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In my previous post in this series on the journey to cloud, I looked at the guiding principles that can help your organisation navigate its route. With those in place, the next step is to select your cloud service providers. I’ve made that the focus of this latest post.

When adopting cloud, it’s important to understand the pivotal role that a clear cloud-provider strategy can play for your organisation. It should not only give your technology teams the clarity they need but should also make conversations with regulators more straightforward. What’s more, it can support your organisation in keeping control of cloud costs. With all of this in mind, I’d like to share a few thoughts on the factors that should be considered when selecting your cloud provider.

First, understand your estate

As with any service procurement process, knowing what you want from your cloud provider before you engage them means you’re much more likely to get what you need. Therefore, assessing and specifying your requirements is the first step in selecting the right provider or providers to fulfil them.

The needs you identify should span both functional and non-functional domains and include – but not necessarily be limited to – your organisation’s security, reliability, performance, cost, operational and regulatory requirements. Critically, when defining these requirements, you should give careful consideration to their alignment with your organisation’s overarching business and technology strategies. Any oversights at this point could result in costly re-work or even project cancellations.

Factors to consider when choosing your cloud vendor(s)

With the features and functionalities offered by cloud vendors evolving on a weekly basis, the differentiation between the various players is narrowing in some areas and expanding in others. As vendors’ offerings are constantly changing, selecting the right provider demands a clear set of criteria derived from your requirements as discussed earlier. In making your decision, we would suggest you consider several criteria. These include:

• Technical Capabilities: Can the vendor meet your organisation’s requirements? You should look at how much refactoring would be required to run your applications on the provider’s platform. This is particularly important in the case of specialised workloads such as high-performance compute and big data analytics.
• Ease of Integration: Have you considered ease of integration with the technologies you have in your estate, and the ease of migration of existing data sources? Have you also considered how well the cloud platform integrates and operates with future technologies on your roadmap? Perhaps one platform might offer out-of-the-box integration capabilities whereas another might require significant engineering effort – these factors should be considered when selecting your provider.
• Organisational Capability: It may seem obvious, but it’s not the smartest decision to roll out a technology that your organisation is unable to deliver or support. Yet we often see this mistake, especially in the area of service management. Consider choosing your cloud providers based on the skills within your organisation. Also, make sure you discuss workforce training options with your prospective cloud providers, as well as the support they can give to get your organisation up-to-speed.
• Security and Resilience: This again comes down to your organisation’s requirements – and you should make sure that the cloud services offered by the provider can meet these needs. For example, do the services match the availability requirements of your tier 1 applications? We find that having open conversations with your alliances and cloud providers – using your technology roadmap as the basis – often flushes out many of these issues.
• Regulation and Compliance: At the service level, what capabilities does the provider offer in terms of regulation and compliance management? Do the compliance management services integrate with your existing capabilities, such as your Security Operations Centre? Broader regulatory questions should also be considered, including operational risk, exit strategies and data residency. The key to success is open, transparent and regular communication with the regulator having oversight and control over outsourcing, operational risk, internal governance and ongoing risk management.
• Cost: Cloud offers an excellent opportunity to reduce costs and improve the management of technology finances – and the start of your cloud journey is perhaps “the” critical point. Drive a hard bargain with your cloud providers; the market is competitive and there is ample scope for lucrative commercial arrangements. However, be careful not to over-commit – we often see organisations signing large consumption-based deals in exchange for sizeable discounts, only to find they don’t need the volumes to which they committed. The key here is having a robust enterprise-level business case, underpinned by a migration and build plan that details the volumes and types of cloud services to be consumed.

A clear assessment across all these areas is vital if you’re to select the provider(s) with the best fit to your business and cloud strategy. It’s a mission-critical decision that you need to get right. Do so, and you can be well on your way to driving enduring business growth and value at speed and scale.

What’s next?

In the next post in this series, I’ll focus on getting the cloud operating model right across organisational design, capability model, governance and process design. Stay tuned. Should you have any comments to this blog or wanting to discuss your journey to cloud with me, please feel free to reach out to me directly. Looking forward to hearing from you.

I also would like to thank my colleagues Samuel Gunn and Orla Baker who have contributed to this blog.

To learn more, read “The Cloud Imperative for Banking” and  “Mainframe Modernization: The Benefits of Cloud in a Mainframe Environment“.