Top 10 cloud challenges, and how this varies between Enterprises and small to medium businesses

Taylan Aydinli, Information Technology Consultant

The cloud offers incredible opportunities, making it easy for businesses of all sizes to drive business returns, grow revenue, and unlock efficiency and capability gains. However, managing, scaling, and fully realizing its potential presents a significant challenge. This challenge varies between large enterprises and small to medium-sized enterprises (SMEs). While enterprises have substantial budgets and capable teams, SMEs possess agility and a culture of adaptability and innovation. Let’s dive into the specific challenges faced by each group.

Challenge 1: Strategic Focus – Ensuring business outcome clarity in every technology investment

Technology is easy to buy, but hard to leverage. Technology can be readily acquired, but effectively harnessing its potential can be a daunting task. Much like the multitude of unused features on a mobile phone, cloud capability is the same. It is crucial to define clear business objectives before venturing into a cloud transformation. Engaging in discussions with Portera’s cloud consultants to formulate a robust business case can provide invaluable guidance in this endeavor.

Challenge 2: Cost Management – Vital for Enterprises and SMEs

Managing expenses emerges as a paramount hurdle for organizations of all sizes. This holds equal significance for both large enterprises and SMEs. The pivotal factor lies in attaining clear visibility on costs. Employing tools like Portera redLine for comprehensive cloud cost tracking can prove instrumental in effectively navigating this challenge.

Challenge 3: Security Concerns – Enterprises leading the charge, SMEs on notice

The subsequent crucial challenge where Enterprises succeed over SMEs, relates to security. Enterprises, given their larger scale, tend to approach risks with greater caution, recognizing the potentially more significant consequences at stake. This heightened security concern in enterprises may result in increased investments in security measures and protocols. Conversely, SMEs also face notable security risks, but they often rely on external services to manage and mitigate these risks, which, paradoxically, can introduce vulnerabilities. This reliance on external services underscores the need for robust vetting and oversight to maintain a secure operating environment.

Challenge 4: Resource and expertise dynamics – contrasting perspectives in SMEs, emphasising technology integration

Interestingly, SMEs do not consider expertise as their top challenge, revealing a paradox. This brings to mind the famous adage, “the more I understand, the less I know.” However, there’s another underlying bias in this outcome. Enterprises often delay innovation due to the misconception that they lack the necessary expertise. In reality, this reluctance stems from a lack of a growth mindset often found in SMEs. While SMEs may not possess extensive expertise in cloud technology, they demonstrate a remarkable willingness to embrace risks and pursue growth. Enterprises can benefit from adopting this forward-thinking mindset, recognizing that embracing new technologies is integral to sustained progress and success.

Challenge 5: License management struggles – A shared challenge in both sectors, highlighting cloud computing

While managing licensing ranks slightly lower on the list of challenges, it remains a prevalent concern. This is largely due to the complex and opaque nature of cost management. The allocation of cloud costs through subscriptions raises questions about who should have access to specific resources. Moreover, the issue of costs spiraling out of control is a genuine worry for many organizations. To address this, several strategies can be employed:

Optimize Resource Usage:

  1. Regularly monitor and fine-tune cloud resources to eliminate inefficiencies. Leverage tools provided by your cloud provider or Portera redLine to identify and resize underutilized resources. Implement auto-scaling to dynamically adjust resources based on demand, ensuring you only pay for what is essential.
  2. Utilize reserved instances or savings plans: Commit to one or three-year terms with cloud providers to secure discounted rates on specific services. Reserved Instances (for AWS) or Savings Plans (for AWS, Azure, and Google Cloud) offer significant cost savings, especially for predictable workloads.
  3. Embrace Multi-Cloud or Hybrid Strategies: Optimize costs by selecting the most cost-effective services from different cloud providers. This approach provides flexibility, resilience, and helps avoid vendor lock-in. However, it’s crucial to ensure proper management to handle the inherent complexity of a multi-cloud or hybrid setup effectively. By implementing these strategies, organizations can navigate the challenges of managing licensing and optimize their cloud expenditure for sustainable and efficient operations.

Challenge 6: Migration hurdles – tackling the ‘big’ issue, especially in cloud integration

Migration poses a significant challenge, particularly for Enterprises. The prevalence of private-only cloud instances is relatively low, accounting for only 4% of total instances. Instead, the majority opt for a hybrid or public cloud approach. This trend primarily impacts Enterprises, with 71% expressing concerns about the migration process. To address this challenge, consider the following top tips:

  1. Comprehensive Planning: Conduct a thorough assessment of your existing infrastructure, applications, and data dependencies. Prioritize workloads for migration to streamline the process and ensure a smooth transition.
  2. Security and Compliance: Implement robust security measures and ensure compliance with industry regulations. This includes encrypting data, establishing access controls, and proactively monitoring for vulnerabilities to safeguard your systems and sensitive information.
  3. Optimize for Cloud-Native Technologies: Leverage cloud-native services to enhance scalability and efficiency. Embrace serverless computing, containerization, and other cloud-specific tools to fully capitalize on the benefits of the cloud environment and optimize your operations. By following these guidelines, organizations can navigate the complexities of migration and make the most of their cloud infrastructure.

