Cloud transformation is top of mind for many organizations, with 72% of respondents to TierPoint’s 2025 Technology & IT Modernization Report saying that they plan to expand their cloud services over the next two years. Businesses are motivated to modernize their IT systems for several reasons, including improving their cybersecurity measures, supporting data management, and upgrading their hardware or infrastructure.
Paired with this, 43.5% of respondents say migration to cloud-based services is one of their top priorities. This initiative often goes hand-in-hand with other modernization efforts as part of a larger project called cloud transformation. We’ll cover what cloud transformation is, why it matters so much today, potential challenges in implementation, and key steps to start your transformation journey.
What is a Cloud Transformation and Why Does it Matter Today?
Cloud transformation and cloud migration are often used interchangeably, but there are important differences between the two terms.
Cloud migration typically refers to the act of moving applications, data, or workloads from on-premises infrastructure to a cloud environment—often as a “lift and shift” exercise. In contrast, cloud transformation is a broader, more strategic initiative that reimagines how technology supports the business. It goes beyond relocation and includes modernizing applications, adopting new cloud-native architectures, automating operations, and aligning IT with long-term business goals.
Migration is a step in the journey. Transformation is the full evolution.
Five Ways Cloud Transformation Drives Innovation
If you’re pursuing cloud transformation, you’re likely aiming to combine cloud capabilities with the power of emerging technologies. But how does the cloud actually unlock innovation? Here are five powerful ways cloud transformation fuels innovation across your organization.
Accelerates Product Development and Deployment
Cloud platforms can significantly reduce the time and effort required to provision and manage IT infrastructure by offering on-demand access to compute, storage, and prebuilt services. These capabilities enable faster development cycles by eliminating manual setup and accelerating testing and deployment. Cloud-native development environments also promote better collaboration across departments through centralized platforms, real-time data access, and shared workspaces. As a result, cross-functional teams move faster and more cohesively from idea to release.
Enhances Flexibility to Adapt to Market Changes
Cloud transformation equips organizations with the agility to respond to shifting market demands in real time. Elastic infrastructure allows IT teams to scale resources up or down instantly. Additionally, integrated services such as APIs, real-time analytics, and artificial intelligence/machine learning (AI/ML) capabilities drive continuous innovation without the delays of traditional IT cycles. For IT leaders, this flexibility is a competitive advantage: It empowers the business to pivot quickly, launch new services faster, and capitalize on emerging opportunities with minimal friction.
Supports Advanced Technologies
Cloud transformation creates the ideal foundation for adopting advanced technologies like artificial intelligence, machine learning, data lakes, and predictive analytics. These tools demand high levels of compute, storage, and dynamic scaling, which cloud platforms are purpose-built to deliver. By eliminating the infrastructure constraints of traditional environments, companies can pilot, scale, and productionize emerging technologies that would otherwise be cost-prohibitive or technically infeasible on-premises.
Offers Scalable, Modern Security
Cloud providers deliver a robust foundation for scalable security. These platforms offer secure-by-design infrastructure, built-in compliance frameworks, and real-time threat detection powered by global intelligence. Additionally, they support security measures such as:
- Encryption by default
- Identity and access management (IAM)
- Network segmentation
- Automated security policies that can be applied consistently across environments
Operating under a shared responsibility model, cloud providers handle the security of the cloud. This allows organizations or their managed service provider (MSP) to focus on security in the cloud–including data protection, access controls, and configuration management. As a result, businesses can strengthen their security posture while maintaining the agility to scale and innovate.
Unlocks Data-Driven Decision Making
Cloud transformation empowers organizations to collect, store, and analyze massive volumes of data in a unified, scalable environment. It unlocks
access to cloud-native analytics platforms, data lakes, and AI-powered insights about factors like customer behavior and infrastructure performance. With this real-time visibility, businesses can shift from reactive reporting to proactive, predictive decision-making. Innovation rises as technical and business teams work in tandem to streamline troubleshooting and optimize resource allocation, allowing them to act on insights faster.
Potential Challenges During Cloud Transformation
With a complex undertaking like cloud transformation, businesses can encounter some challenges, including the following:
- Data migration: When you move large volumes of data from one system to another, it can be a time-consuming, complex process. Especially with legacy on-premises workloads, organizations may have to clean the data, reformat it, and run frequent integrity checks to ensure it migrates without any issues.
- Legacy systems: Another issue can arise when trying to integrate the legacy system with the new cloud-based applications and services. This often requires APIs, middleware, or replatforming strategies. Support from specialists who are familiar with both environments may also prove essential.
- Talent gaps: Even talented teams may lack the in-house expertise necessary to pull off cloud transformation. Each transformation project will be different, based on the unique combination of on-premises and cloud resources involved. Businesses may need to invest in additional training, hire new talent, or bring in third-party expertise.
