Cloud Migration in Germany 2023
Why the strategy discussion is misleading
Cloud migration is still in its early stages in Germany. This is confirmed by a recent IDG study on the status of »Cloud migration 2023«.
IT analyst Dr. Andreas Stiehler examined the study for gridscale – also with regard to the current gridscale analysis on the development of the cloud provider market. His conclusion: The strategy discussion initiated by the study authors is based on a misinterpretation and overlooks the real challenges. In this article, he discusses how he arrives at this assessment and what conclusions he draws from the study results.
IDG Study provides comprehensive inventory view of Cloud migration 2023
The cloud offering landscape is changing: local cloud partner ecosystems are increasingly establishing themselves as an alternative to hyperscaler offerings. At the same time, a new generation of multi-cloud platforms is maturing – offering cloud service brokerage as a major feature. This is shown by current gridscale studies, analyses and blog posts. But is there really a demand for these offerings? Will the increase of cloud migration in Germany, triggered also by the pandemic, continue? What are the companies’ strategies to counter the dynamic development in the business and cloud environment?
A current IDG study on “Cloud Migration 2023” (published by CSO, CIO and Computerwoche), for which more than 300 managers of German companies were surveyed, is giving the answers. The study report is packed with figures and graphics on migration activity in Germany. Hardly a topic related to cloud migration was left out. Even cloud rollbacks were discussed. So all in all this survey gives a very comprehensive overview, that will be discussed hereby.
IDG study profile »Cloud Migration 2023«
Published by: CIO, CSO and COMPUTERWOCHE
Study partners: Lufthansa Industry Solutions, SPIRIT/21, Unit4 Business Software (all Gold), Ergon Informatik/Airlock, Comarch Software und Beratung, Vodafone (all Silver), NTT Germany, NTT DATA Business Solutions
Population: Senior (IT) decision-makers in companies in the DACH region: Those involved in strategic (IT) decision-making processes at C-level and in the business units (LoBs); decision-makers as well as experts from the IT area.
Participant generation: Personal e-mail invitation via exclusive company database of CIO, CSO and COMPUTERWOCHE and, to meet quota requirements, via external online access panels.
Total sample: 321 completed, qualified interviews
Questionnaire development and implementation: custom research team of CIO, CSO and COMPUTERWOCHE in coordination with the study partners.
Download available at: Computacenter’s subscription shop or for free through study partners such as Lufthansa Industry Solutions.
(Source: Computerwoche and independent research)
The core message is misleading: Cloud migration is at a standstill – despite having a strategy
So far, so good. However, when reading the report, the first thing that comes to mind is disillusionment. This is partly due to some sobering results on the status of cloud migration, but also to inconsistencies in their analysis. For example, the authors of the study state right at the beginning: »Only 40% of the respondents are currently implementing cloud migration with a strategy.« This statement, which is presented as »the key result« of the study, is striking – especially as the predecessor study »Cloud Migration 2021« came to precisely the opposite conclusion. At that time, the accompanying Computacenter article stated: »The majority of companies is following a strategical cloud migration approach.«
So have companies abandoned their belief in the need for a cloud strategy over the past two years? No. Rather, the core statement of this year’s IDG study is based on a misinterpretation. In fact, the study results show that only 39% of the surveyed companies have implemented at least one cloud migration project to date.
In other words, more than 60% of the surveyed companies have not even started their cloud migration yet! A sobering finding in itself, which deserves to be highlighted. However, the fact that the migrations were carried out without a strategy is the wrong conclusion and cannot be conveyed by the survey.
Quite the opposite: in fact, 40% of respondents said they had already implemented a cloud strategy – i.e. a similar number to those who said they had already carried out their first cloud migration projects. This suggests that the majority of the cloud migrations that have been implemented were very much strategically planned. Against this background, it is not surprising that the majority of respondents who have already carried out a cloud migration are satisfied (32%) or even very satisfied (46%) with the results. In the case of migration projects carried out without planning, satisfaction would certainly have been significantly lower.
Source: Computerwoche
In short, cloud migration is still in the starting blocks in Germany in 2023. However, those companies that have already tackled the issue – in contrast to what the communication on the study suggests – are proceeding in a thoroughly planned manner.
