Why the organisations treating cloud migrations as transformation opportunities not IT chores are the ones pulling ahead in 2026
DISCLAIMER: I am not Nostradamus, nor do I have a time machine (though how good would that be). The predictions below are my own and, well, let’s be honest, predictable. I should also point out that I used AI to do some of the heavy lifting (at least from an analysis perspective).
This is the sixth and final post in my Six Tech Trends Shaping 2026 series. If you’ve been following along, thanks for sticking with me through agentic AI, governance frameworks, hybrid work redesigns, SaaS consolidation, and user-friendly security. If this is your first stop—welcome, and you might want to go back and read the others. Or don’t. I’m not your boss.
Part 1: Agentic AI Takes the Wheel in 2026
Part 2: AI Governance Will Stop Being Optional
Part 3: Hybrid Work Gets Its Second Act
Part 4: The Great SaaS Consolidation
Part 5: Security Will Finally Get User Friendly
I’ll admit it: I saved this one for last because it’s the topic closest to my heart. And yes, I’m aware that admitting you have strong feelings about migration strategies puts you in a fairly niche social category. But here we are.
For years, cloud migrations have been treated like moving house a necessary inconvenience you endure before getting on with your actual life. You pack everything into boxes (some of which haven’t been opened since 2014), haul it all to the new place, and then spend months wondering why you brought that filing cabinet full of obsolete compliance documents. The parallels are uncanny.
But in 2026, something meaningful is shifting. As I hinted in my original predictions piece, the organisations pulling ahead aren’t the ones who treat migrations as IT projects with a start date and a finish line. They’re the ones who’ve realised that how you migrate and why is fundamentally a business decision. The kind that belongs in the boardroom, not just the server room.
And the data backs this up. McKinsey has identified a trillion-dollar value opportunity in cloud adoption[1], yet only about 10% of cloud transformations capture their full value.[2] That’s a lot of money left on the table by organisations still thinking about migrations as purely technical exercises.
The Numbers Don’t Lie (But They Might Make You Wince)
Let’s start with the uncomfortable stuff. According to Gartner, around 83% of data migration projects either fail outright or exceed their budgets and timelines.[3] Cloud migration failure rates, depending on how you define “failure,” range from 30% to as high as 70%.[4] McKinsey found that migration inefficiencies cost the average organisation 14% more than planned, with a projected $100 billion in wasted migration spend over three years globally.[5]
Meanwhile, 38% of organisations struggle with integration challenges, 30% cite security concerns, and 25% face IT skills gaps during migrations.[6] A CIO Dive report found that 90% of CIOs have experienced at least one failed cloud migration project.[7]
If those numbers seem bleak, they should be but they also tell a story. The vast majority of these failures aren’t technical. They’re strategic. Organisations dive in without a clear business case, underinvest in change management, or treat the migration like a weekend renovation when it’s really a full architectural redesign. As Gartner has put it rather directly: use business drivers, not technical drivers, to propel your cloud strategy.[8]
Why Migrations Are Accelerating (Despite the Failure Rates)
Here’s the paradox: even with those sobering statistics, cloud migration is accelerating. Worldwide public cloud spending is forecast to reach $723.4 billion in 2025, up 21.5% year on year[9], and the cloud migration market itself is projected to grow from $232 billion in 2024 to over $806 billion by 2029.[10] Some 94% of enterprise organisations are already using cloud services in some form[6], and Gartner expects 90% to adopt hybrid cloud strategies by 2027.[9]
So why are organisations pressing ahead despite the risks? Because the business case has fundamentally changed. Migrations are no longer about saving money on server racks (though that’s nice). They’re about enabling the capabilities that the rest of this blog series has been covering: deploying agentic AI that needs cloud-native infrastructure, implementing the governance frameworks your regulators are demanding, powering the hybrid collaboration tools your workforce expects, and consolidating the SaaS sprawl that’s draining your budget.
In other words, migration isn’t separate from your broader technology strategy anymore. It is the strategy. And 81% of CIOs now agree that digital transformation only succeeds when integrated with cloud strategies.[6]
The Shift from Lift-and-Shift to Transform
Forrester has been blunt about this: the lift-and-shift era is over.[11] Simply relocating workloads to the cloud without rethinking how they operate delivers minimal business value and frequently creates new problems. Think higher-than-expected costs, performance issues, and security gaps that materialise because nobody asked, “Should we modernise this application before we move it, or are we just making the same mess in a different location?”
McKinsey’s research reinforces this point. Their European cloud study found that while 95% of companies claim to be capturing value from the cloud, 82% of executives admitted that beneficial impacts are either limited to specific areas, only partially realised, or still in early stages.[12] The culprit? A persistent fixation on IT-centric metrics, like the number of applications migrated, rather than genuine business outcomes like revenue growth, customer experience, or operational agility.
