Organisations continue to be burnt by under-forecasting cloud migration costs and complexity

By michaelhouse -

Organisations continue to be burnt by under-forecasting cloud migration costs and complexity

  • Cloud migration remains a ‘critical’ or ‘high priority’ business initiative for most business leaders
  • Despite 2+ year migration journeys, 40 percent of businesses still underestimate their costs
  • 47 percent of organisations realised during a migration they lacked the requisite internal skills
  • Just 28 percent of businesses say the cloud has been comprehensively embedded across their organisation

London, 18th June, 2018 – Businesses have big ambitions for the cloud to transform their agility and reduce overall business expenditure, but unrealistic cost estimates and unforeseen complexities are still dramatically increasing the time-to-value of cloud migration programmes. Only 28 percent of businesses say the cloud has been comprehensively embedded across their organisation.

A June 2018 study, Maintaining Momentum: Cloud Migration Learnings, commissioned by Rackspace and conducted by Forrester Consulting, describes the ongoing organisational focus on moving applications and data to the cloud. 71 percent of business and IT decision makers across the UK, France, Germany and the U.S. report that they are now more than two years into their cloud journey, with the migration of existing workloads into a public or private cloud environment remaining a ‘critical’ or ‘high priority’ business initiative for 81 percent of business leaders over the next 12 months.

Predicting cost

Half of business and IT decision makers (50 percent) identify significant cost reduction as their main driver for cloud adoption. However, several years in, 40 percent of businesses stated that their cloud migration costs were still higher than expected.

The biggest disparity uncovered was around upgrading, rationalising and/or replacing legacy business apps and systems, with 60 percent of respondents identifying costs as higher than expected.

Execution complexity

The survey also found that businesses massively underestimated the greater task at hand, encountering a number of both technical and non-technical internal barriers.

During the planning and executing stages, data issues around capture, cleaning, and governance; workload management in the cloud; and vision and strategy for the transformation were the most commonly cited challenges (40 percent, 34 percent and 31 percent respectively).

Post-migration, respondents highlighted a lack of adequate user training; cultural resistance to cloud migration; and inadequate change management programmes as their greatest challenges (44 percent, 37 percent and 36 percent respectively).

Delivering on the vision

Companies need a clear strategy that connects both business and IT to minimise cloud migration challenges and accelerate the realisation of benefits, with a lack of a strategic vision cited as an issue before and during migration to cloud by 58 percent of respondents.

‘Going it alone’ also increases the scale of the challenge. 78 percent of businesses already recognise the role of service partners in helping them reshape operating models to support their cloud adoption strategy. And when considering what they’d do differently, half (51 percent) of respondents said they would hire experienced cloud experts to help with migration projects, with 41 percent recognising the need to increase the assistance they get from advisory and consulting services.

Commenting on the findings Adam Evans, director of Professional Services at Rackspace said: “Cloud is the engine of digital transformation and a critical enablement factor for innovation, cost reduction and CX initiatives. But while most organisations we meet have started on their cloud journey, I would say the majority did not expect the scale of the ongoing challenge.”

“As a business generation, we are getting faster at new technology adoption, but we still seem to stumble when it comes to understanding the requirements (and limitations) of the business consuming it. Introducing new cloud-based operating practices across an entire organisation is rarely straightforward, as with anything involving people, processes and their relationship with technology. Managing the gap between expectation and reality plays a huge role in programme success, so it’s imperative that organisations start with an accurate perspective on their maturity, capability and mindset. Only then can we start to forecast cost and complexity reliably.”

Forrester conducted an online survey of 326 organisations in UK, France, Germany, and the U.S. to evaluate lessons learned from migrating applications and workloads into cloud environments. Survey participants included decision makers in both business and IT and were manager level or above. Questions provided to the participants asked the biggest challenges they realised before, during and after they migrated their workloads into cloud environments. The study began in February 2018 and was completed in May 2018. Read the full report.

About Rackspace

Rackspace is modernizing IT in today’s multi-cloud world. By delivering IT as a service, we help customers of all industries, sizes, and locations realize the power of digital transformation without the complexity and expense of managing it on their own. Our comprehensive portfolio of managed services across applications, data, security and infrastructure on the world’s leading public and private cloud platforms enables us to provide unbiased expertise. Rackspace has been honoured by Fortune, Forbes, Glassdoor and others as one of the best places to work. Learn more at

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Michael House
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