Challenge 7: Balancing resourcing and internal dynamics – another ‘big’ problem

Balancing resourcing and internal dynamics proves to be a more prominent challenge for Enterprises compared to SMEs, with inter-departmental politics and competing agendas being more prevalent. To navigate this challenge, we advise you to consider the following tips:

  1. Get a North Star vision: Establish a clear and compelling vision that aligns all departments and stakeholders towards a common goal. This overarching vision serves as a guiding light for decision-making and resource allocation. If this sounds ‘fluffy’ it isn’t. It’s a critical step.
  2. Obtain a Senior advocate/sponsor with authority across the business: This advocate will champion the initiative, help resolve conflicts, and ensure alignment with business objectives.
  3. Build a joint business case – Focusing on top and bottom-line growth. Develop a comprehensive business case that highlights the benefits and value proposition of the initiative. Emphasize how it contributes to both top-line revenue growth and bottom-line cost efficiencies, demonstrating its holistic impact on the organization.
  4. Facilitate clear change management: Implement robust change management practices to guide the organization through the transition. This includes effective communication, stakeholder engagement, and providing the necessary support and resources to facilitate a smooth process.

Challenge 8: Multi-Cloud Management – high for enterprises

Multi-cloud management ranks as the second most pressing challenge for Enterprise organizations, which is expected given the complexity of their ecosystems. Common hurdles in this domain encompass:

  • Lack of visibility and control: Juggling resources across multiple cloud providers can lead to a dearth of centralized visibility and control. This gap can result in inefficiencies, security vulnerabilities, and escalated costs.
  • Interoperability and compatibility challenges: Each cloud provider boasts its unique set of services, APIs, and configurations. Ensuring seamless interoperability and compatibility between different cloud platforms can be a complex endeavor.
  • Data governance and compliance risks: Effectively managing data across multiple clouds can present compliance challenges, particularly when handling sensitive or regulated data. Maintaining consistent data governance practices becomes paramount.
  • Cost management and optimization: Exerting control over expenses in a multi-cloud environment can prove challenging due to disparate pricing models, billing structures, and resource management strategies.

To mitigate these challenges, consider the following recommendations:

  • Implement a comprehensive cloud management platform or tool that furnishes a unified dashboard for monitoring, managing, and optimizing resources across various cloud environments. This affords a singular view, enhancing control and visibility.
  • Prioritize cloud-agnostic solutions and architectures. Leverage standardized APIs and adopt technologies like containers and Kubernetes to abstract away cloud-specific differences. This fosters portability and diminishes dependency on any single cloud provider.
  • Institute a robust data governance framework spanning all cloud environments. Employ encryption, access controls, and data classification to maintain compliance. Leverage tools that offer visibility into data usage and enforce compliance policies.
  • Make use of cost management tools and services such as Portera redLine. Implement tagging and resource allocation strategies to accurately track and allocate costs. Continuously monitor resource usage and optimize configurations to avert unnecessary expenses.
  • By addressing these common multi-cloud management issues with the recommended strategies, organizations can adeptly navigate the complexities of managing resources across multiple cloud environments, while capitalizing on the benefits of a multi-cloud strategy. This approach empowers enterprises to harness the full potential of their cloud infrastructure.

Challenge 9: Governance, and Challenge 10: Compliance

Both governance and compliance challenges are equally experienced by both Enterprises and SMEs. However, for SMEs, compliance ranks among the top three most common issues. The agile nature of innovation in SMEs can introduce compliance risks across the business, potentially leading to this elevated concern. It’s worth considering whether there may be some framing bias or overlap with other issues related to SME information management and technology. Regardless, it remains a fundamental truth that robust governance and compliance procedures must always be established and followed to ensure the smooth operation of any organization, regardless of its size. This foundational step is crucial for maintaining trust, integrity, and legal adherence within the business environment.

Knowing when to seek external expertise

External expertise should be sought in two key situations. First, when faced with challenges that seem insurmountable, it’s essential to bring in specialized knowledge and experience to navigate the complexities and find effective solutions. Second, when there is a lack of anticipated business returns, external experts can provide fresh perspectives, identify areas for improvement, and implement strategies to enhance profitability and overall performance. In both cases, tapping into external expertise can be a strategic move to bolster the organization’s capabilities and drive success.