In today’s fast-paced digital landscape, the cloud has emerged as a cornerstone of modern business infrastructure, offering unparalleled scalability, agility, and cost-efficiency. As organizations increasingly migrate to the cloud, however, CIOs face the daunting challenge of navigating a complex and rapidly evolving cloud ecosystem. With the AI revolution underway — which has kicked the wave of digital transformation into high gear — it is imperative for enterprises to have their cloud infrastructure built on firm foundations that can enable them to scale AI/ML solutions effectively and efficiently. Otherwise, companies will struggle to realize business value with AI/ML capabilities left to endure high cloud cost expenses, as it has been for many companies in 2024 for AI solutions.
Enterprises can optimize their cloud strategies by following a five-phase approach that ensures a thorough and systematic process for cloud adoption and utilization. This guide will walk you through the steps of formulating a robust cloud strategy, establishing a strong technical framework, creating a detailed migration plan, setting up a financial model, and finally optimizing cloud usage through a culture of financial operations (FinOps). This structure is designed to help organizations achieve cloud success and drive significant business value from their cloud investments.
1. CRAWL: Formulate a Solid Cloud Strategy and Approach Modernization with the Right Mindset
Modern businesses must be extremely agile in their ability to respond quickly to rapidly changing markets, events, subscription-based economies, and ‘excellent experience’ demanding customers to grow and sustain in the ever-ruthless competitive world of consumerism. The ability of cloud infrastructure to adapt, scale, and be malleable to meet business needs right where they are and then enable them to expand makes it the default choice. With the advent of growing AI adoption, a strong cloud foundation pillar is a prerequisite.
For a successful cloud strategy, businesses must evaluate their current needs and challenges, define their “Northstar” vision, and set clear business principles. This includes understanding the ‘what’: identifying the goals and vision that the business aims to achieve with cloud adoption. The ‘why’ clarifies the purpose behind the cloud move, such as faster service delivery, increased revenue, market expansion, improved service quality, and cost control. A multi-cloud strategy is advisable for enterprises with a global footprint to prevent vendor lock-in, ensure business flexibility, and navigate regional security or compliance constraints.
Evaluating the overall IT landscape through the lens of enterprise architecture (EA) and assessing IT applications via a 7R framework (rehost, replatform, replace, refactor, rearchitect, retire, retain) helps map technology needs to business objectives. This comprehensive assessment bridges business and IT goals, promoting effective cloud transformation. All major cloud providers, including AWS, Google, Microsoft Azure, and Oracle Cloud, are well-equipped to address enterprise needs.
2. WALK: Set Up a Strong Cloud Technical Framework and Governance Model
After finalizing the cloud provider, it’s crucial for businesses to establish a robust cloud technical framework and governance model before diving into cloud deployment. Many companies start without a comprehensive plan, leading to overwhelming management issues. Well-architected frameworks, offered by all major cloud providers, address this by guiding customers in building environments aligned with operational excellence, security, cost optimization, reliability, performance efficiency, and sustainability.
Implementing these frameworks facilitates the execution of financial controls (FinOps), workload management (BaseOps), and security controls (SecOps). At this stage, setting up a cloud Center of Excellence (CoE) practice is advisable. This team, consisting of cloud engineers, architects, and the DevSecOps community, customizes a well-architected framework to meet the company’s needs, establishing a standard artifact that drives cloud adoption and promotes a cost-effective mindset.
Creating a governance policy to support this framework is essential. This includes defining landing zones, VPN and gateway connections, network and storage policies, hosting key services within a private subnet, and configuring the right IAM policies. The CoE team must engage with enterprise users, collect feedback, and adjust policies as necessary. Partnering with the enterprise architecture team further solidifies the cloud foundation, fostering a productive collaboration that aligns reference architecture patterns with solution designs.
3. WALK FASTER: Create Cloud Adoption Planning and Migration Roadmap
With the CoE and EA teams working in tandem, it’s time to engage business stakeholders and develop a detailed cloud adoption and migration roadmap. This involves understanding business constraints and priorities and identifying domains with opportunities for growth and revenue expansion upon moving to the cloud. A structured approach is essential for this phase.
Assessing application architecture is the first step, identifying components that can be lifted and shifted to the cloud and those that require re-architecture for optimization. The AWS Cloud Adoption Framework (CAF) is a useful tool for evaluating cloud readiness. The next step involves identifying the right migration strategies and tools. The 7Rs of cloud migration (relocate, rehost, replatform, refactor, repurchase, retire) guide this process based on the state of each workload.
Meticulous planning and execution of the migration process are critical to success. This includes selecting suitable migration strategies and tools, ensuring minimal disruption, and executing the migration precisely. Application modernization may involve refactoring or re-architecting existing applications to take advantage of cloud-native services. Leveraging best practices for a smooth transition, compliance, and adopting a phased approach with the support of cloud partners is recommended. Investment in training and change management is crucial for success.
4. RUN: Configure and Establish a Strong Cloud Financial Model
Establishing a strong cloud financial model is pivotal to realizing the full potential of cloud benefits. The cloud CoE must partner with the finance team to design an organizational structure within the cloud that aligns with the company’s financial reporting setup. Explaining the ‘Pay as you go’ model and its blind spots is crucial, as the cost structure shifts from capex to opex from a portfolio management perspective. This phase involves proactive engagement with all stakeholders, guiding them through the transition with training, coffee chats, and CoE sessions.
Key components of a comprehensive cloud financial management strategy include cloud cost visibility, cost insights, cost governance, defining a cloud baseline infrastructure, and vendor management. This involves establishing robust processes and tools to gain visibility into cloud costs, extracting meaningful insights from the data, and setting up a baseline infrastructure that serves as a ballpark estimate for financial modeling. Developing a baseline infrastructure for compute, storage, database, data transfer, application monitoring, and logging services is essential for all requests.
Governance processes empower the CoE to engage stakeholders needing more than the baseline infrastructure, requiring them to justify their needs before approval. This rule of engagement builds a strong FinOps culture within IT and business teams preemptively, avoiding post-go-live expensive cloud bills. Major cost drivers include compute, storage, database, application monitoring, and logging services, which often account for 75% of the cloud bill. Effective management and optimization of these components prevent costs from spiraling out of control.
5. RUN FASTER: Enhance Enterprise Cloud Usage and Optimization Through a Strong FinOps Culture
After selecting a cloud provider, it’s essential for businesses to establish a strong cloud technical framework and governance model before starting any cloud deployment. Many companies begin without thorough planning, leading to significant management challenges. Major cloud providers offer well-architected frameworks to guide customers in building environments that prioritize operational excellence, security, cost optimization, reliability, performance efficiency, and sustainability.
Using these frameworks helps implement financial controls (FinOps), workload management (BaseOps), and security controls (SecOps). At this point, setting up a cloud Center of Excellence (CoE) is recommended. This team, which includes cloud engineers, architects, and the DevSecOps community, tailors a well-architected framework to the company’s specific needs, creating a standard artifact that drives cloud adoption and promotes a cost-effective mindset.
It is crucial to create a governance policy to support this framework. This policy should define landing zones, VPN and gateway connections, network and storage policies, key services within a private subnet, and appropriate IAM policies. The CoE team needs to work with enterprise users, gather feedback, and adjust policies as needed. Collaborating with the enterprise architecture team enhances the cloud foundation and promotes a seamless alignment of reference architecture patterns with solution designs.