What is cloud adoption?

This shift from on-premises storage, where an organization’s applications and data are hosted on its own onsite servers, is a core component of digital transformation. By hosting IT infrastructure in the cloud, organizations can access data from any location, scale services up and down to meet demand and make systems more resilient in case of failure.

Modernizing in this way can be easier said than done. In 2025, Gartner predicted that 25% of organizations will experience dissatisfaction with their cloud adoption by 2028 due to cost or mismanagement.

There is a key difference between cloud adoption and cloud migration. While cloud migration is the technical process of moving data from on-premises servers to the cloud, cloud adoption is the broader integration of cloud technology into business operations.

Cloud adoption is a cultural initiative that requires buy-in from business and technical staff, as well as careful attention to cost, compliance and training for the new cloud practices introduced.

Common cloud adoption frameworks include:

• “Lift and shift,” or directly transferring applications and data to the cloud with little or no changes.
  
  
• Replatforming, or targeted optimizations to apps during migration to take advantage of cloud capabilities without changing the core architecture.
  
  
• Rebuilding IT infrastructure to make it fully cloud-native.

The process of cloud transformation looks different depending on which approach an organization decides is appropriate. But often, it follows the same basic roadmap: An organization will assess its IT assets, determine the cost, select an approach, decide on one or more cloud providers, set up any new IT assets required by the migration plan, commence a phased migration and continually evaluate and streamline the process.

In practice, cloud adoption might look like a university deciding to first migrate its email services to Google’s Gmail. Next, over the course of several years, it migrates its website to Google Cloud, and then core student database and classroom technology functions to the cloud, before retiring all on-premises servers.

Each organization’s cloud journey is distinct, but they all generally follow the same sequence of assessment, procurement, construction, migration, testing and optimization.

Many leading cloud providers, such as Amazon Web Services (AWS), Microsoft Azure and IBM Cloud have their own established frameworks to guide organizations through cloud adoption. Almost always, these frameworks begin with a simple, but crucial task: determining exactly how cloud implementation will drive an organization’s business outcomes.

Those outcomes might include reducing onsite infrastructure costs, decreasing application latency or speeding up the DevOps pipeline. Identifying these goals—and then identifying how prepared the organization is to achieve them, and what people, skills or resources it needs to do so—is the first step in cloud adoption before choosing a cloud model and providers.

After establishing its goals and performing a thorough self-assessment, an organization is ready to start evaluating solutions and providers.

There are multiple cloud architectures that organizations might choose depending on their needs, including the public cloud, private cloud, hybrid cloud and multicloud.

The public cloud is a form of hosting where a third-party provider makes the cloud platform available over the public internet. Its combination of low cost and versatility makes it the most widely used form of cloud computing. It is most appropriate for organizations that need to actively scale their clouds according to business needs, such as online retailers. Public cloud is also useful for organizations with low overhead or capability for managing the cloud’s infrastructure themselves.

The private cloud, also known as an internal or corporate cloud, is a proprietary hosting solution in which all hardware and software resources are dedicated exclusively to (and accessible by) a single organization. This arrangement is most useful when required for security or compliance reasons, such as an organization that handles confidential documents, intellectual property, personally identifiable information (PII), medical records or financial data.

Hybrid cloud is a cloud strategy that combines elements of the public and private clouds, often along with onsite hosting infrastructure, to maximize flexibility. Hybrid cloud is especially important in the context of containerization, which breaks down monolithic applications into microservices that can be ported and run across different cloud environments based on business need.

Agentic AI can benefit from hybrid cloud as well. It requires fast and trusted access to data wherever it resides, along with robust security and governance, all of which hybrid cloud infrastructure is designed to support.

Multicloud environments use the cloud services of more than one vendor simultaneously. This arrangement allows organizations to avoid vendor lock-in, where they become dependent on one vendor for services. Multicloud can also improve enterprise resilience by giving the organization access to more than one environment in the event of an outage. Businesses typically use open-source frameworks that are supported by all cloud providers, such as Kubernetes, to operate in these environments.

Rarely do organizations strictly practice just one of these models. More often, organizations adopt elements of each based on their needs and business goals.

After a cloud model has been identified and vendors hired, the next step in cloud adoption is to set up the necessary IT assets.

These components include networking infrastructure, identity and access management (IAM) systems, cybersecurity tools, observability tools to monitor the new cloud environment and data storage solutions. These components are often built first as a self-contained cloud “landing zone” that can be tested for its functionality before the actual migration begins.

Failure to build and test these assets before starting migration can result in cost overruns and inefficiencies that can hamper or even prevent a business’s cloud adoption efforts.

Organizations use various tools and strategies to move IT systems to the cloud. For example, the “7 Rs” of cloud migration, based on an initial framework introduced in 2010 by Gartner, include rehosting, relocating, replatforming, refactoring, repurchasing, retiring and retaining.

Rehosting, or “lift and shift,” moves applications to the cloud without changing the application code or architecture, typically by using virtual machines (VMs). This strategy works best when organizations need to migrate quickly, lack resources to rearchitect applications or want to realize immediate cloud benefits like reduced data center costs.

Relocating transfers workloads by moving virtual machines directly between environments without modifying applications. This approach typically involves moving VMware-based workloads to cloud environments.

Replatforming makes targeted optimizations to applications during migration to take advantage of cloud capabilities without changing their core architecture. An example is the migration of structured query language (SQL) databases to a Kubernetes container that can then be ported across a hybrid or multicloud environment.

