Highlights From the VMware IT Performance Annual Report 2021: Cloud Transformation: Part Three

Part one of this series provided an overview of the VMware IT Performance Annual Report 2021, and part two dealt with cultural transformation.

This blog will take a closer look at cloud transformation and how integral it is in promoting innovation.

In the last few years, the speed and scale of cloud adoption have dramatically increased. Benefits of this migration include the potential for operational cost savings, positioning to maintain a competitive edge by fostering innovation and improvements in Customer and colleague experiences.

Operating Cost Savings

The rule of thumb is traditional IT organizations typically spend over 30% of their budget on infrastructure. Extensive monolithic database and enterprise resource planning (ERP) applications required combined efforts of external vendors, partners and consultants, as well as in-house SMEs and IT staff. The specialization of each app deployment created IT silos. Long test cycles and even longer deployment cycles often necessitated significant hardware upgrades to achieve the desired performance. The business cost of these cycles was tremendous, and by the time the new system was deployed, the subsequent updates were already being planned.

Migrating to the cloud sees cost savings between 10-20 percent. A single operating model across the data center, public cloud and edge exemplify the benefits of cloud and multi-cloud economics by reducing operating costs by 41 percent. This savings in operating costs can be reinvested for needed resources and innovation initiatives. Analysts have forecasted that the cost of the ownership gap between legacy infrastructure and cloud transformation will continue to widen over the next few years.

Cloud platforms are malleable and resilient, as they have inherent business continuity and disaster recovery (BC/DR) features, ensuring replicated systems and data failover when a disaster happens. According to a study by Gartner, the average cost of IT downtime is $5,600 per minute. VMware IT maintains 99 percent consistent uptime for IT services.

Innovation

The growing trend of businesses moving to the cloud creates the byproduct of innovation from seamless collaboration, elimination of uncertainty and reinvention of business offerings. In addition, cloud transformation allows for leveraging real-time data analytics enabled by artificial intelligence (AI) and machine learning (MI).

Cloud transformation has produced new opportunities to reinvent our products and services, offering opportunities for our business to create new value and remain competitive in the marketplace. An innovative mindset is all that's needed to capitalize on the capabilities available by the cloud.

In 2017, not long after VMware signed our partnership with Amazon Web Services (AWS) to build VMware Cloud on AWS, internal end users across VMware began to experiment. We realized we needed to embrace the public cloud as a legitimate source of computing resources for our end users and enable them to consume the public cloud safely and responsibly. Thus, the VMware Cloud Business Office was created. Today, the VMware Cloud Business Office is a cross-functional team with diverse skills in finance, data science, cloud architecture, strategic sourcing, site reliability engineering, and development.

Customer and Colleague experience

Our cloud transformation improved IT responsiveness to the business by 29 percent. It improved our ability to serve customers by 28 percent and accelerated the delivery of application features and releases by 28 percent. In addition, we witnessed customer satisfaction increase because of better services through online and mobile channels, faster and more flexible delivery and greater product selection.

Employees are already working in a distributed manner. However, there are still challenges to delivering a consistent experience on any app, on any device, from anywhere, at any time-all while maintaining security. Utilizing cloud services ensures remote employees stay productive from onboarding through offboarding and help IT staff scale to manage and measure distributed employee experiences.

When the pandemic upended how we do business, 95 percent of VMware colleagues transitioned to working remotely over just one weekend. This would have been unheard of with legacy infrastructure.

VMware IT continues to mine the benefits of cloud transformation to save costs in our operations, keep us competitive with new products and services and delivering positive Customer and colleague experiences.

Part four of this series will explore the digital transformation category workplace transformation.

VMware on VMware blogs are written by IT subject matter experts sharing stories about our digital transformation using VMware products and services in a global production environment. Contact your sales rep or [e-mail] to schedule a briefing on this topic. Visit the VMware on VMware microsite and follow us on Twitter.