategy.
There are several barriers that can slow down cloud adoption, including the complexities of cloud-to-cloud integration, adapting existing applications, and integrating with legacy systems. It is therefore not surprising that support from a dedicated migration and modernization team was the top priority for customers surveyed in terms of their wishes from cloud vendors. Other important areas identified in the survey included post-migration support, access to engineering resources, and assistance with technical skills development. These findings have significant implications for cloud providers as they develop programs and investments to support customers during these uncertain times.
Microsoft has been undergoing its own digital transformation journey since we started migrating on-premises workloads to the cloud in 2014. We have used the built-in tools and data insights provided by Azure to optimize costs (such as Azure Advisor, Azure Cost Management and Billing, and Azure Monitor) and reinvest in modernization to drive business growth. Today, more than 95% of our workloads run on the cloud, and while our annual budget for Azure has remained constant since 2014, Microsoft has grown by more than 20%. Our own experience and insights inform how we can help customers meet their current and future technology needs.
Fiserv, a global fintech and payment company, improved its payment processing infrastructure to streamline operations, reducing risk and saving costs. Perrigo, a worldwide producer, and supplier of consumer self-care products for businesses, gained agility and flexibility by modernizing finance workloads to create a single source of truth for finance. The Bank of Angola became the first bank in Angola to embrace digital transformation by moving to the cloud to innovate and improve processes and infrastructure. O2 Czech Republic, the leading telecommunications company in the Czech Republic, achieved 30% total cost of ownership (TCO) savings for every workload they migrated while improving security and scaling their entertainment business.
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