back to article What happened to agility and new business models? Cloud benefits have all gone to IT

The migration of IT workloads to the cloud is benefiting tech departments rather than the wider business, according to a McKinsey survey. The interviews with around 50 European cloud leaders found that only one in three European companies monitors non-IT outcomes of cloud migration, such as cost savings outside IT (37 percent …

  1. 43300 Silver badge

    "The migration of IT workloads to the cloud is benefiting tech departments"

    Err, what?

    Hands up all those IT departments who prefer dealing with cloudy stuff!

    With on-prem you have a reasonable level of control over what gets installed, what is patched and when it's patched. With cloudy stuff there is much less control (none in the case of most SaaS products), and a supplier fuck-up can at any point cause a deluge of user complaints, which you are unable to do anything about other than lean on the supplier.

    And IaaS isn't more straightforward than on-prem infrastructure either - e.g. Azure is harder to configure than a Vsphere deployment. OK, you don't have to patch the firmware but that's not a major factor anyway and the local control makes it more than worth the time.

    1. Yankee Doodle Doofus Bronze badge

      I agree. Azure/M365 stuff is a pain to admin. They change things so often that when you run into an issue or just can't find an option, searching for a solution online is almost pointless. Even Microsoft's own online documentation is usually out of date.

    2. veti Silver badge

      "Benefiting tech departments" is not the same as "benefiting people who work in tech departments".

      Lower costs, lower budgets, lower headcount - these are all "benefits" from the company's point of view, and from the department's point of view if you're treating the department as a part of the company. But they're not something the people on the ground are likely to feel are doing much good.

      1. 43300 Silver badge

        The costs aren't actually lower though - it's just transferred from capex to opex, and over the lifespan of a set of on-prem servers (say 5 years) is pretty much always going to work out a lot more expensive.

        I've not seen evidence of the lower headcount either - it requires just as many people to administer, troubleshoot and support it.

        1. Anonymous Coward
          Anonymous Coward

          >> I've not seen evidence of the lower headcount either - it requires just as many people to administer, troubleshoot and support it

          Hah! try "the app owners become responsible to administer, troubleshoot and support it"

          1. 43300 Silver badge

            Best of luck with that!

            As anyone who has had the delightul experience of dealing with Microsoft support will know, it's normally much, much quicker to work it our yourself via asking on technical forums if necessary. And there's also a much greater chance of reaching an actual resolution too, rather than going round in endless circles!

  2. Mike 137 Silver badge

    "The migration of IT workloads to the cloud is benefiting tech departments"

    Maybe that shoud read ""The migration of IT workloads to the cloud is benefiting CTOs" -- job still safe, costs (apparently) reduced, less personal exposure when the sh*t hits the fan.

    1. Strong as Taishan Mountains

      Re: "The migration of IT workloads to the cloud is benefiting tech departments"

      lmao reg seems to be written by an MBA these days

    2. tatatata

      Re: "The migration of IT workloads to the cloud is benefiting tech departments"

      The benefit is clear.

      Cloud costs are variable costs, without fixed assets. On-prem is fixed costs. For shareholders, it is very important that the fixed costs are as low as possible.

      Nothing to do with IT; the only benefit is in bookkeeping.

    3. Anonymous Coward
      Anonymous Coward

      Re: "The migration of IT workloads to the cloud is benefiting tech departments"

      I can concur with that.

      A painful IT driven migration from Google Workspace to Microsoft 365 was our recent Cloud Evolution.

      - badly assessed

      - badly planned

      - badly executed

      - no document management strategy before

      - no document management strategy afterwards

      So a painful mail migration, and a jumble on stuff in Google Drive painfully migrated and most data was just lifted and shifted - from personal Google Drives to Personal OneDrive’s…. With the also differently incoherent Window’s file server data … just left as is local/on-prem.

      The benefits of Sharepoint have largely been squandered, and largely obscured by the lipstick on a pig that is Teams (replacing Google Chat). Little benefits from M365 and a ton of change disruption.

  3. Anonymous Coward
  4. Missing Semicolon Silver badge
    Facepalm

    "The focus of their cloud efforts, for example, has been disproportionately on improvements to IT, which generate lower rates of value than improvements to business operations. A shift to higher-value cloud use cases in business operations would create significantly more value."

