One of the biggest challenges impacting an enterprise’s ability to move to a hybrid or public cloud environment is getting a handle on the costs. ClOs need to know: What does it cost me today and what will it cost me tomorrow? This baseline can be very difficult to create — it involves comparing on-premises investments to cloud-based counterparts, not at all a straightforward exercise. And once an organization finally has a grasp of the infrastructure comparison, it’s only halfway there. The remaining pieces, including enterprise licenses and organizational design, still can be significant hurdles.
Industry analysts estimate enterprise software to be a US$350 billion market, with the vast percentage of services currently delivered on-premises. This is changing, however, and changing quickly. Web-native software-as-a-service (SaaS) adoption is skyrocketing, and driving traditional software vendors to deliver their software as a service as well. Public cloud infrastructure-as-a-service adoption is growing at such a torrid pace that developers can “rent” traditional enterprise software on a per-hour basis.
Additionally, current enterprise license agreements (ELAs) sometimes can impede broader cloud adoption. It can be difficult to renegotiate these ELAs to enable the licenses required to support a cloud or SaaS deployment. As we continue to help clients through their cloud transformation journey, we’re increasingly helping them make decisions about their software investments: Should they keep the software on-premises, move it to a cloud delivery model or run it in a hybrid model? As anyone who has worked with enterprise software licensing knows, understanding on-premises costs can be daunting. Adding multiple new delivery models to the mix makes it a complex challenge, indeed.
This is why we’re excited about our recently announced alliance with NPI, a leading spend-management consulting firm. Together, ISG and NPI are uniquely positioned to help clients understand the complete cost of ownership of a cloud transformation, be it a single application or an enterprise portfolio.
Global 1000 companies, for example, are gaining significant benefits from moving their collaboration infrastructure into Microsoft’s Office 365, but they are also facing complex decisions as a part of this transformation. Many of these decisions revolve around finding the appropriate licensing model to bridge existing enterprise agreement investments with the new licensing of Microsoft’s online services.
As enterprises continue to move their slice of the $350 billion enterprise software market to a cloud delivery model, ISG and NPI are a powerful combination to help them understand their current costs and make significant, long-term decisions about their software investments.
Contact me to learn how ISG can you help you with your cloud transformation.
About the authorSteve helps enterprises think through the opportunities and complexities brought about today’s dizzying array of emerging technologies. He is a seasoned professional, fluent in how to make transformational change with cloud, automation, mobile, or DevOps and discerning in where and when they add value. He has helped implement many global service delivery models and advised large multi-national corporations on their IT strategies. Steve co-authored Managing Global Development Risk, A Guide to Managing Global Software Development. As a Partner and member of ISG’s Executive Board, Steve leads ISG’s Digital Strategy and all ISG Service Lines for the Americas. Steve also leads ISG’s Alliance group and is ISG’s Executive Sponsor to the TBM Council.
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