Moe: To my grandmother, a rock against which many leaned. Illiterate by circumstance, wisest by experience, she raised a tribe on her own. I also want to dedicate this to my family, without them there would be no me, really, gratitude.

Ingo: To my darling wife, Kathleen, and my sons Sebastian, Alex, and Leonard. You are important to me; I could not imagine a life without you.

Roland: All Glory to God the Father and My Lord Jesus Christ. As always, thanks to my wife, Blanca, for putting up with my schedule; I love you. I love my kids (Alyssa, Savvy, Joseph, and Amo); they rock.

Kyle: To my darling wife, Ann — thank you for putting up with yet another book project, even when you didn’t think it was possible for me to be any more stressed out than I was. You’re the greatest, dear.

Ndu: To my family, and especially to my brother Acho, whose memory lives on in our hearts.

Acquisitions Editor: Steven Hayes

Project Manager: Colleen Diamond

Development Editor: Colleen Diamond

Copy Editor: Kathy Simpson

Technical Reviewers: Rachel Reinitz and Bobby Woolf

Editorial Assistant: Owen Kaelble

Production Editor: G. Vasanth Koilraj

Cover Design: Wiley

Cover Image: Courtesy of IBM, Inc.

Team: Special thanks go out to Sreekanth Iyer, who contributed much of the text for Chapter 6 — Sreek, you’re the best — thank you so much for coming to our rescue when we needed you. Also special thanks to our technical reviewers, Rachel Reinitz and Bobby Woolf for spending hours over their holidays reading and commenting on this book. Special thanks also go out to Scott Shekerow for a completely unexpected but much appreciated editing pass on the early chapters of the book. We really appreciate it folks — thanks for your dedication and the sacrifice of your time.

Moe: A sincere thank you to my colleagues at IBM Lab Services and Cloud Garage, whose talented engagements at many clients and generous collaborations are reflected in our content. A special thank you to my friend and partner Bala Rajaraman, one of the greatest cloud minds and whose dedication and encouragement to truly master our craft, inspired much of our efforts.

Ingo: I want to thank my buddy and good friend Richard Wilkins (DE in IBM Singapore) for being my wingman when navigating through the stormy clouds. Richard — thanks for being `available at odd hours to discuss technical approaches and challenges. Thanks also go to the solution engineers and consultants who validated the concepts in this book in the labs and with clients. Last but not least, I want to thank my wife Kathleen for allowing me to dedicate a majority of my time to clients and IBM.

Roland: Thank you to the many authors who contributed to the architecture center, which provided much content for us to use. Thank you to The Solution Engineers and Garage Method Team for the hard work and putting up with me.

Ndu: I'd like to thank the great talent I have had the privilege to cross paths with in life and work. I hope this book reflects in some important way the knowledge and wisdom our interaction has imparted to me.

In a very real sense, the cloud is ubiquitous. We would find it hard to believe that there’s a single reader of this book who doesn’t consume some type of cloud service. Whether it be a cloud music service like Apple Music or Spotify, or cloud storage such as Dropbox, or a Software as a Service (SaaS) application like Salesforce running on the cloud, cloud services touch all our lives.

But these examples are just the tip of the proverbial iceberg. Cloud technologies such as Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) are redefining how Information Technology (IT) organizations develop and deliver solutions to their customers. If you’re an IT professional and you are not using the cloud in one of these ways already, you soon will be.

Who This Book Is For

Ever since Beal and Bohlen¹ defined the technology diffusion process in 1957, technologists have divided up the different waves of technology adopters into four different groups: Early Adopters, Early Majority, Majority (or Late Majority), and Laggards (or Non-Adopters). Those groups are often represented as different quartiles of a normal distribution or bell curve, as Figure I-1 shows². Geoffrey Moore, in his classic book Crossing the Chasm, informed us that not all technologies make it past the Early Adopter stage; there’s a large gap, or a “chasm” between Early Adopters and the Early Majority.

What we can state, with finality, is that the cloud has made it past the technology adoption chasm. In a 2017 Forbes article³, Louis Columbus quoted from an Intel survey that showed fully 80 percent of all IT budgets would be committed to cloud applications and solutions. The cloud has now clearly moved beyond the early adopters into the two majority quartiles.

That fact is what drove us to write this book. In our customer-facing work we have seen that the vast majority of IT departments, in all industries, are now facing the problem of deciding how to adopt cloud technologies, and are somewhere in the process of formulating strategies and approaches for how to go about changing their organizations to handle this new set of technologies. But what we have seen is that the process of formulating a successful cloud adoption strategy, and what’s more, the process of implementing that strategy is not at all easy. What we will do in this book is show you how we have worked with many of the successful early adopters of the cloud and tell you their stories and share the lessons we have learned in working with them.

