Press release

Most companies leave two-thirds of financial benefits on the table when they migrate their workloads to the cloud

Most companies leave two-thirds of financial benefits on the table when they migrate their workloads to the cloud

New Bain & Company survey finds few companies use cloud to its full potential, putting them at greater security risk and hurting their business performance

  • April 08, 2015
  • min read

Press release

Most companies leave two-thirds of financial benefits on the table when they migrate their workloads to the cloud



New Bain & Company survey finds few companies use cloud to its full potential, putting them at greater security risk and hurting their business performance

New York – April 8, 2015 – Despite heightened awareness among business and IT executives about the benefits of moving their IT workloads to the cloud – faster time to market, more flexible, scalable systems and reduced data center costs – few use it to its full potential.  A recent Bain & Company cross-industry survey of more than 400 companies around the world found that companies on average put only 18 percent of their workloads in the cloud.  The result, as detailed in Bain's recent report, Tapping Cloud's Full Potential, is that these companies fail to capture up to two-thirds of the potential financial benefits from workloads already in the cloud.  Those that continue to delay cloud adoption will fall further behind in agility and innovation, which may also put them at a greater security risk, hurt their business performance and make it harder to attract Millennials who want to work at leading companies. 

According to Bain's analysis, companies that are serious about realizing cost savings and other benefits from the cloud should aim to migrate at least 50 percent of workloads to the cloud, although adoption rates vary across and within industries. For example, financial services ranked fourth in adoption, even though only one-quarter of banks say the use cloud solutions today.  The industrial sector led the increase in cloud spend with 30 percent growth over the last four years, followed by retail, government/nonprofits, consumer packaged goods and healthcare.  Those sectors with the least amount of growth:  telecom, transportation and energy/utilities, where the spend on cloud technologies actually decreased by 10 percent.

"The cloud is considered a ‘disruptive' technology for a good reason.  Realizing its full value requires companies to make major changes to their processes, organizations and even their culture," said Vishy Padmanabhan, a Bain partner and an author of the report.  "While many executives know that migrating their workloads to the cloud delivers speed, agility and cost advantages, it is often a daunting task that they tend to put off.  Meanwhile, the leaders in cloud don't hesitate in the face of big change.  They are making bold decisions, embracing cloud technologies and making significant changes to their IT operating model."

Bain found that executives must overcome four key roadblocks that often stop them from investing fully and deeply in the cloud:

Choose the best deployment model.  The private cloud is not always the best model, unless the workload demands highly restrictive compliance or security requirements.  Private clouds deliver only about one-third of the benefit of public cloud, which, along with hybrid clouds, can generate more value in the form of bigger cost savings, greater flexibility and scalability, and better built-in services.  The double-digit growth of public cloud suggests customers are becoming more comfortable with these solutions as vendors improve security and flexibility, and as subscription fees continue to fall.

Select the right service model.  Selecting the right service model increases the value that a company can capture from the cloud. Yet, executives frequently overestimate the value of customized software, which prevents them from adopting a more cost-effective and industry standard SaaS option.  When custom development is required, enterprise architects and development leads need to take a fresh look at the latest offerings to see if going the extra distance with platform-as-a-service (PaaS) could add more value than infrastructure-as-a-service (IaaS) for their workloads.

Change the IT operating model.  Bain's analysis suggests that as much as half the value of the cloud lies in the changes that a company makes in its operations.  The biggest returns come from stronger alignment between business and IT on cloud-first guiding principles for future workloads, vertically integrated teams with project ownership from beginning to end and a staff that's empowered to access the resources it needs.

Fully capture the cloud opportunity.  Successful workload migrations that help capture the cloud's full potential require executives to understand and overcome common barriers to adoption:

  • Put a significant number of workloads on efficient clouds run by the most advanced providers, even though IT teams believe they are the most capable to host critical workloads in corporate data centers
  • Evaluate virtualized assets for cloud migration by understanding that virtualization provides only a fraction of the cost and speed that cloud delivers
  • Accurately assess the cybersecurity posture and optimizing deployment models and cybersecurity best practices to mitigate risks
  • Factor in long-term cost avoidance, such as not having to expand and upgrade data centers.

Additionally, executives should have a complete picture of their organization's traditional workload costs, the ability to identify the right goals – such as how much of the business' work they can move to the cloud – and be position to carry out a comprehensive reform of the traditional IT operating model.

"Companies that already have some workloads in the cloud can't afford to relax," said Syed Ali, a principal at Bain and an author of the report.  "They still have room to capture additional value if they methodically evaluate all of their workloads for cloud migration.  This requires overcoming the identified roadblocks and building IT's operational muscle to drive ongoing migrations."

To receive a copy of report or arrange an interview with the authors, contact:  Dan Pinkney at or +1 646 562 8102

About Bain & Company

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