    So improving IT is just an overhead, buying toys for the techies - didn't we outsource you suckers yet?

    But improving "business" processes (try saying it like the Eagle in Muppet Christmas Carol) is "important".

    Never mind that IT improvements generally mean less downtime, better service, and more security.

  5. AdamWill

    isn't it, though?

    "It is not much of an exaggeration to say that Europe's growth ambitions will hinge on its success in the cloud."

    Yes it is. It really, really is.

  6. Anonymous Coward
    Facepalm

    The migration of IT workloads to the cloud is benefiting tech departments?

    Wow there pilgrim, it was the c-suits that pushed for the move to “The Cloud”. Over the objection of their own IT department. Under the delusion they would save money by divesting the company of most of the IT staff. The people selling this were “The Cloud” providers and the gullible c-suits. I still haven't seen a good case for moving to “The Cloud”.

    1. Mike 137 Silver badge

      Re: The migration of IT workloads to the cloud is benefiting tech departments?

      "I still haven't seen a good case for moving to “The Cloud”"

      There are two good cases I know of:

      [1] if your business has fluctuating resource demand, a service that offers dynamic allocation can be cheaper and more effective than equipping for the expected maximum locally (this was the primary original selling point for 'cloud')

      [2] if you run an international organisation, a centralised cloud based provision can be cheaper and easier to manage than multiple on-prem data centres on different continents.

      For the average national scale or smaller business, there's no real advantage in the long run. The illusion that being in the 'cloud' eliminates the need for local IT (and particularly infosec) staff is just that -- an illusion. And the bills keep coming in -- miss a payment and your business stops.

      1. Rich 2 Silver badge

        Re: The migration of IT workloads to the cloud is benefiting tech departments?

        Re point [1] - How many businesses are actually in this camp? Fluctuating demand may be a thing for a startup, or maybe when businesses are merging or expanding. But once things settle down, I question just how many are constantly in this situation

        Re point [2] - Yea - that one has more legs. But these days, off-the-shelf turn-key stuff can connect your offices together. You can then centralise any meaty stuff in one office

  7. James Anderson Silver badge

    For those of you who didn’t spend/waste three years learning MBA speak what he said was “IT departments moved to the cloud cause they thought it was cheaper”.

    Still when you get paid for being cleverer use lots and lots of big words especially if your not that clever.

    1. 43300 Silver badge

      The IT departments are unlikely to have thought it was cheaper - they are probably going to have given a realistic view that it would be more expensive overall. It's the managament who implement it, both because they fall for the hype and because a lot of the costs move from capex to opex which they think looks better.

      1. Fred Daggy Silver badge
        Angel

        and they paid for an expensive consultant ...

        And they paid for an expensive consultancy that said what management wanted to hear.

        Funny, when the "benefits"* never materialised that the leadership jumped en masse to that same consultancy org at nice and senior positions.

        * Benefits were never actually cloudy anyway, it was tightly bundled with sacking staff in "high cost" countries and replacing them with low cost outsourced labour. "Let me explain again, you don't need to lift the mouse off your desk to make the pointer go up, move it along the desk". "The enter key is sometimes called the return key and for your purposes it does the same thing". "No, the black (or blue) box on the screen does not mean you have caused the machine to blow up, it is where you can run commands".

      2. James Anderson Silver badge

        If you parse all of that Value of Value for Value gobbledegook that is what the verbally enabled suit was saying.

  8. cageordie

    Yeah, we didn't ask for that

    I could say a lot about this, but nobody would read it. We recently moved to M365 and One Drive. We have not seen any benefit. This is the same sort of stupidity as buying Xeon processors in desktop machines. I have no idea who makes these decisions, but they are very hard to reverse or evade. We dealt with the move to One Drive for our home directories by copying everything to a local folder, which now isn't backed up, because the hit on build times was massive. We are a defense contractor, the idea of putting sensitive military information "in the cloud" should be anathema to our IT people. Apparently a Consultant said this was a good idea. They tried to make us charge the transition to our programs, but the DoD calls that sort of bullshit fraud. So we charged to IT, and they were furious. Our local bean counters, inside the project, said "it is no benefit to us, so we aren't paying for it".

