Over 50% of banks and telcos flying blind into cloud migration, says CAST

Cloud migration is one necessary step on the path to digital transformation. But, according to CAST, the software intelligence firm, suggests that application modernisation priorities in financial and telecommunications organisations are lacking.

In traditional industries cloud migration is fraught with challenges. And, common missteps mean cloud migrations are falling short of expectations in mature institutions, with just 40% meeting targets for cost, resiliency and planned user benefits. The report from CAST blames a lack of pre-migration intelligence and fear of modernising legacy mainframe applications as the main drivers for these shortcomings. It found that the adoption of micro-services as a modernisation technique is also faltering from lack of financing.

Cloud migration: key in disrupted era

While these legacy process institutions realise only a third of their target benefits for cloud migration, cloud-native approaches are enabling Fintech firms to outperform traditional banks, achieving more than half their target benefits. But, even though Fintech firms outperform mature institutions on cloud-native apps, banks lead the way on cloud-ready applications with just fewer than 50% rewriting applications.

Fewer than 35% of technology leaders use freely-available analysis tools.

Greg Rivera, VP CAST Highlight at CAST, said: “Pilots going into storms turn to their instruments. If you run headfirst into a cloud migration without objectively assessing your applications, you’re flying in the dark.

“Even one small change to an application has a ‘butterfly effect’ on the rest of the code set, so a disruption as big as cloud migration has detrimental effects including IT outages and loss of business. Migration to the cloud is vital when digitally transforming a business. But, it needs to be done right if organisations want success instead of suffering.”

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Be application ready

There is a systematic failure to assess the underlying application readiness for cloud migration with software intelligence — a deep analysis of software architecture.

To circumvent this, IT leaders must ensure the right architectural model and compliance is in place to avoid increasing technical debt. Unchecked, this leads to more IT meltdowns such as TSB’s £330 million re-platforming crisis in 2018, with customers paying the expensive price for these mistakes.

More than 50% of banks and telcos are effectively taking leaps of faith, not undertaking essential analysis-led evaluations to support and facilitate cloud migrations. Instead, half the CTOs surveyed by CAST use gut instinct and ad-hoc surveys with application owners as the primary basis of their decision to move applications to the cloud. IT leaders need to adopt an analysis-led approach over gut instinct to implement the right cloud migration strategy and realise all potential benefits of migrating to the cloud.

Armed with battle scars, software leaders at banks and insurance firms are revisiting their initial ‘lift-and-shift’ approach to cloud migration plans

Application modernisation

More than 40% of software leaders are yet to define a class based approach to application modernisation. But, to successfully complete migration first gather intelligence and actively assess applications objectively — existing and continuously evolving apps should be re-platformed and restructured during cloud migration.

A European Chief Digital Architect said, “Cloud migration is only really a problem if you’re moving workloads without changing the way they are shaped.”

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Nick Ismail

Nick Ismail is the editor for Information Age. He has a particular interest in smart technologies, AI and cyber security.