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Cloud

A Strategic Operating Model for Cloud Value Optimization

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The ubiquity of cloud technology in modern business operations is undeniable, with most organizations embracing cloud services. Reports suggest that almost all companies across various industries leverage cloud capabilities to varying degrees. Despite economic uncertainties, the momentum of cloud computing adoption continues to rise. Gartner projections anticipate a 20% increase in public cloud spending, reaching nearly US$ 600 billion in the 2023-24. This optimistic trajectory is echoed by global tech and business leaders, with over 40% expressing intentions to increase investments in cloud-based services, aiming to strengthen organizational performance and resilience, according to insights from Google. 

The cloud's widespread adoption is met with challenges in translating potential benefits into tangible outcomes, deviating from the anticipated enhanced cost control. Surprisingly, managing cloud spending becomes a primary concern, surpassing challenges like security and skills shortages, leading some organizations to revert to on-premises infrastructure due to struggles with cloud expenditure intricacies. The prevailing reactive mindset towards cloud adoption, driven by competitive pressure and a narrow focus on cost optimization, has decision-makers perceiving clouds merely as an infrastructure play. Peer pressure in cloud migration is evident, yet senior leaders report increased expenditures, reduced spending predictability, and unrealized business value post-migration, posing challenges for CIOs and CTOs accountable to financial stakeholders. 

The disparity between expectations and realities in cloud adoption often stems from a fear of the unknown, with a risk-averse attitude hindering transitions. Experts propose mitigating risks and maximizing benefits through a comprehensive cloud strategy extending beyond infrastructure considerations. The necessity of such a strategy is evident in addressing challenges related to leasing and utilizing cloud space compared to traditional data center operations. Emphasizing the holistic nature of cloud integration, experts underscore the importance of defining the business value that cloud brings, emphasizing the crucial role of aligning teams, skills, capabilities, and ways of working. Advocates for a strategic approach emphasize viewing the cloud as a journey rather than a destination, with governance operating models playing a crucial role in effective cloud management. 

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