    1. Fred Daggy Silver badge
      Headmaster

      Re: Yeah, we didn't ask for that

      I'm hoping that IT controls then the recharge to the departments, even if its a show-back rather than an actual charge-back. Finance hand you a bomb, you hand it right back.

      Former boss was a wiz at that. Somebody puts the crap on him, he redesigned the charge-back model so they were screwed. Enough that it (probably) cost said person their bonus. Remember that bit about IT costs now being OpEx and not Capex?

  9. Ken G Silver badge

    It's easy to measure cost, it's hard to measure benefit

    Reading the article, the "benefit" seems to come from cost savings in IT. I assume from reduced capex and moving opex to the consuming business units.

    Benefits other than that notional saving are aspirational and seldom measured.

  10. Rich 2 Silver badge

    Bollox

    "Nineteen out of 20 companies say they have improved operations – in terms of security and quality, for example"

    How do these businesses know that security has improved?

    I'm strongly guessing that they don't. They just read some marketing crap from the remote server - sorry "cloud" - vendor and that says "we have some security", and they have taken it at face value.

    And an improvement in quality? Quality of what? What are they measuring?

    This is bollocks

    Also, maybe the reason most are only looking at the IT savings angle (such that it is - for now), and not the "agile business ...whatever" is because the "agile business ...whatever" can happen regardless of whether you are using your own servers or someone else's. So moving your stuff to someone else's servers isn't going to make a jot of difference to whether or not your "agile business" stuff happens or doesn't, or in what form, except that it might be more unreliable, and probably less secure (though apparently not!) of course

    1. Eclectic Man Silver badge
      Unhappy

      Re: Bollox - `Humble Pie'

      I was going to say that although my personal experience of being 'McKinseyed' was painful and a total waste of time and effort (and money), they have a point that migration of company IT assets to 'the cloud' has not been assessed or managed well in many cases. Then I got to :

      "It is not much of an exaggeration to say that Europe's growth ambitions will hinge on its success in the cloud. Companies that effectively integrate gen AI in their transformations may achieve up to seven times the ROI of their peers for each migrated business domain. Such potential makes incorporating gen AI into cloud adoption a 'must-explore' action for successful cloud journeys."

      I mean WTF? Firstly all that pointless MBA-speak, then we get to "gen AI', which I assume is 'general Artificial Intelligence' which is nowhere near existing on Earth yet. How on Earth can they claim a seven-fold improvement in ROI (Return on Investment - I am not completely ignorant of manager-speak)? I can just hear Jim Hacker* asking, plaintively "But, Humphrey, what does it mean?"

      *The Minister for Administrative Affairs in the all too true 'Yes, Minister' and 'Yes, Prime Minister' on the BBC.

      1. Rich 2 Silver badge

        Re: Bollox - `Humble Pie'

        "It is not much of an exaggeration to say that Europe's growth ambitions will hinge on its success in the cloud. Companies that effectively integrate gen AI in their transformations may achieve up to seven times the ROI of their peers for each migrated business domain. Such potential makes incorporating gen AI into cloud adoption a 'must-explore' action for successful cloud journeys."

        That really is some top-shelf bullshit (for best effect, read it slowly, letting each word sink deep down into your bowels before going on to the next word). I would be proud to come up with some pointless, vacuous, meaningless gibberish like that. I'd have it on a T shirt and everything

        1. 43300 Silver badge

          Re: Bollox - `Humble Pie'

          And have you noticed that in the idiom of contemporary bullshit, everyone - absolutely EVERYONE - is going on a fucking 'journey' of some sort?

          1. Eclectic Man Silver badge
            Joke

            Re: Bollox - `Humble Pie'

            absolutely EVERYONE - is going on a fucking 'journey' of some sort?

            Ah, yes. I have just made a little 'journey' of my own. But don't worry, I remembered to wash my hands afterwards, like the good little boy I used to be.

      2. Ken G Silver badge

        GENerative AI

        not general, as in large language models.

        But yes, it's the blockchain of this decade, no discernable value.

  11. Anonymous Coward
    Facepalm

    Contradictory inconsistent nebulous generalizations

    If ninety five percent of companies are capturing value, it is not clear why this value is only in "isolated pockets and at subscale," implying limited or suboptimal benefit. How is capturing value for the IT dept not a benefit for the company as a whole.

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