CloudHealth Technologies and Cloud Technology Partners (CTP) recently conducted a study called Secrets of the Cloud Leaders, which drilled down into the how and why certain enterprises reap larger benefits from their cloud deployments with a focus on behaviors of cloud leaders to reveal patterns of success, as well as the outcomes more mature cloud organizations are gaining as opposed to organizations that are struggling or are in early adoption. 

To learn more about the study and its findings, I spoke with Melodye Mueller, VP of Marketing and Strategic Alliances at CloudHealth Technologies.

VMblog:  What makes a cloud leader?  And what about a laggard?

Melodye Mueller:  Great question. Before I answer it's worth noting that, while the study refers to "leaders" and "laggards" those terms are primarily intended to illuminate patterns within the survey data so we could extrapolate best practices. They shouldn't be thought of as a ranking system for enterprises; at the end of the day, it's not easy to run an efficient, effective cloud program. It's something that not even cloud leaders have necessarily figured out.

Basically, a cloud leader is a best-in-class organization that is seeing superior outcomes from their cloud deployment -- whether it's competitive advantage, greater top-line revenue, increased agility, or better risk mitigation. Laggards are their counterparts -- the organizations that aren't as successful at leveraging the cloud to drive business growth.

VMblog:  Automation comes up a lot in this survey.  Why is that?  Is there a reluctance to automate, or a fear of doing so?

Mueller:  Automation was definitely a recurring theme, not just in the survey responses but also in the focus groups. What we saw was that cloud leaders are much more adept at automation -- 72% of them automate, compared with just 31% of the laggards -- and because they rely on fewer manual processes they're able to free up resources and run a cloud program that's more efficient overall.

I wouldn't say that there was a reluctance or a fear of automation. More commonly, people just tend to feel overwhelmed by the size of their business or the amount of processes in place. They want to fix the problem, they just don't know where to begin, and that can be frustrating. For example, in one of the focus groups, we heard from a finance manager in the healthcare industry who said that "most things at my company are manual, and that's a lot of why we're not utilizing cloud the way we should to be more competitive."

VMblog:  Managing cloud cost is a frequently cited challenge.  What did this study reveal about how leaders approach cost management?

Mueller:  Cost management continues to be THE hot topic. Organizations across the board are looking for strategies to improve resource usage, efficiency, and manage cloud spend. CloudHealth Technologies helps our customers deal with these issues all the time, and the survey responses echoed a lot of what we hear from them on a daily basis.

Unsurprisingly, leaders are better at cost management: 95% are able to calculate costs down to the business unit. They recognize that cost management is about more than simply saving money. It's a distinction between TCO and ROI: are you just looking at savings, or are you considering greater value like time-to-market, new revenue streams, etc?

Both in the survey and in the focus groups, leaders took a holistic view of their environment and maintained visibility across their entire infrastructure. They minimize manual operations in favor of automation. Laggards also struggled with the visibility piece.

This is not to say that cloud leaders universally excel. As I mentioned earlier, these are really hard problems to solve and you'd be hard pressed to find any business that has things 100% figured out.

For example, one area where even the leaders came up lacking was governance. Results showed they could do a better job at providing enterprise-wide controls and oversight to mitigate cost overruns.

VMblog:  Security is another major challenge that comes up a lot when people talk about cloud.  What, if anything, do the cloud leaders have to teach us about security and risk?

Mueller:  A lot of people lump Risk, Security and Compliance together. They are tightly connected, but also different.

"Risk management," for one thing, focuses on trade-offs. One interesting finding was that leaders felt more exposed and "at risk". In fact, 55% of cloud leaders felt their brand is exposed to risk as a result of cloud initiatives that do not adhere to organizational governance policies. However, they were 3.7 times more likely to quickly identify risk and address challenges as they came (sometimes within hours).

One potential explanation: due to better visibility and overall program transparency, the leaders are more aware of what's happening in their environment. This causes them to be more realistic about the extent to which their business is exposed to risk, which may be why they are so skilled at fast risk mitigation.

