Cloud Strategy Can Make or Break Your Digital Transformation

As enterprises continue to grapple with rising costs and elusive returns on investment, cloud migration has evolved from an innovation play to a survival imperative.

With worldwide end-user spending on public cloud services forecast to reach US$723.4bn in 2025 – up 21.5% from 2024 – the question is no longer whether to migrate, but how to do it profitably.

The stakes couldn’t be higher. Recent research from Akamai Technologies reveals a sobering reality: only 35% of EMEA businesses are satisfied with their current cloud providers, while 67% expect cloud costs to rise over the next year, with 42% anticipating increases of more than 10%.

This widespread dissatisfaction is forcing a fundamental rethink of cloud strategy, moving from traditional FinOps approaches to what experts call ‘ValueOps’ – a focus on measurable business outcomes rather than just cost savings.

The ROI reality check

Perhaps the most concerning finding from the Akamai study is that 82% of businesses lack a strategy for tracking ROI for their AI projects, which increasingly depend on cloud infrastructure.

This represents a massive disconnect between investment and accountability at a time when CFOs demand justification for every technology expenditure.

John Bradshaw, Akamai’s EMEA Chief Technology and Strategy Officer for Cloud Computing, sees this as a natural evolution in the cloud journey.

“We’re now at the point where the rubber needs to meet the road, and you have to start seeing value come back from these investments,” he explains.

“What I think we’ve seen up until now is people have really heavily invested in AI because that's been the thing that people have wanted to do, which is great and really helpful to help innovate and come up with new ideas.

"But we’re now at a point where these have to be rationalised and turned into real business outcomes.”

This shift reflects broader maturation in the cloud market.

According to CloudZero’s State of Cloud Cost report, cloud waste averaged 30% of companies’ cloud budgets in 2021, jumping to 32% in 2022, suggesting that easy gains from cloud adoption have been captured, and organisations now need more sophisticated approaches to extract value.

The economics of escape

The challenge facing many organisations is what John describes as the "Jenga problem" – trying to extract value from complex, interdependent cloud systems without causing everything to collapse.

"If you've made a bet on a single provider, a couple of providers, we're in this 'multiple cloud' type of world rather than multi-cloud, where you can use a bit of this database here from this provider, a bit of something here from this other one," he notes.

This vendor lock-in issue is more than just a theoretical concern.

The Akamai research shows that 41% of businesses say the cost and complexity of migrating data and applications outweigh the potential benefits of switching providers.

Meanwhile, 69% of IT leaders saw budget overruns in 2023, with research by McKinsey & Company revealing that 75% of cloud migrations exceed their budgets.

This challenge extends beyond technical complexity to fundamental business transformation.

More than two-thirds (68%) of businesses report that increasing cloud costs are reducing budget for other areas, with new AI projects (26%), cybersecurity (26%) and IT staff costs (24%) among the most frequent casualties.

One in five businesses now consider their cloud computing costs “unmanageable”.

The leadership perspective

The urgency around cloud migration is being driven by business leaders who understand the competitive implications.

“Cloud spending is growing fast – exponentially for some – and it's holding businesses back from investing in growth and innovation,” explains James Kretchmar, Global CTO of the Cloud Technology division at Akamai Technologies.

“This is especially true with AI, where businesses are struggling to squeeze return on investment [ROI] out of their investments.

“Leaders need to take a hard look at where they're spending and what outcomes they expect. Traditional ROI models don't map neatly to AI – productivity alone isn't enough," he continues.

"Companies have to prioritise the quality of outcomes and use the right tool for the job. This includes looking beyond the legacy cloud providers to those [designed] for performance-sensitive applications like inference.”

This perspective is shared by leading technology executives across industries.

Syed Shabih Abbas, Senior Director at DXC Technology, argues that the fundamental drivers for cloud migration have evolved: "If you would have asked me a question like this 10 years back, I would have said cost. That's not the case anymore,” he said in a panel at Tech & AI LIVE in London.

“So why would you want to move to cloud is if you are thinking transformation - if you are trying to transform your enterprise, really use the scalability and the next-gen technologies.”