But we’re not only writing this book to speak to the early majority and late majority of cloud adopters; we’re writing it for a more specific audience — the enterprise audience. Our definition of an enterprise is simple; we mean a business that is not in the business of IT. So by this we exclude technology startups, which live in a different ecosystem and often work by different rules. If you are looking for tips and techniques on using the cloud to find your next round of venture capital, you’re looking in the wrong place. However, if you work for an Insurance Company, a Bank, a Manufacturer, a Retailer, or any of the thousands of other businesses that use IT but aren’t defined by IT, then you’re a member of our core audience. The size of your business doesn’t matter; we’ve worked with both large and small enterprises, and even startups, but the lessons that we present will be specifically tailored to helping you reach out to your most important stakeholders; your customers, both internal and external and transform that relationship to be more productive, responsive, and forward-looking by using the cloud as part of a larger ongoing digital transformation.

So whether you are the Chief Information Officer (CIO) or Chief Technology Officer (CTO) of an enterprise, or if you report to them in a more specific capacity such as Enterprise Architect, Chief Information Security Officer (CISO), Director of Engineering, or Director of Operations, this book is for you. In fact, we have written our chapters to speak specifically to each of those roles, as you will see later on. But this book is not only aimed at the C-Suite; if you work as a team member for any of the roles named above, you’ll also gain valuable insight on how cloud will affect your job by reading this book.

What to Expect in Our Playbook

In Chapter 1, we will discuss the business drivers that lead enterprises to adopt cloud, as well as how elevated customer expectations drive new requirements that force you to the cloud. We will discuss how highly competitive environments are forcing organizations to move more quickly, and how the evolving regulatory-requirements landscape is also forcing change into existing organizations.

In Chapter 2, we will present an overview of our cloud adoption and transformation framework: its themes, the important dimensions along which an enterprise can gauge where it is and where it needs to be, and how it enables you to take a structured, holistic, and pragmatic approach to cloud adoption.

In Chapter 3, we will share our experience in developing a cloud adoption strategy, presenting the key attributes of such a strategy and providing a prescriptive approach to developing your own strategy. We will share examples of how other companies have developed such strategies and discuss the components of successful cloud adoption strategies.

In Chapter 4, we will focus on how cultural change is the basis for success with the cloud. Often, our clients tell us that cultural change is the most important and challenging aspect of cloud adoption and digital transformation. Culture directly relates to the most critical asset of your organization: your people.

In Chapter 5, we will describe a viewpoint on architecture and technology, showing you how new cloud platforms, service types, and programming models (such as microservices) offer potential competitive advantages. More importantly, we’ll show you how to strike a balance between developing “architecture for architects” and how to communicate in the language of the developer.

In Chapter 6, we will discuss security, risk, and compliance. New technology approaches introduced by the cloud such as pooling and sharing of resources, new deployment models, and multivendor arrangements, mean that we must think differently about security, risk, and compliance. We’ll show you how to take steps to keep up with rapid innovation while providing a safe, secure, and compliant environment for business.

In Chapter 7, we will discuss several technologies and trends that are having a profound effect on business and the technology platforms that support them. These emerging technologies are changing the nature of services available to your users. By the very nature of innovation, the only constant is change and learning how to deal with that change is the central theme of the chapter.

In Chapter 8, we will explore the IBM Cloud Garage Method that we have codified and refined over many client engagements and in our internal development at IBM. These codified insights and best practices are the keys to rapidly scaling an organization’s capabilities. We’ll discuss the origins of our approach, our lessons learned, and how a holistic view of practices from many different areas is required not only to develop solutions correctly, but to develop the correct solution.

In Chapter 9, we will focus on cloud service management and operations. We will discuss what management and management practices must look for in the cloud. This will include introducing new practices that we have developed and that we have seen work in some of the most challenging enterprise contexts.

In Chapter 10, we will introduce our views on governance. We cannot overstate the importance of governance, which provides the backdrop for effective execution of strategy and continuous advancement toward business outcomes.

The IBM Cloud Adoption Playbook will provide you not only with a conceptual framework for cloud adoption and digital transformation, but with a complete, structured, holistic, and pragmatic approach to succeeding on the cloud.

Notes

The ongoing digital revolution affects individuals and businesses alike. Increasingly, social networks and digital devices are the default means for engaging government, businesses, and civil society, as well as friends and family members. People use mobile, interactive tools to determine who to trust, where to go, and what to buy. This means that the last best experience that people have anywhere becomes the minimum expectation for the experience they want everywhere, including in the enterprise. Given the competitive landscape, this means that enterprises must undertake their own digital transformations, rethink what their customers value most, and create operating models that take advantage of what is newly possible for competitive differentiation.

