For many IT organizations, the path of least resistance to moving to the cloud involves re-hosting their existing applications on a cloud service. In fact, a new survey of 687 developers and application owners conducted by Technology Business Research (TBR) finds this trend, also known as Bring Your Own License (BYOL), is far more dominant than the development of new applications.
A decision to “replatform” an existing application brings with it immediate performance benefits. More often than not the application in question is running on legacy infrastructure that the organization would have to incur some capital expense to upgrade, and the cloud service is typically running the latest x86 server architecture. Even accounting for network latency, many existing applications run much faster on a public cloud, especially if they consist mainly of batch jobs.
From a business perspective, this approach is less disruptive than making a wholesale shift to a new software-as-a-service (SaaS) application. Add to that the additional flexibility IT organizations gain when running an application in the cloud, and it’s quickly becoming apparent that rather than having to justify running an application in the cloud many application owners now have to justify why an application should continue to run on premise.
TBR notes that from a managed services perspective most of these applications in the cloud end up being managed by the vendor. There's still an opportunity for IT service providers to help with the application migration and perhaps even manage the application, but vendors such as Oracle and SAP have made it clear they expect to provide the bulk of the managed services surrounding an application they host in the cloud.
The tradeoff, however, is that SAP and Oracle are pushing customers to standardize on a single instance of an application they manage. Many IT organizations have made a series of customizations to their applications over the years that they would prefer to keep in place, though. In that context, a third-party service provider that enables them to achieve that goal using hosting services that provide the operational benefits associated with cloud computing can still carry the day.
Focus on engagement
Regardless of the route businesses take to get there, it’s clear that BYOL is a stepping stone to a larger embrace of the cloud. There may be quite a bit of new application development taking place in the cloud, but it still takes time for those applications to make it into production. And, the simple truth is that many of them never will. In the meantime, most businesses are still relying on legacy applications to support their existing business processes.
In fact, the applications that IT organizations are developing for the most part are not intended to replace those “system of record” applications. Rather, they tend to be “systems of engagement” designed to augment those existing applications. Very few IT organizations see the need to develop their own ERP applications. Instead they're focusing their application development efforts on custom mobile applications designed to move the organization closer to the customer. Naturally, many of those organizations are looking to IT service providers to both build and manage those applications on their behalf.
Put it all together, and there’s clearly a lot of nuance surrounding cloud migrations. The challenge for IT service providers is figuring out what types and classes of applications are going to generate the biggest opportunities for them both now and, perhaps more importantly, well into the future.