Is Cloud Computing Really Delivering Business Value? A Critical ROI Review

Recent research shows cloud computing benefits IT departments more than other business areas, yet it falls short of guaranteeing overall enterprise success.

"Cloud has huge commercial value!" is the rallying cry repeatedly shouted by cloud providers and partners at every cloud conference, but the reality is far more nuanced.

After more than 20 years as a cloud technology expert, I never claim that cloud is always the right or wrong solution; like any technology trend, cloud must be evaluated case by case.

This balanced approach may cost me friends or even jobs, but I believe it is the correct way to consider cloud deployments in 2024.

Who Really Benefits from the Cloud (Besides Vendors)?

A recent McKinsey survey of about 50 European cloud leaders shows that the benefits of cloud migration are still debatable.

In other words, cloud migration is not as universally beneficial as we imagine.

The core promise of cloud computing is to deliver agility, cost savings, and innovative services to enterprises. Yet the survey found that only one‑third of companies actively monitor non‑IT outcomes after moving to the cloud, indicating a less‑than‑optimistic picture. Moreover, 71% of firms measure cloud adoption impact only through IT‑operations improvements rather than core business benefits.

This imbalance raises a key question: are the primary beneficiaries of cloud migration merely the technology departments, not the broader business units they are supposed to empower?

While cloud technology is often linked to business agility and new revenue streams, only 37% of respondents reported cost savings outside of IT, and just 32% cited new sources of revenue despite billions invested.

Consequently, the transformative potential of cloud computing is rightly questioned. The promise of agile business units exploring new markets appears to be a mirage. Although 95% of European enterprises claim to derive value from the cloud, the gains remain isolated, modest, and fall short of the expected comprehensive revolution.

Cloud Computing and AI Return on Investment

McKinsey emphasizes the necessity of incorporating generative AI into cloud adoption. They estimate that each migrated business domain must achieve up to a seven‑fold ROI. Currently, only a small fraction of companies report satisfactory returns from their cloud initiatives.

Key questions we need to consider:

Can artificial intelligence significantly increase cloud provider usage?

Should organizations continue approving public‑cloud investments without careful deliberation?

Is it better to deploy AI systems only when there is a clear, justified business case?

Despite technical advances from cloud deployments, 13% of surveyed firms say the expected ROI is modest. In my view, cloud investment returns should be higher, yet many enterprises lack foresight into the true value of their cloud strategies.

More unsettling, 55% of companies express satisfaction with their cloud investments, highlighting a gap between perceived satisfaction and actual business value. In other words, the AI hype is driving poor technical decisions as the perceived value of cloud is overstated.

This and similar surveys sound an important alarm for enterprises to reevaluate their cloud strategies.

We must scrutinize cloud computing prospects from the outset. So far, there is little exciting action to control the situation. I see more cloud deployments, but without a solid understanding of the business value they should deliver.

Focusing on cloud investment ROI must shift from pure IT‑operations improvements to tangible business outcomes. This means rethinking metrics and designing better indicators. Many already realize that cloud’s commercial value may be illusory, yet few are willing to be the bearer of bad news.

I firmly believe in being honest and admitting mistakes, especially when confronting truths that could save a business. Only by measuring cloud migration success beyond the IT department can enterprises hope to unlock the full potential of cloud computing.

The journey ahead is challenging, but for those willing to question, adapt, and reimagine what cloud can truly deliver, it also holds abundant opportunities.