The challenge for the enterprise is how fast and how far to go down the path to digital transformation and cloud adoption.

Addressing Challenges for the Enterprise

To meet this challenge, enterprises must develop a methodical approach to embracing digital transformation and the cloud. Developing that approach means that they must answer questions such as:

• How do we situate such transformation in the complexity of the enterprise itself and the regulatory environment in which the enterprise operates?
• What considered, integrated set of decisions should we make to ensure consistency and safety at scale?
• How do we ascertain what success looks like in the short term, as well as what steps we need to take in the long term to sustain it?

Increasing customer expectations and a more competitive business context have placed tremendous pressure on business leaders to change the way they set their strategies and run their organizations. New requirements to incorporate more information and greater interactivity quickly drive up costs and complexity.

Business leaders have long used information technology to improve productivity and efficiency, reach new markets, and optimize supply chains. What is new is that customer expectations have changed. How can enterprises best respond to this shift? How can they take advantage of the opportunity to innovate and grow through technology adoption? And how can they do all this cost-efficiently?

This is the domain of digital transformation and its intersection with cloud adoption. Digital transformation incorporates the change associated with the application of digital technology in all aspects of society¹. Cloud Adoption is the way in which businesses implement digital transformation.

In our work with clients, we have found that enterprises that can develop and effectively execute a digital transformation strategy and take full advantage of new technologies, such as cloud are able to transform their business models and set a new direction for entire industries.

We believe the most crucial decision that a company can make to successfully pursue a digital transformation strategy is to wholeheartedly yet thoughtfully adopt the cloud as the IT platform of choice. We have observed many companies that have successfully used cloud adoption to rapidly advance their digital transformation strategy. We have also seen companies make unsuccessful cloud adoption decisions that have hampered or set back their pace of digital transformation. What we will show you in this book is how to model your decision-making process after the successful transformations while avoiding the common pitfalls we’ve seen in the unsuccessful transformations.

We propose to show you how to do this by focusing on three areas:

• Think and Envision the Transformation
• Balance the Transformation
• Thrive on New Foundations

Along with insights from our direct consulting work with many industry-leading organizations, the ideas we present in The Cloud Adoption Playbook (the Playbook) are underscored by influential works including The Three Laws of Performance, by Steve Zaffron and Dave Logan²; The Innovator’s Dilemma, by Clayton Christensen³; View from the Top, by Michael Lindsay⁴; and the transformation of IBM itself.

This Playbook is for those who are (or aspire to be) catalysts for digital transformation in their organizations; leaders who see the need for transformation as well as those who have direct responsibility for executing it. We intend to bridge the business and technology divide and provide a holistic but pragmatic set of ideas that can enable considered, consistent, and successful implementation within complex organizational constructs. We hope that this Playbook guides you in deciding how and where to get started in your digital transformation journey, what important dimensions to consider, and how to make integrated decisions that significantly improve the chances of success while reducing risk.

We have seen many cloud adoption and digital transformation programs succeed; we have also seen many fail. We hope that the tips in this Playbook will add to the body of knowledge and experience on replicating success and extending its impact.

What Drives a Business to the Cloud?

Technology in general, and the cloud specifically, are only a means to an end. The end needs to be defined in terms of a business or mission-strategic intent such as the following business drivers:

• Exceptional user experience
• Accelerated time to market
• Higher service quality
• Cost flexibility
• Repeatability and flexibility
• Safety, security, and compliance with regulation

Growing your business to meet these business drivers requires change and organizational transformation beyond just adoption of technology. To understand where cloud adoption and digital transformation fit within the enterprise, you have to place them within the context of very complex organizational constructs requiring a holistic approach. This approach needs to take into account the requirement to make progress and show success in the short term while keeping the long-term goals in sharp focus.

Because of this organizational complexity, we must define what success looks like in this context to show you what refinement looks like and to demonstrate how to achieve quick wins along the way. The following questions can help guide your organization in understanding this definition of success:

• What are our specific measures of success? Examples might include “Attract and retain top talent” or “Reduce IT delivery time by 15 percent.”
• What are some quick wins in the short term that the cloud could help us achieve? Examples might include “Conduct a workload and data classification analysis to determine what workloads have affinity to the cloud and migrate 5 percent of those to cloud within one year” or “Deliver a high-profile pilot cloud-native application that opens a new route for customer interaction, such as a native mobile app or artificial-intelligence chatbot.”
• What does sustainable success look like in the long term for our digital transformation journey? One example might be “Support idea to market rollout in less than one month.”
• What are the key success factors that our whole organization needs to understand and march toward? One example might be “Improve customer experience by 5 percent on a continuous basis as measured by Net Promoter Score (NPS).”

