The majority of companies are “all-in” on the cloud but over half have failed to realize the true value of that move, according to a recent PwC survey. However, the value gap is closing as organizations start to evolve from cloud migration toward modernization and innovation.

The PwC survey of 524 corporate executives, including CIOs, CTOs, CISOs, and board members for its U.S. Cloud Business report, found that while 92% of organizations have begun to migrate operations to the cloud, 53% of the respondents expressed a gap in realizing substantial value from their cloud investments. Business executives listed improved resiliency and agility, better decision-making, and product and service innovation as their pursued outcomes through the cloud, but few companies are positioned to fully deliver on expectations, according to the survey.

“That’s what we term the value gap,” Jenny Koehler, U.S. cloud and digital leader at PwC, explained in an interview with SDxCentral. And one of the causes is an inability to measure the return on the cloud investments, which combines a lack of clear business cases at the outset and long-term use cases that “stand the test of time and a degree of specificity of what an organization is trying to achieve,” she added.

Organizations will realize this value only when they begin using the cloud to build intimacy between customers, employees, and executives, Koehler said, adding that achieving a higher degree of intimacy with customers requires continued modernization and innovation with new products, services, and experiences.

“If we look ahead to 2022 and beyond, the degree of building connectedness between employees with customers will become the front here … and we'll start to change the conversation on the value gap over time.”

The lack of use cases is also due to organizations still being in the infancy stage of their cloud journey. Koehler expects a shift to modernization and innovation in the cloud will “start to unlock an increasing degree of value that perhaps just simple migration of workloads and data to the cloud may not yield in quite the same way.”

Koehler explained that the cloud migration process is defined as Cloud 1.0; the cloud modernization as Cloud 2.0; and Cloud 3.0 indicates the “enhanced muscle around innovating” such as cloud-native app developments.

“That's the journey that we're on,” she said. “Then as we continue to move toward hybrid working models, the cloud will continue to only be pushed out of that relatively-immature 1.0 state into more of the innovation state, intimacy with customers will drive a large part of that.”