There is no doubt that cloud computing is delivering benefits on multiple fronts for enterprises. Today, we find organizations moving towards multi-cloud and hybrid cloud environments. In that light, enterprise CIOs are building resilient cloud strategies that can maximize their cloud benefits and reduce business risks.

However, a recent study titled “CIO Pulse: 2023 budgets & priorities” revealed some interesting things. According to it, 93% of CIOs expect their 2023 IT budget to increase. However, 83% face increased pressure to stretch their budget. This includes a key focus on cloud cost management and reducing technical debt. An additional 38% admit that their organizations have “miscalculated” their cloud budget, resulting in a major overspend.

Of course, as enterprises undergo digital transformation, the cloud is integral. However, there’s a love-hate relationship that enterprise CIOs share with the cloud.

Why CIOs Love and Favor the Cloud

The 2020 global pandemic highlighted the importance and increased the adoption of cloud technologies. This led to an increase in global spending on public and hybrid cloud platforms and services, something that’s expected to continue in the coming years.

Here are some of the reasons (or benefits) why CIOs love the cloud:

1. Scalability

For enterprise CIOs, scalability is one of the reasons why they opt for the cloud. Unlike on-premises infrastructure, cloud solutions enable growing businesses to quickly scale up or down their required resources (without attracting substantial expenses). For CIOs worried about losing control, the hybrid cloud offers the right balance to scale their business.

2. Flexibility

Besides scalability, flexibility is another benefit for organizations adopting the cloud. For instance, in the age of “data democratization,” cloud solutions seamlessly provide employees and business users with the information they need to carry out their work. They have the flexibility to access the data from any place and on any device. This is critical for companies to implement a successful “remote working” model.

3. Business Agility

In a competitive environment, companies need agility to introduce innovative products (or services) and identify market opportunities. At the organizational level, cloud solutions enable CIOs to prepare their enterprises to quickly adapt to changing market conditions. Besides, the cloud has enabled multiple offerings in the form of SaaS, PaaS, and IaaS, which have improved productivity and business agility.

4. Cost Efficiency

CIOs tout cost efficiency as one of the main reasons why they move their workloads and applications to the cloud. According to Gartner, cost reduction is in the range of 15-20% of service costs – with the highest savings reaching over 25%. As such, CIOs can leverage the cloud for sharing IT services across multiple business units to improve their economies of scale.

Why CIOs Do Not Love the Cloud

Despite all their benefits, moving to the cloud is not without its share of challenges for CIOs. Without a well-thought-out implementation strategy, the cloud can pose serious complications for organizations.

To that end, here are some of the reasons why CIOs do not love the cloud:

1. Cost Escalation

Cloud-related implementation costs can spiral out of control without proper groundwork and management. According to Gartner, 60% of operations leaders have reported significant cost overruns with cloud implementation. Some of the common errors that result in cloud cost escalation include:

2. Cloud Management Complexity

This 2022 Global CIO Report reveals that nearly 75% of CIOs are overwhelmed by the growing cloud complexity caused by the data explosion. According to enterprise CIOs, IT teams are using, on average, 10 tools to monitor their cloud technologies – but have improved observability in just 9% of their IT environment.

In fact, in complex multi-cloud environments, CIOs are reporting cloud management challenges associated with:

3. Data Security

Despite all the advancements, cloud security remains a major concern for CIOs. Since the 2020 pandemic, 63% of cybersecurity professionals have reported an increase in external threats. With the emergence of BYOD, organizations are facing constant security challenges.

In multi-tenant or public cloud environments, user negligence is a major driving force for a successful cyberattack. To protect their sensitive data, more CIOs are implementing “zero-trust” security models with their additional security protocols.

4. Shortage of Cloud Technology Skills

Skill shortages continue to plague enterprises and CIOs in 2023. An S&P Global survey found that 29% of enterprises are spending their IT budget on hiring purposes. Another 22% of the money is being spent on upskilling and employee engagement.

Employers are struggling to fill positions related to a variety of skills, including:

The Way Forward

Going forward, more organizations will adopt cloud technologies or move to the cloud platform. This makes the CIO’s job even more crucial for business transformation. This is why they need a trusted technology partner to design the right cloud solutions and strategies.

i-Source Infosystems has been a trusted business and IT transformation partner for a host of companies across different industries. With our cloud transformation offering, we empower our clients with services, including: