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Seven considerations for your Cloud Operating Model

Whether you’re in the cloud or on-premise, you will have an Operating Model in place that defines how technology supports your business – but when was it last updated? In 2020, 87 per cent of CEOs expected their operating models to change in the three years that followed as they delved deeper into the world of digital transformation. But the importance of updating it promptly can often be overlooked, which will only hinder your ability to achieve long-term technology operation success.

For those that have already migrated their servers to the cloud, has that change been reflected in your operating model? And for the businesses that are looking to migrate in 2024, what considerations should be made when adopting a Cloud Operating Model?

What is a Cloud Operating Model?

Microsoft defines a Cloud Operating Model as ‘the collection of processes and procedures that define how you want to operate technology in the cloud.’ After detailing your Cloud Strategy, the Cloud Operating Model will provide a high-level representation of how your business will deliver on that strategy, breaking each section down into individual methodologies.

Operating Models have been around for decades as teams have always had to define how technology would support their business. However, while some processes may remain relevant from your legacy Operating Model when you migrate to the cloud, many will change and impact the way your IT team operates.

What you should consider

When migrating to the cloud, it’s important to consider the processes you currently have in place and how they will change once you’ve migrated. There’s a lot to look at, and potentially a lot of changes to make in order to ensure successful long-term cloud adoption, so our team has been busy identifying the seven key considerations you should be making when building a Cloud Operating Model.

People

When you’re in the cloud, the skills your IT team needs will change dramatically. Gone are the days that required boots on the ground to physically maintain and manage your on-premise infrastructure. Instead, your team will need to be adept at monitoring a cloud environment, either themselves or with the support of a Cloud Provider, and will need to want to work with cutting edge technology to drive business innovation. The benefit of hiring the best cloud talent is that often you can upskill the resource and reallocate to different functions to drive competitive advantage and ultimately improve business performance, increase revenue, enhance customer experience – but your current team should not be overlooked, and upskilling and training programmes should be considered.

Technology

When transitioning to an Operating Model that’s geared up to support your cloud environment, it’s important that you consider how your tools and technology will change, along with how you support that. This can be broken down into three key areas:

  • Infrastructure: When you’re on-premise, your infrastructure is restrictive and inflexible. Network connectivity is configured traditionally and reporting and analytics are limited. When you move to cloud you will benefit from an increase in the number of compute nodes as they can be spun up almost instantly, and in vast quantities. This provides a more dynamic environment, but requires more consistent oversight to ensure that you are extracting the maximum ROI from your technology.
  • Physical servers: In the cloud you’ll need to adopt virtual machines, and more of them than you had physical servers. You’ll have to ensure you have new processes for people and technology to keep track of these.
  • Analytics: On-premise offers limited analytics solutions and therefore limited insights. In the cloud, you’ll be able to gain more business insights from its wealth of analytics capabilities, but in turn you will need a add deeper analytical skills and expertise to your team.

Processes

Your full list of business processes is likely innumerable, making it one of the biggest areas of consideration when adopting a Cloud Operating Model. Moving to a cloud environment will impact on areas of your business that you may not have thought would be changed, so make sure you consider each of the following.

  • Procurement: Not only will never products and services you procure need to be compatible with the cloud, you will also need to begin procuring suppliers and providers in new areas – starting with a Cloud Vendor, who will help your business make a smooth, seamless transition to the cloud.
  • Problem management: On-premise problem management is a very hands-on process with lots of patching, troubleshooting and hardware replacement. However, when you’re in the cloud, there’s a greater focus on solving connectivity, availability, and configuration – your cloud provider will resolve any infrastructure problems.
  • Ticket management: This will change from a manual tracking of issues with communication from the IT department to streamlined, automated systems that can be quickly escalated to the relevant teams, decreasing resolution times and reducing the impact of disruptions.
  • Identity management: The way in which your team accesses its servers will change drastically to ensure your data remains safe and secure. You’ll need more than a key to gain access, so your Cloud Operating Model should include considerations like multi-factor authentication and trusted networks.
  • Change management: This becomes a much more dynamic process in the cloud as your provider will assist with any updates or upgrades. It will Minimise disruption to users, and allow you to allocate some resources elsewhere.
  • Data sovereignty: When you’re managing on-premise datacentres, you are fully responsible for that. In the cloud that changes to a shared responsibility between your business and your Cloud Provider, meaning your Compliance team would need to adapt your approach to continue adhering to regulations.
  • Backup & Data Recovery: In an on-premise world, you would have had to invest quite a lot of time, effort and money in backups for datacentre upgrades, repairs, and maintenance. In the cloud, this is all automated at a much lower cost and allows for data recovery from a wide range of locations. Giving you peace of mind.

