Head in the Clouds - Fear of being locked in

There is a very real fear of migrating applications and data into the cloud and then being locked in to an underperforming or high priced vendor. If the vendor has many terabytes of your data, and the service is mission critical, the cost to break the contract and migrate to another provider may be considerable. As well, the potential impact to business operations during the transition can also be major. If the vendor does not perform or there is a serious security breach, the decision to migrate to cloud will be questioned.

While some enterprises have chosen to spread the risk by engaging numerous cloud providers, it is better to minimize the number of cloud service providers. Typically, an enterprise may limit itself to three or four major cloud service providers. Therefore, it’s very important that the enterprise chose these key cloud providers very carefully. The relationship needs to be approached less like a vendor relationship and more like a marriage.


In the past, some relationships with managed service providers were borderline adversarial. The relationship was mutually beneficial, but often with an underlying distrust; both sides seemingly trying to take advantage of the other. This simply will not work with a cloud vendor relationship. In many cases the relationship is simply service based – point and click. In other cases there may be large enterprise contracts with significant commitments on both sides based on consumption. Fundamentally the cloud service provider’s business model is usually less flexible than the managed services business model. In the cloud model, the enterprise gets to choose from the menu and it gets what it paid for. Therefore, selecting the vendor carefully, and (where possible) building deep relationships with the operations, delivery and the vendor’s product development teams is key.


The enterprise must have a suitably skilled Service Management team that can manage the vendor and that understands the end-to-end technical delivery architecture. This team needs to work very closely with the vendor not only to ensure that current operations and SLA requirements are met but also that the products and services are being developed and enhanced in line with the enterprise’s changing business and industry requirements. When an organization moves into the cloud, problems don’t disappear they simply change. An underperforming cloud provider is not too different from being locked in to an underperforming and high cost internal IT organization.


There are advantages dealing with cloud providers as there is a contract and SLAs. Though these SLAs may not be as stringent as internal IT SLAs. In some cases it is possible to switch providers, transition data and simply dial back services from one provider while dialing up services with another. Also, cloud providers are subject to market forces and if the enterprise is unhappy with cost and service, likely their other customers are too. It’s possible that the enterprise may actually have higher leverage with a cloud provider than it would with an internal IT service provider.


It is also vital that the internal service management team has the tools and automation necessary to monitor and manage a multi-cloud service delivery environment. Preventing cloud sprawl, overpayment for services not used or underutilized capacity is key. IT organizations need to manage the integration with legacy on premise infrastructure and the end to end delivery of cloud and legacy services traversing company networks.


Ultimately the goal is to create a consumable utility model from cloud infrastructure and services and view these services in the same way that we all view electricity services, telephone services or water and gas utilities. This requires mature vendors with robust infrastructures and a skilled and experience in house IT team to manage the service delivery and internal infrastructure. This enables the business and business IT to focus on the needs of customers and employees without worrying about the underpinning and enabling infrastructure.




Simon Morris is a Digital Transformation leader at KPMG.  When his head’s not in the clouds, he is riding his bike, carving turns on his snowboard, or helping his son build water cooled computers. He can be reached at simonmorris@kpmg.ca