Good thing! Because a strategy that is derived from the company’s goals, anticipates the local conditions and takes into account the wide range of solution approaches is critical for success in cloud migration. The importance of a deep understanding of one’s own applications and their impact on the business model can be read in the expert study »Ten levers of cloudification« by gridscale and Intel®.
Enterprise plans point to cloud migration boom in coming months
Back to the other results of the IDG study, which suggest a dynamic catch-up process in the near future. For example, almost every second company surveyed (48%) is planning an initial cloud migration project within the next three years, including 27% as early as next year. In addition, the volume of workloads operated in the cloud is expected to increase significantly. If these ambitious plans actually are implemented, then a real cloud migration boom can be expected in 2023/2024.
The fact that, according to the study, around one in two of the companies surveyed has already developed a specific cloud strategy (approx. 34%) or has recently started to do so (approx. 15%) – even if this has not yet been implemented – speaks for it. This is also supported by the fact that more than two-thirds of the respondents report increasing (44%) or even strongly increasing IT budgets (25%) for cloud migration.
Companies rely on (hybrid) multi-cloud – with the greatest possible flexibility
And what do the cloud migration plans look like in specific terms? The majority of companies in this country, as the study once again shows, are relying on hybrid approaches in cloud operations, clearly pointing in the direction of (hybrid) multi-cloud. The study also confirms that most companies in this country prefer a private cloud (41%) or a hybrid cloud (31%) to a pure public cloud approach (24%).
Unfortunately, it remains unclear what the proportions are for migrations that have already been implemented. The percentages shown in the report refer both to companies that have already carried out a cloud migration and to those that are planning one.
Finally, it is interesting to note that, according to the respondents, around 28% of companies have already “rolled back” applications from the cloud back to their own IT data centers. A further 21% were planning to do so in the near future. A remarkable result – also measured against the fact that less than 40% of the companies have so far even carried out a cloud migration project.
It becomes clear that companies need or demand flexibility, also with regard to the rollback of cloud workloads. Whereby a cloud rollback does not necessarily indicate a failure of the cloud migration (as suggested in the study report).
The retrieval of workloads from cloud operation can also be justified economically under certain circumstances. For example, if the original cost advantages of cloud operation become obsolete as an industry or business model matures. See also the well-known analysis by andreessen.horowitz.
It remains to be said: The majority of companies in this country are planning to migrate more workloads to the cloud in the future, but want to retain maximum flexibility. And this desire is justified. After all, it is important to avoid a vendor lock-in with providers for strategic, financial and security reasons.
In this context edge computing is becoming increasingly important. The current gridscale analysis series on this topic shows that many innovative use cases (keyword: IoT) today require the interaction of various operating models along the cloud-edge continuum.
Migration requirements increase – study leaves out new approaches to solutions
However, it is also clear that the requirements for cloud migration increase the demands on the IT infrastructure and the complexity. Precisely these two aspects are also named by the respondents as the top challenges of cloud migration. This also explains why cloud migration has not yet started in many companies (despite already formulated cloud strategies).
This makes it all the more important that a new generation of solutions is maturing in the area of multi-cloud integration platforms and that local cloud partner ecosystems are establishing themselves as an alternative to the Hotel California offerings of the hyperscalers. It is a pity that these aspects are hardly referred to in the study. Instead, in-depth questions on public cloud use refer exclusively to the hyperskaler offerings.
Conclusion
Cloud managers should take a look at the immense pool of data and facts on cloud migration in Germany in 2023 provided by the current IDG study. However, they should do so critically. The study falls short of its potential when it comes to analyzing the results. For example, the misleading strategy discussion in the study report distracts from the actual challenges of cloud migration. In addition, the evaluation hardly differentiates between the statements of cloud users and planners, and no reference is made to the results of the 2021 study. This makes it difficult to separate wishful thinking from reality.
Finally, more in-depth questions on the planning and implementation of cloud migration would also be desirable. It must be admitted, however, that an empirical survey alone cannot shed light on all aspects of such a complex topic in the desired depth. For those responsible for the cloud in companies, it is therefore worth taking a look at the “Ten levers of cloudification” – a study by gridscale and Intel, which is based on in-depth interviews with renowned cloud experts and deals in detail with the practical aspects of cloud migration.