Refactoring is the reengineering of applications into cloud-native versions. This process might involve breaking up applications into containerized microservices or adopting serverless computing. It represents a significant investment, but it can help when existing IT infrastructure is resistant to scaling.

Repurchasing replaces existing applications with cloud-based software as a service (SaaS) alternatives when those alternatives are superior products, or if the migration would be more expensive than simply adopting new SaaS.

Retiring is identifying and decommissioning applications that are deemed unnecessary or obsolete during cloud adoption. Organizations retire applications when usage data reveals minimal adoption, other systems replace their capabilities or migration costs outweigh their business value.

Retaining is keeping applications in their current environment until a more convenient time for their migration. Organizations might retain certain applications if they require extensive retooling, have complex dependencies or need to meet rigorous compliance standards.

As with choosing a cloud model, most organizations will deploy some combination of these strategies for different components of their IT infrastructure.

Both during and after the migration, organizations rigorously test the functionality of cloud components to make sure that they are achieving the speed, data portability and resilience they intended.

Common tests during migration include:

• Functional testing, which validates application migration.
  
  
• Data integrity testing, which ensures datasets are not lost or corrupted.
  
  
• Cutover testing, a dry-run rehearsal of the cloud migration steps to ensure their proper functioning.
  
  
• Rollback testing, which verifies that administrators can revert elements to their premigration states in the event of an error.

After migration, teams perform:

• Performance and load testing, which tests the newly cloud-based system’s ability to perform at different levels of demand.
  
  
• Security testing, which flags vulnerabilities and compliance issues in the new cloud environment.
  
  
• User acceptance testing, where stakeholders and users execute their workflows and provide feedback.

Cloud migration is the technical process of transferring services to the cloud. Cloud adoption is a more comprehensive process whereby an organization fully integrates the cloud into its IT infrastructure and business operations.

Cloud migration is central to cloud adoption, but it is just one part of the process. Adoption also involves identifying the business goals that justify moving to the cloud, scaling up or reorganizing to support cloud services and continuous testing to optimize services and ensure that the cloud is supporting business goals.

While there is no cloud adoption without some form of cloud migration, organizations can make the mistake of simply migrating to the cloud without planning for the organizational shift that adoption entails. Such a mistake can lead to cost overruns, account and resource sprawl, cloud security and compliance issues and other organizational challenges.

Benefits of cloud adoption can include a more efficient and flexible IT ecosystem, boosted security and data protection and the reduction of infrastructure costs.

Cloud solutions provide the benefits of increased speed and agility, virtually unlimited scalability and enhanced strategic value.

For example, cloud technologies can streamline the CI/CD pipeline, enabling DevOps professionals to spin up new infrastructure on demand. The cloud also helps organizations avoid purchasing excess capacity that sits unused during slow periods. Instead, resources can scale up and down in response to spikes and dips in traffic.

Cloud computing also offers numerous benefits for hosting artificial intelligence (AI) tools. For example, the specialized hardware required for training AI is expensive. Cloud providers can offer access at a lower rate than purchasing them outright.

Security advantages of cloud computing include pushing automated updates to the network and enhanced disaster recovery.

Cloud providers generally push updates and patches for known security vulnerabilities to their services through automation. While IT and cybersecurity teams are still ultimately responsible for the integrity of their systems, provider-side fixes can help reduce visibility gaps and mitigate human error.

Cloud computing is also crucial for disaster recovery (DR), enabling organizations to minimize data loss and business disruptions. With cloud infrastructure, organizations can store multiple copies of critical data in multiple locations, and agilely switch from one server to another in the event of a failure. Even if part of the system goes down, core operations and services can continue running—or at least come back online more quickly.  

This cloud-enabled resilience enables organizations to maintain business continuity in the event  of cyberattacks, equipment or supply chain failures, natural disasters, power outages or other unexpected events.

Cloud adoption can make infrastructure more cost-effective by allowing organizations to “right-size” their server use to organizational needs, reducing data server expenditures and freeing up capital.

When organizations pay as they go for cloud services depending on demand, it can free cash flow for other IT investments and make IT costs easier to control. Often, in the course of cloud adoption, organizations will find significant waste in paying for underused onsite infrastructure during downtime.

Moving to the cloud can also save organizations money if they own or lease physical data center space, which carries high energy costs and requires expensive hardware upgrades and maintenance. Organizations can reduce or do away with their own physical data centers and use their cloud providers’ instead, lowering these costs.

Challenges of cloud adoption include a potentially complex and lengthy integration process, skill gaps and cost management issues.

Integrating existing systems with the cloud can be challenging with regard to networking and the functioning of legacy applications.

Cloud integration requires high bandwidth to retain its advantages of speed and data portability, forcing an extra level of network vigilance and maintenance. Also, many existing applications will need to be reconfigured, rebuilt or replaced entirely to function correctly on the cloud.

Organizations need to ensure that cloud adoption is driven by expertise and best practices on both ends—with experts on legacy systems and the cloud collaborating to smooth the process. This might require hiring, retraining employees for cloud systems, consulting with outside firms or, more likely, a combination of these approaches.

Without a comprehensive understanding of how to scale cloud usage to business needs, organizations can diminish or lose out entirely on the cost savings intended by cloud adoption.

Cloud vendors offer a plethora of pricing models that can be granular in their usage charges, requiring a thorough analysis of which best meets the organization’s business needs. This analysis, in turn, requires a comprehensive view of the business’s use of the cloud, making observability metrics and practices especially important.

Organizations must also be vigilant to avoid vendor lock-in, where cloud investments made in compatibility with one provider become a sunk cost if a new provider is chosen (or added, in a multicloud environment).