Reiterating the case for cloud
It’s been approximately ten years since the first major public cloud platform, Amazon Web Services (AWS) hit the market. Despite the widespread adoption and popularity of cloud computing over the past decade, I am surprised to note that many ISVs have yet to migrate their applications for various reasons. To reiterate, ISVs must consider cloud adoption to realize the following benefits:
- Recurring revenues from a subscription model, which are far more attractive and valued by financial markets than licensing revenue
- Deliver better end-user experience
- Reduced infrastructure and application maintenance costs due to shared infrastructure, yielding significant lowering of Total Cost of Ownership (TCO)
- Achieve enhanced scalability, flexibility, and anywhere access through cloud-based deployment & infrastructure
- Scope for mass customization
- Ability to deliver flexible components as opposed to monolithic applications
Drawing from my extensive insights in dealing exclusively with ISVs, I would like to share some key, strategic considerations for successful migration of applications to cloud.
Establish clear business goals
It is very important for ISVs to have clearly identified business goals from the cloud adoption, as they will be critical for driving the migration strategy and roadmap. Sometimes it could also be the case that, even if you are an established player delivering a fabulous service through a conventional software application, a nimble-footed cloud-first competitor could be disrupting the market, forcing your hand.
Assess the landscape
Moving to cloud will have a transformative impact on all aspects of your business as an ISV. Even before you target a ‘To-be’ state, you must undertake a thorough assessment to paint an ‘As-Is’ state of the application, technology, people, and processes across the organization. There are multiple ‘cloud-readiness’ frameworks that one can use to perform an application and organizational assessment. As moving to a subscription model will have a disruptive impact on even the professional services and sales organizations of the ISV, it is important to capture their status also as part of the assessment exercise.
Formulate Cloud migration strategy and roadmap
After assessing the current application and technology stack, and based on the targeted business goals, formulate an appropriate migration strategy by identifying which applications/components will be migrated, in which timelines. If you are an established ISV with an enterprise-class application, I would strongly advise to adopt a phased, and incremental approach for cloud migration, to minimize the impact for existing customers. Based on the data needs of the application as well as other critical factors such as resource utilization, security, control, and TCO, you must also choose the right cloud platform and opt for either a public, private, or hybrid model. Public cloud is the most cost-effective option, if you have a SaaS ready application, and if your infrastructure needs are incremental. On the other hand, even though more expensive than public cloud, a private cloud is a better option, if security and control are paramount. Hybrid cloud, which is a mix of public and private models is becoming increasingly popular as it offers the flexibility of using different options to deliver different services.
Identify and bridge the skill and resource gap
Migrating to a cloud environment and building cloud-first application needs a strong team with the requisite skills in terms of technology, architecture, data migration and expertise in cloud migration services. If you lack the needed skills in-house, and time is a constraint, then choose a partner who is experienced in cloud migration, to help you bridge the skills and resource gap.
Opt for a phased migration
If you have a large legacy application which is not easy to migrate, as a first step start with a hosted deployment model. This entails delivering a single instance (single-tenant model) of the application through a virtual desktop either through local hosting or through a managed service provider. This approach will enable you to take care of the customer needs in terms of infrastructure, maintenance, support and upgradation. In some ways, this is a low-hanging fruit that can be easily targeted by most ISVs, before undertaking the more arduous task of application migration.
Adopt cloud architecture
The next step is to undertake re-factoring or re-engineering of the application architecture to offer it as a service, which must include the following essential features:
- Service and API based architecture
- Extensible data model with security
- Support for multi-tenancy
- Flexible configuration
Ability to integrate with industry-standard cloud platforms and consume third-party services that can extend the functionality of the core product, is also becoming a key differentiator in market driven by a platform ecosystem.
Choose the right hosting environment
Irrespective of whether you migrate or build a cloud-first application, you will still need the right cloud infrastructure to offer it as a service, which must provide the following essential features:
- Scalability and flexibility (both vertical and horizontal)
- Support for global deployment
- Single-click delivery
- Capability to capture usage and billing data
- Data redundancy and backup
There are multiple providers with a global reach offering a sophisticated array of publci cloud services for enterprises to choose from, such as Google, AWS, and Azure. Often, the customer needs could also compel the ISV to use multiple cloud platforms to ensure redundancy, scalability, and enhanced availability.
As the experience of the past decade has proven, through cloud adoption, ISVs can deliver significant value to the customer by lowering their TCO, and at the same time also generate a continuous stream of revenue through a subscription-based SaaS model.