However, Syed also warns against rushed migrations: “Where you don’t want to move to cloud: if you're trying to move as-is your estate.

"You are in a rush. You are in a phase where you are competing with your other enterprises, where you say, ‘Oh, those guys are 90% on cloud. Why am I not?’ You don’t want to get on to the cloud in that way.”

Planning for success – and failure

The complexity of migration planning cannot be overstated. Syed emphasises the importance of proper preparation: “The way I see it is it's a 70-30 rule. I call it P² and E and then O². P² is prepare and plan, and that's where you really spend 70% of your time.

"Execution – once it is done, it’s okay. You’ve got a lot of tools. And then the last O² is how do we operationalise it and how do we optimise it?”

This planning-heavy approach is echoed by practitioners who have learned from both successes and failures.

Jason Normanton, Head of Cloud Security Architecture & DevSecOps at Check Point Software Technologies, stresses the importance of comprehensive assessment: “I’ve always recommended to do a full inventory of all your applications.

"You then prioritise which ones you believe will be fit to move to cloud first, and you create what's called a wave plan.”

However, even well-planned migrations can face setbacks. The panel discussed several high-profile reversals, where organisations have moved workloads back from cloud to on-premises infrastructure.

“I have seen transformation fail. I have seen organisations backing out as well,” Syed admits. “But again, they have to stand up with a new and different strategy because they cannot always be sitting on that old legacy world.”

Innovation at the edge

One of the most significant trends emerging in 2025 is the shift towards edge computing and distributed architectures.

AI-driven migration tools are growing faster than anything else, with 28% annual growth in the last couple of years, while edge-to-cloud architectures are rising fast: 1% in 2023, accelerating to 25% in 2024.

John sees this as essential for the next phase of cloud evolution, particularly as AI workloads become more demanding.

“If you’re trying to calculate the curvature of space-time of an object approaching the event horizon of a black hole, or you want to know what trainers look cool, you probably don't want the same amount of information in there,” he quips, referencing the movement from large language models (LLMs) to smaller, more focused models (SLMs).

This shift towards distributed computing is being driven by both cost and performance considerations.

“Narrowing it down means you can move it much closer to your customers, your end users of those services. They get a better experience, you get a better experience as the service provider because your customers are more engaged,” John explains.

The bottom line

Looking ahead to the next five years, the question remains whether organisations will master the economics of cloud and AI, or continue struggling with cost management and value extraction. John remains cautiously optimistic but emphasises long-term thinking.

“You must keep a long-term eye on things, and none of this is easy. It wouldn't be fun if it was easy, to be honest,” he notes. “But if you can front-load that with today’s wages and developer time and costs, you will be so much better off in the next five years.”

The key, according to industry experts, is recognising that cloud migration is not just about technology but about fundamental business transformation.

Organisations that treat it as merely an infrastructure exercise are likely to join the ranks of those experiencing budget overruns and disappointing returns.

As cloud spending continues to accelerate – with cloud budgets rising by a projected 28% over the next year – the pressure to demonstrate value will only intensify.

The organisations that succeed will be those that move beyond the initial enthusiasm for cloud adoption to develop sophisticated strategies for measuring, managing and maximising their cloud investments.

The migration imperative is clear: organisations must evolve their approach to cloud strategy, focusing on business outcomes rather than just technical capabilities. Those that fail to make this transition risk being left behind in an increasingly cloud-native business landscape.

With 59% of organisations now having a dedicated FinOps team, up from 51% last year, it's evident that the industry is beginning to take cost management seriously.

However, as John warns, success requires thinking beyond short-term cost savings to long-term strategic value creation. “If you can front-load that with today’s wages and developer time and costs, you will be so much better off in the next five years,” he says.

The cloud promises remain compelling – but realising them requires strategic sophistication that many organisations are only beginning to develop.

The most successful migrations will be those that recognise a fundamental truth about digital transformation in the cloud era.

As Syed from DXC Technology puts it: “It’s not that once you do a cloud transformation you just stop. It's a continuous transformation.”