- Cost management: While the cloud can drive cost savings, lack of visibility and governance can lead to overspending. Unused or underutilized resources, poor instance sizing, and an absence of cost tagging can inflate bills. Ongoing monitoring and FinOps practices are critical to stay in control.
- Performance: Performance and user experience issues can arise if network latency isn’t addressed. This could be due to differences in location between the user and the application, or a lack of optimized networking.
- Vendor lock-in: Cloud providers have proprietary services that can make migration and cloud transformation projects easier, but it can also leave organizations feeling stuck. When you feel tied to one vendor, it can be harder to switch or have negotiating power for new contracts.
- Security and compliance: While cloud service providers offer strong security controls and compliance certifications, organizations are still responsible for securing workloads, managing identities, and enforcing data governance. Misconfigured services and lack of visibility remain top risks.
- Change management: Even when change can make a positive impact on your business, there will be employees who will be resistant to new workflows and tools. Clear communication from leadership, hands-on training, and internal champions can ease the transition and build buy-in across teams.
When is the Right Time for Cloud Transformation?
When faced with the complexity, you may feel hesitant to start a cloud transformation journey until it’s the right time. The truth is, there is no single right time to start a transformation project. What will be right for one organization will depend on their business goals, how ready they feel to make a change, the budget and resources they can dedicate to the project, the current pressures in the market, and how well cloud transformation aligns with overall business objectives.
It may be time for cloud transformation if you are:
- Struggling to maintain or scale legacy infrastructure due to rising costs or lack of vendor support
- Preparing for a data center contract renewal or hardware refresh that would require significant capital investment
- Undergoing a merger, acquisition, or organizational restructure that requires faster IT integration and scalability
- Facing new security, compliance, or data residency requirements that are easier to enforce in cloud environments
- Expanding into new markets or regions and requiring faster provisioning of infrastructure and services
- Experiencing delays in product development or innovation due to infrastructure constraints or lack of automation
Tips to Kickstart Your Cloud Transformation Journey
So, you’re ready to start working on your cloud-enabled digital transformation path. Great! Where do you start? Follow these seven best practices to build out a basic framework.
- Define Your Needs and Goals: Why do you want to pursue cloud transformation? What problems will the projects solve? This could include reduced IT costs, improved security, greater ability to innovate, improved ability to meet compliance requirements, etc.
- Assess Your IT Environment: Take stock of your current IT environment, including the data, applications, networks, storage, and servers being used. What dependencies will need to be addressed in the new environment? What starting resources will you need to ensure continued optimal performance? This can help you decide where to start in a phased project, perhaps choosing something that will be easier or more self-contained.
- Identify Skills Gaps: After you know your goals and acknowledge existing infrastructure, it’s time to think about the potential skills gaps within your team. Cloud transformation often requires expertise in new tools, platforms, and methodologies, which may not exist in-house. You may also need experienced change managers to overcome internal resistance to the initiative. If you understand these gaps early on, you can develop training, hiring, and outsourcing plans to successfully address them.
- Evaluate and Choose a Cloud Provider: While most major cloud providers offer similar services and resources, you’ll want to evaluate more than one to determine if their exact services, pricing models, integrations, support, and compliance standards match up with your requirements.
- Define Your Cloud Strategy: Develop a comprehensive cloud strategy that aligns with your organization’s business and technical objectives. Outline how cloud technologies will support your operations, customer experience, and innovation. If you plan to leverage both public cloud and private cloud architecture, identify how you’ll optimize your workloads. This step will be critical to transformation in coming years, as cloud migration and hybrid cloud are two key strategies organizations plan to invest in within the next 12-24 months.
- Build Your Roadmap: Once you have your IT environment mapped out, a provider selected, and strategy defined, it’s time to build a roadmap. It’s generally a good idea to choose a pilot project to start with, something small and self-contained that can validate that your broader cloud strategy will help you achieve your goals. Document planned migration waves and create governance frameworks to establish policies for how IT resources will be provisioned, as well as how personnel will be assigned to certain steps in the transformation journey.
- Phase Workloads and Execute: Begin migrating workloads in logical phases, starting with low-risk or high-value applications. Use lessons learned from each phase to refine your approach. Ensure proper testing and monitoring tools and processes are in place to support performance throughout execution.
Make Your Cloud Transformation Seamless With TierPoint
Transforming takes time and the right team. If you’re looking to fill any skill gaps or bring in some extra help for a more seamless transition, TierPoint can help. We’ll take you from on-premises systems to new environments that will allow you to innovate, scale, and compete without legacy systems weighing you down.
Ready to jumpstart your digital transformation? Schedule a consultation today.
