satellite view of clouds covering planet Earth
PHOTO: NASA

To stay relevant in today's world of instant customer satisfaction and growing competition from tech-savvy upstarts, more and more established enterprises are fully embracing cloud technologies. Almost 60% of large organizations in our latest survey of IT decision-makers, for example, stated that migrating key applications and services to the cloud is their top IT priority in 2019.

However, much of the discussion about cloud services remains focused on the needs of less-mature organizations and on technical rather than business considerations. Debate concentrates on whether to move to the cloud, which workloads are best to "lift and shift" from a cost, security and compliance perspective, or how to avoid supplier lock in, currently one of the biggest concerns when moving to the cloud.

Demand for multi- and hybrid-cloud services, as well as open-source technologies such as Kubernetes containers, has increased over the past 12 months as a result. With over half of enterprises now using more than one public cloud provider, multi- and hybrid-cloud technologies help developers spin up infrastructure for new applications or lift-and-shift projects while maintaining consistency and portability across their on-premises IT, multiple public clouds and at the network edge. Another effect is IT departments can now choose suppliers far more flexibly, often one workload at time.

As positive as these trends have been, they reflect the immaturity of the cloud services market: Less than 20% of enterprise workloads have actually migrated to the cloud and many customers early in their cloud journeys remain cautious in their approaches to the major suppliers.

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Mature Firms Take a Wider View of Cloud Opportunities

A fascinating trend is occurring at the other end of the market, in mature organizations. Firms with years of experience in the cloud are starting to widen their supplier selection criteria beyond specific lift-and-shift or technical considerations, and are gravitating to a preferred supplier that best supports their business goals and enables change in their organizations.

These firms are looking beyond simply selecting the most apt and cost-effective technology to support a specific IT project. Instead they're hoping to build a longer-term relationship that can increase their agility, reinvent or automate their business processes, and above all, accelerate innovation in their business. Requirements can span the customer experience and marketing elements — the focus of many early cloud projects — but also the supply chain and increasingly the workplace, to improve corporate culture and foster new ways of working.

A good example is Telegraph Media Group in the UK. The publishers of the 160-year-old Daily Telegraph newspaper first engaged with cloud services back in 2008 as a way to enhance workplace productivity and collaboration. In February 2019, the firm migrated the vast majority of its technology estate to Google Cloud. Telegraph Media Group CIO Chris Taylor stated when announcing the move:

"The Telegraph was a super early mover in cloud computing. As a publisher, our relationships are deep and varied but we don't want a fragmented ecosystem here .... One of my principles is to have fewer, better and deeper partnerships."

The publisher believes that by running operations in a single cloud, it can deliver content faster, provide a better experience for its readers and reduce its environmental footprint. For these early adopters, selecting a cloud provider is now a longer-term, strategic and above all, business-led decision.

Related Article: Moving to the Cloud, One Process at a Time, With Hybrid Clouds

Analytics and AI as Competitive Advantages

Nowhere is this more evident than in the growing number of firms starting to prioritize data and artificial intelligence (AI) in their business strategy. According to our survey of IT decision-makers in 2018, two-thirds of enterprises are either researching, testing or using AI in their organizations. Respondents to our survey estimated that as much as 30% of their business applications would be enhanced with machine learning within the next two years.

Collecting, analyzing and drawing insights from data is becoming one of the most important sources of competitive advantage. Many organizations with established cloud operations, like the Telegraph, which is using AI to predict sales and classify and personalize content, are some of the early adopters of AI for this purpose. The technology was one of the elements that justified its deeper relationship with Google.

Related Article: Google Cloud Ups Its Enterprise AI Game

How and Which Cloud Provider to Choose?

Whatever level of maturity your organization is in its cloud journey, selecting the right cloud provider for your business is not easy. Costs, service-level agreements, migration support, reliability, road maps and certifications all weigh as heavily today as they have over the past several years. But recent trends reveal some additional new areas to consider when picking a supplier:

Open source. Open-source technologies, and microservices and Kubernetes containers in particular, have become crucial aspects of cloud-native software development. Demand from enterprises has forced cloud providers to compete on their ability to build, integrate and support these technologies and offer managed services for them.

Data analytics and AI. As they begin to experiment with machine learning at an impressive rate, enterprises are now considering the data analytics and AI service portfolios of cloud providers as part of their strategies. More firms will implement AI in their business processes in the coming years. Alongside deeper relationships, they will need industry and business process expertise from their suppliers in order to be successful.

Security and trust. After a year of several high-profile cyberattacks, the Cambridge Analytica scandal and growing public distrust of big tech firms, data security, compliance and trust in the cloud and its suppliers have become paramount. Enterprises must now not only trust their provider's technology but trust their business model and practices as well. Trust is as important today in long-term technology relationships as product innovation or developer ecosystems have been in the past.

Partnership model. Perhaps above all, more and more customers are looking for a long-term partner for innovation. Cloud providers that offer a unique technical experience but also co-create and provide guidance on innovation culture and change management are becoming more attractive. Engineering skills and engagement are also highly valued to improve agility, speed up product release cycles and embed DevOps practices into business processes.

Related Article: What Ignite 2018 Signaled for Microsoft and the Future of the Cloud Wars

Further Considerations for Mature Organizations

A growing number of organizations see the cloud as not only a technical platform, but also a fulcrum for organizational change, corporate strategy and some of the most important business and technology shifts in a generation. For those contemplating a strategic relationship with a preferred cloud provider, here are a few things to consider:

Assess providers against business needs. This sounds obvious, but clarifying your business goals in advance allows you to assess cloud providers not solely on technology, use case and against each other, but against your business strategy.

Look for data and AI expertise. Machine learning and, more broadly, AI have become the tech industry's most important trends over the past 18 months. Firms that best prioritize collecting, analyzing and gaining insights from their data will acquire the biggest source of competitive advantage over the next five years. It is therefore vital to consider a cloud provider with the widest experience, technology portfolio and services in these areas.

A trusted brand. For CEOs implementing widescale business change and transformation programs, choosing a trusted brand recognized by employees as fresh, innovative and customer-focused can help reinforce the strategy and promote a message of positive change across the entire company.

The cloud will no doubt continue to evolve over the next few years as more firms gain maturity and fully embrace it to support business innovation and change. There is much in store for businesses that select the right preferred cloud provider to enable these goals as well. The next 12 months will see some fascinating changes in this direction as the major cloud providers battle it out for supremacy in this crucial arena.