Finance

Your finances and how you manage them will change considerably when your business is in the cloud, so be prepared.

CapEx to OpEx: The biggest change will be moving away from Capital Expenditure (CapEx), where you spend a lot upfront on hardware with potentially significant Operational Expenditure (OpEx)on maintenance, which leads to an inflexible financial strategy. When in the cloud you prioritise OpEx spending, which can be scaled efficiently and spread over many financial periods, with fewer areas of spend – the Cloud Provider covers maintenance and other costs. However, we recommend that this is paired with a FinOps strategy to ensure investments are managed effectively, and the financial benefits of cloud are fully realised.

Operational expenditure drops: When in the cloud, you will notice that your operational costs will drop significantly. These costs are baked into the cloud pricing and the responsibility of these tasks are performed by your cloud vendor, giving you greater flexibility to reinvest any leftover budget.

Moving to a Cloud Operating Model will enable you to ultimately move from an inflexible financial strategy to an agile one, so it’s a great time to factor in how you can use that to your advantage and invest in innovation.

Security and Governance

When you shift to the cloud, the parameters in which attackers can target increase as you move from needing physical access to attack to digital. With this in mind, it’s advisable to adopt a Zero Trust approach. This requires a change in mindset – instead of assuming everything behind your firewall is safe, you should assume breach and verify each request as it comes from an open network. Zero Trust encourages you “never trust, always verify”, meaning cyberattacks don’t slip through the gaps. With a Zero Trust approach, there will be more of a focus on identity management, and while this can be quite a large configuration task as part of your migration, there are plenty of tools that come with your Azure platform from Microsoft, ready for you to adopt in order to follow a Zero Trust approach.

Timescale

It’s no secret that the cloud improves business and IT agility by speeding up processes. Slow timescales and mundane processes will be a thing of the past once you have shifted your Operating Model to the cloud, but be sure to consider the following process changes.

  • Instant access to adopting new IT: The beauty of the cloud is the being able to adopt new technologies almost instantly, allowing your teams to start innovating quicker than ever before.
  • Maintenance updates: There’s no longer the need for an internal IT team to manually maintain and update your infrastructure. When you move to cloud, your infrastructure will be maintained by your Cloud Vendor, which results in quicker updates due to their expertise and the scale at which they operate.
  • Development cycles: When you’re in the cloud you can adopt tools to help you move away from traditional development methods to DevOps. This allows you to efficiently respond to customer needs and build applications quicker than ever before.
  • Hardware refresh: On-premise hardware refresh cycles often end up being long and drawn-out processes that happen every few years, which are often locked in as soon as the decision is made. When your Operating Model is in the cloud you will have a near-constant view on various metrics that will dictate what scaling and flexibility is required, allowing you to optimise your cloud environment and maximise your investment.

Strategy

Finally, your Cloud Strategy is what brings everything together to integrate it with your wider business strategy, rather than having separate and often conflicting approaches. While the IT team is largely responsible for managing your cloud environment, it’s a business decision to migrate to cloud and therefore should be part of a strategic business strategy and way of working. The IT Team will move away from focusing on just keeping the lights on, to leveraging the latest technology to drive business optimisation and innovation.

Looking to shift to a Cloud Operating Model?

Are you looking to adopt a Cloud Operating Model, but not sure where to start? These seven considerations will get you going in the right direction, but when it comes to migrating it’s important that you have a Managed Service Provider in place that takes time to help you understand your long-term strategic goals and align your Cloud Operating Model with the needs and requirements of your business.

Simply get in touch with our Azure experts to help you start your successful cloud migration.