The following is an excerpt from ALM Intelligence's newly released report, Cloud Consulting. For more information, visit www.consulting.almintel.com.
Cloud has become an indispensable element of the IT and services delivery model since ALM Intelligence last examined the cloud consulting market two years ago. There is increasing pressure on companies to provide quicker, more convenient, and more personalized services to the customer, while simultaneously simplifying the operating model and keeping costs at a minimum. To achieve this, companies are putting greater emphasis on capturing more data, performing predictive analytics, and taking quick action, which means they must be agile and flexible in how they run their business. Cloud enables companies to be more adaptable to both the demands of customers and the needs of employees, and also opens up opportunities for new business models. However, companies are faced with a saturation of available cloud services, which has led to those services being added in an ad-hoc manner over the past several years. This has left companies with a lack of visibility across the organization and an increase in risk stemming from cybersecurity vulnerabilities and compliance gaps. Additionally, there are gaps and redundancies in cloud services due to companies' lack of an articulated cloud strategy, as well as a void in internal capabilities to fully support cloud initiatives internally. To realize the full benefit of cloud, companies are engaging with consulting firms to develop a comprehensive cloud strategy that aligns with business strategy and lays the groundwork for processes and guidelines for securely managing and operating in the cloud or offering cloud services. Cost Savings, Efficiency, and Productivity Potential for cost reduction continues to be a huge driver of cloud initiatives. Early adopters mainly sought a more straightforward cost savings path with cloud, such as to reduce their footprint (e.g., data centers, hardware) and associated maintenance and operations costs. Companies still seek these cost-savings opportunities, but are now also taking a more sophisticated approach to cloud's cost-reduction potential. Cloud allows companies to align capacity to needs and only pay for what is required (e.g., storage, applications), which can promote cost savings, but also increase efficiency and productivity. Application needs can be customized by business units or on a smaller scale, providing employees access to services and tools not possible with an on-premises model. Additionally, there is a surge in cloud-based HR solutions and collaborative solutions designed to streamline daily and administrative activities, which improve productivity and generate a degree of savings when weighed against keeping internal processes and tools as they are.
Business Agility To keep pace with competitors traditional and nontraditional and bring customers the services and experiences they expect, companies are seeking ways to be more agile to react more quickly to changes in the market. To become a truly agile organization, processes, people, and technology need to be reviewed, and often large-scale overhauls are required. Cloud is a critical aspect of this transformation, as it enables companies to pursue new business models and services (e.g., traditional software versus cloud-based software); increases the capacity to process, analyze, and share information; and enables a flexible environment where capacity and tools can be easily scaled up or down based on need. When undertaking a large-scale transformation, often the ideal IT landscape is not exclusively private cloud or exclusively public cloud, but rather a hybrid IT environment that is a best-fit mix of public and private cloud, on-premises infrastructure, and outsourced services. The degree to which an organization utilizes each component depends on its industry, goals and challenges, and although a hybrid model will provide a degree of cost savings and agility as well as support the new digital business, there is a level of complexity associated with this model. There is an ever-expanding pool of options to choose from (e.g., cloud service providers, determining where each application should reside), and this, along with the challenge of managing a pool of vendors and applications across the IT landscape and understanding specific security and compliance implications, is a task most organizations are not prepared to take on. Data and Analytics A growing driver of cloud consulting spend is companies' desire to have effective and efficient support for their data and analytics goals. Although companies across industries are increasingly looking to capture new information, better use current information, and drive timely action based on analytics, those that have large stores of consumer/customer data (e.g., in the retail and healthcare sectors) are in a position where they will soon, if not already, be driven to invest in the cloud because the degree of data management necessary is beyond current capabilities. The pool of existing data and the rate at which it is growing far outpaces most companies' ability to effectively collect and process it using more traditional methods. According to IBM, 90 percent of data that exists currently was created over the past two years, and each day 2.5 quintillion bytes of new data are created. Cloud allows companies to easily and cost effectively scale capacity in line with variable storage and processing needs, and also enables a platform for near-seamless collaboration, laying the foundation for real-time response to analytics results. Compliance and security are companies' top concerns, but equally overwhelming is making decisions on what data to collect and store, and where and how to drive real-time insight that evokes action from the data. 
