Companies plan to increase their spending on cloud infrastructure but may be slowing down on taking a “cloud-first” approach. These are two of the conclusions outlined in the Enterprise Strategy Group’s (ESG) “2022 Technology Spending Intentions Report.”

According to ESG’s report, the number of companies that said moving applications and infrastructure to the public cloud was their top IT priority dropped significantly from 17% in 2021 to 11% in 2022. On the other hand, a Harvard Business Review survey reports that 67% of respondents said they plan to accelerate their company’s move to the cloud. These industry studies point to both an eagerness and hesitancy on how to move to a cloud infrastructure. 

The good news is there are alternatives to conducting costly, high-risk major cloud migration projects. One option for companies still new to cloud environments is to modernize legacy systems to a distributed architecture before jumping right to a cloud migration.

Lessons from the Biggest Industries That Still Rely on Mainframes

Enterprise organizations with high-volume transactions and sensitive data still run key operations on mainframes. Most bank and credit card transactions, for example, still operate on mainframe computers. These aren’t industries or organizations that lack IT expertise or consider cost a barrier to moving to the cloud. They continue to run these transactions on mainframes by choice for the security and ability to process large volumes of transactions accurately and consistently. 

The FinTech industry turns to the cloud when, where, and how it wants to innovate. The FinTech disruptors, like apps that offer fractional trading, are technology-first companies. They’re built using cloud infrastructure and technologies. Financial institutions also use cloud computing for tasks like fraud detection and providing mobile banking services that customers demand in today’s digital age.

Smaller organizations can learn from these enterprises. They store their most sensitive data, like financial and customer information, where they have the most control over security and access. When speed and advanced data analytics are needed, that functionality is moved to a cloud infrastructure that supports more advanced technologies.

Budget and Expertise Limitations Inhibit Cloud Migration

Unlike large enterprise organizations, small and medium businesses (SMBs) have limitations on budget and in-house expertise. Thus, SMBs typically move to the cloud using a public or hybrid cloud architecture. These cloud infrastructures are preferable for SMBs because cloud vendors generally provide some support, and SMBs can also engage a cloud services management firm to oversee their total cloud environment.

Yet, their cloud skills gap, especially for non-tech-first companies, increases SMBs’ reliance on these cloud vendors and external cloud management services, which may make companies uncomfortable. The scope of shared responsibilities is often unclear in the cloud contracts making non-tech-first companies especially vulnerable as they don’t have in-house access to the necessary cloud skills, particularly in data and network security and cloud network management. Additionally, cloud vendor pricing is opaque. According to the ESG report, only 35% of surveyed respondents gave their public cloud infrastructure providers a good rating for meeting or surpassing expectations on cost, while 53% rated them as adequate.

Building and managing a cloud infrastructure are complex initiatives. While SMBs may not be expected to develop in-house expertise to build and manage these infrastructures, they do need to acquire sufficient in-house expertise to select and judge cloud providers before embarking on major migration projects.

Migrating Legacy Systems to Distributed Architecture 

An option other than jumping into a large cloud migration project exists for organizations that are considering migrating to a cloud environment. An initial move to distributed architecture is easier and more manageable for SMBs than going directly to the cloud. When deciding whether to use a distributed architecture as a first step, a key consideration is how large and complicated the existing legacy infrastructure is. The more complicated it is, the more complicated a direct-to-cloud migration will be.

Legacy mainframe systems have been built out progressively. They are often quite complicated, with numerous applications created over time and appended to the mainframe in an ad hoc manner. Furthermore, these mainframe applications are written in languages not taught to new engineers.

Taking a slow approach by using distributed systems as a weigh station between mainframe and cloud enables companies to execute small cloud migration projects on a case-by-case basis. They can prioritize cloud migration for business needs where cloud technologies can be a difference-maker, such as scaling up to advanced data analysis capabilities beyond what a data analytics team can do without sophisticated cloud technologies.

Controlled Migration to Cloud Infrastructure Requires the Right Vendor

While public cloud and hybrid cloud environments are the most popular, companies often still turn to the private cloud for their most sensitive data. Regardless of the cloud infrastructure selected, SMBs will need a cloud vendor and likely a cloud support management vendor.

As they decide to move pieces from a distributed system to the cloud, SMBs need to assess vendors to determine whose services and expertise align best to their most critical needs. Here are a few examples:

• Several companies prefer to migrate to an on-premises system provided by a vendor that also offers cloud services, such as Oracle or IBM. Staying with that same vendor offers continuity and lower risk for migrating their own systems. 
• Some cloud architecture vendors are stronger on speed than others. Strong speed is valuable for high data volume applications, such as those where users and customers want 24/7 access to the most current data and support. 
• If the business priority is advanced data analytics, such as using machine learning to generate predictive models, then the business should look for a cloud vendor that can provide the stronger cloud architecture required to handle the most sophisticated cloud-based technologies. For example, any service that can’t afford downtime or needs a unified platform that aggregates data from multiple sources to support customer touch points, including AI-driven communication channels, needs a cloud infrastructure with the bandwidth, computational power, storage, and flexible scalability that can handle that demand.

As businesses evaluate their current environment and priorities, they can map out a migration strategy that categorizes where and what the greatest benefits are for going direct to cloud and how turning to a distributed architecture is the more cost-efficient, low-risk option. This strategy map will help guide them through the cloud architecture and cloud services vendor selection process.

There’s No One Right Way to Migrate to a Cloud Infrastructure

According to Gartner, enterprises will spend more of their IT budget on public cloud computing than on traditional IT by 2025 in four key segments, including application and infrastructure software. As more companies move forward on their cloud journey, strategic modernizing of select systems will grow as a competitive advantage.

The tech-first companies, that tout their technology as their differentiator, are already native cloud users. Most companies aren’t tech-first. Using distributed systems as a migration bridge to a cloud infrastructure is a model for non-tech-first companies to modernize in a controlled manner, with time to assess their business needs and cloud infrastructure options and pathways.