While there are some compelling benefits of moving to the cloud, cloud adoption is also causing headaches for CIOs, who must grapple with major vendors going all-cloud, cost spikes driving repatriation from the cloud, and unexpected business risks.
This emerged during a virtual round table hosted by the Institute of Information Technology Professionals South Africa (IITPSA) for its professional CIOs (Pr.CIO).
The round table, held under Chatham House rules, revealed that moving to cloud has not been plain sailing in most organisations.
One Pr.CIO noted: “The buzzword now is repatriation – where the costs of cloud have gone through the roof, so organisations are repatriating services. You can spin cloud services up so quickly that if you don’t manage the use it will be detrimental to the business. Organisations have to be disciplined, and put some structure in place to manage the costs. ”
Disruption for medical CIOs
Another Pr.CIO pointed to the disruption caused by vendors moving to cloud based services. He said the medical sector was ‘scrambling’ to find solutions in light of SAP’s decision to end support for the medical and healthcare patient management solution (IS-H) by 2027.
“The healthcare industry has relied on SAP as the industry standard for healthcare practice solutions that manage areas like health records and the patient journey. For patient continuity and in terms of the healthcare provisions, we must store patient data indefinitely. Now we in the medical and health space are effectively being forced into the cloud whether we like it or not.
“If we choose not to, we can repatriate those services to our detriment. Everyone’s frantically trying to find a solution. Industry CIOs are now working quite closely together to overcome this challenge. Some are saying let’s go to Oracle, some are saying let’s buy a stopgap solution, some are saying we will host it in our own hyperscaler solution and just run without support for three years until we are ready to move.”
He added: “The disruption in the industry is immense. You’ve got ROI measures out the window, a future plan that you have to take into account, and a retraining and recertification of skills of the existing workforce. The lesson learned from this is that while we all thought at the time that cloud was something we could move towards, the reality is the underpinnings of this have had dire consequences to costing.
“The rate of exchange has a direct impact on the affordability of solutions in this country. Whether you choose a private or hyperscaler solution, all of them have some linkage back to international currency.”
Regulatory interference coming
A Pr.CIO and consultant predicted: “I think we are going to see a period of consolidation and regulatory interference over the next few years, especially given Microsoft’s licensing manoeuvres.
“If you’ve got existing licenses it doesn’t matter that much which cloud provider you move to, but it’s significantly cheaper for most organisations to use Azure if you’re Windows based purely because of the way that Microsoft handles the licensing. The EU regulators are looking at that from an antitrust point of view and I suspect we will see regulatory developments here too.”
SA has ‘blind faith’ in cloud
The Pr.CIOs said organisations – and boards – lacked the technical knowledge to minimise business risks around cloud.
Said one: “Because of South Africa’s current infrastructure challenges, cloud is very appealing to an awful lot of businesses. But many lack a full understanding of cloud’s pros and cons.”
He noted that many have not considered business continuity in the event of a loss of cloud services, ransomware attacks on the cloud service, or believe they don’t need backups if they are in the cloud.
“It unfortunately shows ignorance. That’s the sort of thing that boards are going to get penalised for because they have a fiduciary responsibility to their shareholders and if they don’t understand the basics of the environment, how can they get into it?”
The Pr.CIOs emphasised the CIO’s role in educating organisations. Said one: “A thing a lot of CIOs have not handled particularly well is educating the boards about what is required. Ultimately, when you get down to it, if the CIO is the custodian of the organisation’s data from the board’s perspective, they have a responsibility to ensure that the board is able to make an informed decision. There are going to be court cases on this. There have been one or two in the US and the rest of the world will follow suit.”
Benefits of the cloud
The Pr.CIOs agreed that the cloud offers myriad benefits, including scalability, choice and an additional layer of security.
One noted: The overwhelming benefit that is not spoken about enough is that having a public cloud solution which enjoys the benefit of a functional roadmap of enhancement – typically driven by a community of users – means you are always benefiting from regular new functionality such as AI and process automation, in that service you consume. In the past you were reliant on skills within the business to take the journey of optimising the technology, managing the change, rolling out new functionalities. In this new way of work, it’s done for you to a large extent, and that’s a huge value proposition.”
Another said: “The immediate benefits are wonderful scalability, a decloupling of reliance on on-prem infrastructure. But at the same time, cloud skills can be a problem, and bandwidth – especially outside of the main centres – can be a significant issue. Another potential disadvantage is that the cloud requires a different degree of awareness of your estate.
“However, it’s a wonderful tool to have in your tool chest. It’s going to take a while for people to understand that the future is neither cloud nor on-prem; the future is ‘it depends’. Even hybrid cloud is not suitable for every organisation. You want the right tool for what you want to do. The most important thing is cloud’s flexibility and the fact that you are spoilt for choice in terms for solutions.”
“The cloud has also brought major innovation, and the ability to apply changes in real time to environments,” said one.
For SMMEs, the cloud offers advantages such as no upfront spend, easy accessibility and a range of pre-built solutions for businesses that can’t invest in on-prem hardware or don’t have a lot of technical acumen, they agreed.
A Pr. CIO added: “The reality now is that most CIOs and businesses are saying they will introduce a level of automation they are comfortable with. But the reality is AI is here and if you don’t embrace its capabilities, you will be left behind. It’s important to remember that AI tools will function best in a cloud environment.”