Quick wins are powerful ways to secure and retain sponsorship. We have seen that companies gain more success over the long term when they build effective, enduring cloud transformation programs that aligned with their strategic intent and business drivers. We recommend that you take stock and periodically evaluate this alignment and course-adjust as necessary to achieve strategic outcomes.

We recognize that cloud technologies present an unprecedented potential for organizations to re-envision their relationship with information technology. But we also believe that the cloud is a catalyst to allow you to go well beyond re-envisioning to actual realization of new types of value. Cloud adoption can transform organizations by better empowering their workforces and ultimately differentiating them from competitors. Companies that can tap this potential become disruptors in their respective markets regardless of industry, which represents a real opportunity for leaders of these organizations.

We also recognize that given their successful history and ongoing commitments with their most valued clients, organizations adopting the cloud may experience first-hand the innovator’s dilemma. You have to strike a balance between two worlds: delivering on existing commitments to stakeholders employing traditional IT methods and tools, and simultaneously adopting the game-changing new technologies required to meet disruptive new business opportunities. All organizations must work out how far to go in each direction to decide what is right for them. In this Playbook, we provide practical approaches to the decisions that need to be made and ways to take action along the important decision-making dimensions we lay out.

What Do You Gain from Cloud?

According to the 2011 National Institute of Standards and Technology (NIST) definition, “Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

The practical outcomes that companies want to realize from cloud computing include resource elasticity, cost flexibility, and self-service provisioning. Putting these two together, you see that you need to achieve the outcomes by using the services provided by cloud providers. This requires a model that allows you to choose not only what services you want, but where they run, and what vendors or providers you purchase them from. We provide practical examples of these models throughout the book.

Taking a step back and looking at the business intents behind why customer adopt cloud, we see enterprises taking advantage of the cloud model because it promises improved efficiency, expanded innovation potential, and revenue growth. We see technology and business function leaders alike attracted to the cloud for the value that it has the potential to deliver. Within these enterprises, leaders are aligning their cloud adoption and their digital transformation programs through strategic intents such as the following:

• Creating a customer-focused enterprise: This intent takes advantage of the cloud model to optimize data and use analytics to adapt to new user behaviors, cultivate trust, and drive profitable growth while preserving an exceptional user experience.
• Increasing flexibility and streamlining operations: You can use the cloud to improve operating leverage with variable cost structures that increase flexibility for both the user and the provider of the cloud-based service. Furthermore, you need to provide higher-quality service, accelerate time to market, and reduce risk.
• Driving innovation while managing cost: By using the cloud to deliver new services efficiently, these new services can improve cost flexibility, provide users instant gratification, and drive competitive differentiation. But you must balance these improvements against decreasing cost per transaction and optimization of existing investments.
• Optimizing enterprise risk management: You can use the cloud to achieve compliance objectives and mitigate operational risk while maximizing return on equity; combating malicious activity; and incorporating repeatability, scalability, resiliency, and flexibility.

At the time of the 2011 NIST definition, cost reduction, improved data access, and demand generation were the top business drivers for cloud adoption. We have seen business drivers, technology platforms, services offered, and cloud deployment models evolve since that time. The top business drivers for cloud now include building exceptional user experiences, providing services in a multi-cloud hybrid environment, and modernizing applications to update existing Information Technology estates. Modernization is especially important for protecting your existing investment while opening applications and data up for new value delivery.

Enterprise digital transformation began with cost savings and simple lift-and-shift initiatives purely for efficiency. Efficiency is now a given, and enterprises require a multi-cloud, integrated platform to enable them to disrupt their industries and lead in their markets.

Although the cloud has helped early adopters generate innovation and new forms of collaboration, there is a concerted shift to scale cloud adoption across the enterprise. This shift includes addressing digital transformation in a sustained way, recognizing that some business functions are more amenable to cloud adoption than others.

Leveraging business drivers and strategic intent to guide and inform the way you rethink cloud adoption and digital transformation means maintaining alignment throughout the transformation journey. Your business is reinvented as the transformation occurs and accomplishments are achieved. The cloud becomes a true catalyst, generating momentum and creating a virtuous circle that creates sustained business success with expanded effect throughout the enterprise.

With your understanding of the intrinsic relationship between business and technology and the need to continuously strive for alignment through the techniques described in the Playbook, we believe that you will be much better positioned to achieve success in both the short term and the long term.