With regard to Security and Compliance, organizations across the board still feel challenged. This is particularly true with global organizations, which are often faced with vast differences in compliance and regulatory requirements. In a focus group, a senior manager of infrastructure operations in the healthcare industry called this out:

"There are a lot of challenges when it comes to regulations. A big challenge is local capacity and regulatory restrictions on how information can be stored and how it should be accessed. It is a challenge to make sure that something that we're rolling out in the Americas is also applicable for our Europe and APAC offices. The process is very convoluted."

VMblog:  What are some of the best practices that enterprises can adopt to ensure a better, more impactful cloud program?

Mueller:  I'll distill this list into 6 key takeaways, based on the survey findings. However, there's a lot that needs to be taken into account when you're seeking to optimize your cloud program, including where the enterprise lies on the cloud maturity curve and its primary business goals. There's no "one size fits all" approach, but this list is a good starting point. 

• Define your plan of attack. Set a strategy up-front, and chart a course of action that aligns with what you're looking to gain from your enterprise cloud initiatives.

• Think beyond cost. We have a saying, "cost is more than just dollars and cents" because performance, utilization, and security factor in as well.

• Measure, benchmark and continuously optimize. Cloud leaders showed an ongoing commitment to optimization, some even brought in outside firms to help review and accelerate their processes.

• Designate responsibility and empower ownership. In the focus groups, almost all leaders had either an individual or a team responsible for defining and enforcing cloud best practices, pushing for continuous optimization, and driving smart growth.

• Centralize governance. I'll quote one of the focus group participants once again. It was a service admin in the technology industry: "Like all machines with complicated moving parts, when you have too many cooks in the proverbial kitchen, things aren't always as effective as you'd like." Governance lets you set and automate policies that simplify operations and speed decision making.

• Automate, automate, automate. I already mentioned this, but it bears repeating: When it comes to automation the leaders far outpaced their counterparts. Let automated policies do the heavy lifting for your governance program.

VMblog:  How do you measure cloud's impact on competitive advantage or bottom line?

Mueller:  This is another area where neither the leaders nor the laggards had a perfect solution. In focus groups, we heard repeatedly that organizations were focused on the return on investment of their cloud initiatives, but when pressed on how they were evaluating ROI the metrics turned out to focus instead on total cost of ownership: spend, man hours, etc.

Ask yourself, "If I got 1 million man hours back, what would that do for my organization? What is that worth?" Maybe you'd create new products or services, open up new markets, or realize new revenue potential. At the end of the day, think about how the cloud can help you grow your business and then focus on tracking that for true ROI.

VMblog:  Was there any major takeaway from the study that surprised you?  If so, what was it and why?

Mueller:  It came as a surprise that the leaders had not fully baked how they were measuring success. As I stated in the previous section, many of the respondents calculated return on their investment in very rudimentary ways. Even the leaders hadn't really broken it down to a "cost of goods" calculation the way they would in a data center. If they're taking advantage of their cloud environment at scale, why are they not thinking in some form or fashion about those same types of metrics?

This feeling was shared by our partners at CTP, who conducted the study jointly with CloudHealth Technologies. They emphasize that success in the cloud is achievable, but not inevitable. Everything is different: the tooling, the processes, the operating environment ... everything!

VMblog:  How can readers get their hands on this report?

Mueller:  If you want to jump right to the facts, you can download the report here. If you'd like a deep dive on the key takeaways and want to hear a third-party's perspective on how enterprises are putting these learnings into practice, this webinar interview drills down in the findings and distills actionable, high-level best practices.

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About Melodye Mueller

Melodye has built her career as a high tech sales and marketing executive in the telecommunications, managed services and cloud computing industries. Her experience includes 20+ years of demonstrated success developing customer-centric programs, building teams and developing markets that result in profitable growth. Prior to CloudHealth Technologies she was Vice President of Marketing at NaviSite - a Time Warner Cable Company - and Vice President of Sales and Marketing at Whaleback Systems. Melodye has also held senior sales and marketing leadership positions at Lucent/AT&T and Agfa. She is passionate about working with young adults to develop new skills that build their career.