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What giant companies WON'T put in the cloud

Ann Bednarz | Oct. 15, 2014
Legacy investments and a reluctance to expose certain assets keep some enterprises from moving more to the public cloud.

Cloud computing illustration
Credit: Chris Koehler

In our interviews with CIOs at large enterprises, we found that adoption levels vary from simple experimentation to heavy use of cloud apps and infrastructure in public and private settings. Yet even among the most cloud-focused businesses, there are resources CIOs won't consider migrating to the cloud at least not yet.

Certain tactical capabilities can easily be acquired in the public cloud, but not everything falls into that category. Some enterprise systems aren't ready to be run in the public cloud because of safety and reliability concerns, says Joe Spagnoletti, CIO at Campbell Soup.

Spagnoletti emphasizes that Campbell's is not trying to do everything in the cloud. Projects are "highly targeted to the things we're trying to change. Double entry bookkeeping hasn't changed for a long time," Spagnoletti says.

At Dow Chemical, IT has built a cloud-based infrastructure that includes systems hosted by vendors as well as its own private cloud. On the applications side, while the majority of its applications are in a cloud environment, only about 10% are in the public cloud. Looking ahead, about 30% to 40% of applications are expected to be in the public cloud within three years, says Paula Tolliver, CIO and corporate vice president, business services.

Dow's private cloud delivers a lot of the benefits of cloud, and it positions the company for future public cloud migrations. As the company does its lifecycle planning and weighs future investments, it starts with a cloud mindset. What likely won't go to the cloud? ERP. Dow doesn't have any plans to move its core SAP systems to the cloud. Doing that would mean major upheaval, Tolliver says. "What's the financial incentive for us to go?"

Neither is Family Dollar rushing to move its core business systems to the cloud.Family Dollar runs a variety of cloud set-ups, including SaaS applications and infrastructure-as-a-service through Amazon. Systems that have been moved to the cloud include HR applications for training, hiring and screening of new employees; SharePoint, through Amazon, for store operations; and the website, which is run through Amazon. In general, the systems that lend themselves to cloud need to be used most of the day, don't have a batch processing cycle, and aren't terribly data intensive, says Family Dollar CIO Josh Jewett.

Still, most of the company's core IT resides on premises. ERP and data warehousing, for example, are internal largely because so much data runs through these systems that "there isn't a good business case" for passing it in and out of the company continuously, Jewett says. "You have to move it through a skinny pipe. That takes a lot of time, and partners may charge by the megabyte or terabyte. If you're talking about close to a petabyte of data, not only is it hard to move but it's cheaper to keep it on premises," he says.


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