UK Cloud Survey 2023: Opportunities opening up for those that can become 'cloud-powered'

Cloud remains an untapped opportunity for many

Levels of cloud adoption vary significantly across organisations and industries. Some have been slow to adopt, while those in industries such as banking, insurance and media have driven adoption hard. Wherever businesses are in their tech transformation, the speed at which technologies are evolving means there is now an urgent need to accelerate strategies. Those that do not have a fit-for-purpose cloud and data strategy will get left behind, unable to grasp the benefits of new technologies such as AI and GenAI that depend on cloud. 

While 35% of respondent organisations might be ‘leading adopters’, exploiting cloud services for IT modernisation, just 16% are considered to be truly ‘cloud-powered’. These organisations have gone ‘all-in’ on cloud, with adoption scaled throughout the business - from customer-facing applications and revenue-generating services to back-office and infrastructure. As a result, they are more likely to achieve measurable value: faster time to market, increased innovation, better customer experiences, cost savings, and more.

And that value gap looks set to increase as those with people, processes, data and applications running on modern cloud platforms move faster and capture greater value through innovative tech such as AI and GenAI. Organisations that have already moved these technologies to the core of their business will see even greater success. 

Tellingly, organisations that are all-in on cloud also expect to see measurable returns on investment within the next 12 months, across a range of areas, from agility to resilience.

However, not everyone is so advanced, with many uses still tactical and IT-centric. Around a third of respondents are only using cloud for IT improvement and rewriting existing applications, with one in ten using it purely for migration of existing applications and workloads.

Some have broad challenges to overcome, from budgetary constraints, to a lack of skills and technology leadership. Others have partial or ‘patchwork’ deployments of cloud, leaving their current technology inconsistent with their future need. Even some cloud-powered companies may need assistance locating new revenue streams or unlocking potential.

Overcoming such barriers requires a collaborative, enterprise-wide approach. But there is often a concern about whether leaders have the sufficient expertise and experience needed to drive the necessary change. 

Changing mindsets through leadership

Ushering in a new way to do business demands significant change to how the organisation operates. Those that don’t transform operations processes, procedures and people as part of any cloud strategy will find costs can spiral quickly. Many have previously come unstuck here, making the wrong strategic decisions ahead of adopting cloud technologies, ending up with little more than a costly migration and expensive ongoing management costs.

One way of enabling organisations to recognise and embrace the need for change is through executive upskilling. We’re increasingly seeing forward-thinking executives looking to understand where cloud-based services can unlock commercial opportunities. Without the right level of c-suite education, organisations risk missing key areas of opportunity, underinvesting in change, or failing to secure the full competitive advantage cloud technologies offer.

The desire to embrace GenAI is one such example. Despite 38% of leaders looking to invest in GenAI and machine learning in the next 12 months, few are aware they may not yet be in a position to deploy it successfully. Fragmented cloud adoption means this type of technology is only likely to exacerbate poor systems and architecture, or highlight the lack of data control throughout the business. 

For many in the c-suite, investing time in understanding the possibilities of cloud technologies has historically not been a priority. It must now become one, requiring a change of leadership mindset and embracing curiosity.

The power of collaboration

Our survey also reveals an inconsistent approach as to which senior leaders are involved in decision-making around major cloud-based transformation initiatives.

Respondents noted a mix of individuals from across the c-suite. This is encouraging as it suggests organisations increasingly recognise the broader value that cloud services can unlock - it's no longer just about replacing data centres or improving IT resilience, but about collaborating with the wider business and helping functions understand and capture the value that cloud services can offer.

However, such an approach can create risks to decision-making, focus and execution. Executives with a technology-heavy background, for example, can sometimes push an agenda that focuses on a tech-centric transformation, investing in expensive and over-engineered solutions. Conversely, those with a stronger finance focus can risk constraining investment, ambition and execution speed by focusing on incremental change, short-term cost-reduction and immediate returns.

Cloud-powered organisations have usually found a way to collaborate in the boardroom and at senior executive level, often by linking cloud technologies and services to a much larger strategic transformation. Tactical, functional cloud deployments can often run in parallel to create value, but the strategy has to be joined-up and organisation-wide. 

The AI Imperative

Executives increasingly recognise that data has become the critical component in transformation efforts, whether it's using AI to drive efficiency or in creating new commercial opportunities.

Access to richer, better data and insights enables smarter decision-making and greater AI insights, giving organisations the power and freedom to create new revenue streams and prospects. Capturing data across the entire business - from customers, suppliers, and supply chains, to operations departments, and more - will also translate to clearer benefits in areas such as measuring progress to sustainability goals and being able to support ever-deepening ESG reporting requirements.

In its simplest form, that might mean using data to drive growth through better understanding of customers and market trends, creating new AI based services, or improving workflows and services. But the real value increasingly comes from commercialising the data itself - for example, the ability to sell anonymised insights on cloud application exchanges, unlocking entirely different business models and streams of revenue.

An enterprise-wide data strategy - powered and enabled by modernised cloud-based applications, platforms and services - also allows organisations to bring in machine learning and AI to reduce costs, add intelligence and increase speed. When aligned with defined ambitions for value creation and coupled with the right solutions, technologies like GenAI can unlock the potential of an organisation's data to bring transformative results.

Turning ambition into reality

Expectation has always been high when it comes to cloud technologies, yet some organisations are still struggling to capture the full value or to further strategic goals. 

But those that have seen success have clear, common traits. Leadership is equipped and tech-savvy, with a business-focused approach. Any strategy is business-led, ambitious and extends across the organisation, with investments in people and changes to how they work. Individuals understand the strategic value that building technology capability brings as a source of differentiation, and how a different approach to working with partners on transformation can help reinvent the business.

Organisations have an important decision to make when it comes to going all-in on cloud. The good news is the path to success is clearer than it has ever been. And with the imperative to act only likely to get more pressing as technologies like AI and GenAI become increasingly mainstream, we will increasingly see the gaps widen between the cloud ‘haves’ and the ‘have-nots’. The decisions organisations take at this cloud crossroads will be critical to the strategy they implement and the future success that follows.