The organisations getting this right in 2026 are the ones that treat every migration as an opportunity to modernise, streamline, and rethink. They’re asking not just “Where does this workload live?” but “Why does this workload exist? What business problem does it solve? And is there a better way to solve that problem in a cloud-native architecture?”
McKinsey’s data shows the payoff: companies that invest in a proper cloud foundation, rather than rushing to show early wins, see up to an eightfold acceleration in migration pace and a 50% reduction in long-term migration costs.[13] That’s not a marginal improvement. That’s a fundamentally different trajectory.
Data: The Asset You Forgot You Had
If there’s one thing I’ve learned from years of migration work, it’s this: nobody has clean data. Nobody. I’ve seen organisations sitting on terabytes of duplicated files, orphaned SharePoint sites that haven’t been touched since 2017, and email archives that would make a digital hoarder blush.
And it matters more than ever. Poor data quality affects 84% of migrations[14], and unnecessary data transfer adds 40–60% to migration timelines and 35–45% to costs.[14] Deloitte’s research found that 55% of organisations cite budget and cost concerns as the primary obstacle to data modernisation, with 44% struggling with a lack of understanding of the technology itself.[15]
In 2026, the organisations getting ahead are the ones that use migration as a forcing function for data hygiene. This means taking the time before any migration to audit what you’re actually moving, classify it, clean it, and crucially decide what you can leave behind. Think of it as decluttering before the move rather than paying to ship boxes of junk to a more expensive storage location.
This is especially critical in the era of AI. Your AI tools are only as good as the data underpinning them. If you’re deploying Microsoft 365 Copilot or building custom AI agents (as we discussed in the agentic AI post), the quality, structure, and governance of your data ecosystem determines whether those tools deliver value or hallucinate confidently. Migration gives you the perfect and sometimes only opportunity to get your data house in order before the AI moves in.
The Change Management Gap
I could write an entire post about this (and honestly, I might). But here’s the short version: change management remains the most underinvested aspect of cloud migrations, and it’s responsible for a disproportionate share of failures.
Research consistently shows that organisational change management ranks among the top migration challenges, cited by 26% of organisations.[16] Competing IT projects and lack of expertise are even more prevalent, with 56% of organisations citing them as underlying drivers of migration failure.[16] As Deloitte’s cloud transformation team has observed, the most successful cloud transformations are the ones where leadership stays true to the original narrative and unifying vision and where people, not just technology, are at the centre of the transformation.[17]
This isn’t about sending a few emails telling people their inbox is moving. It’s about genuinely preparing your workforce for new ways of working, addressing fears about job changes, providing hands-on training that goes beyond “here’s a 45-minute webinar”, and establishing feedback loops so issues are caught early rather than erupting at go-live. Different stakeholders need different communication: executives need the strategic narrative, middle managers need operational details, and end users need to know who to call when something breaks at 9am on a Monday.
The Tenant-to-Tenant Reality
For those of us in the Microsoft 365 ecosystem, there’s a specific flavour of migration that’s growing rapidly: tenant-to-tenant migrations. CoreView’s 2025 research found that 78% of enterprises now manage more than one Microsoft 365 tenant[18], and with mergers, acquisitions, divestitures, and corporate restructuring showing no signs of slowing, the demand for clean tenant consolidation is only increasing.
Microsoft themselves have recognised this, launching a new tenant-to-tenant migration orchestrator in late 2025 that handles Exchange Online mailboxes, OneDrive files, and Teams chats and meetings natively.[19] It’s a welcome addition, but anyone who’s been in this space knows that tenant migrations involve far more than moving mailboxes. You’re dealing with identity consolidation, security policy harmonisation, information architecture redesign, compliance configuration, Power Platform dependencies, and perhaps most importantly the human side of bringing two organisations’ working cultures into a single digital environment.
I’ve seen organisations attempt tenant consolidations that looked straightforward on paper, only to discover nested identity conflicts, orphaned service accounts, and SharePoint permission structures that resembled abstract art more than governance. The lesson, as always: the complexity is in the details, and the details matter enormously.
The Global Picture: Sovereignty, Geopatriation, and the New Migration Calculus
Here’s where the migration conversation gets genuinely fascinating in 2026. Gartner has identified “geopatriation” as one of its top infrastructure and operations trends for 2026[20] the strategic relocation of workloads from global cloud hyperscalers to regional or national alternatives due to geopolitical uncertainty. This is not the same as cloud repatriation (moving back on-premises). It’s about moving to where your data lives, not just whether it’s in the cloud.
The numbers are striking. Gartner predicts that by 2030, over 75% of enterprises outside the US will have a formal digital sovereignty strategy.[21] A survey of 241 Western European CIOs found that 61% expect geopolitical factors to increase their reliance on local or regional cloud providers[22], while 53% believe geopolitics will restrict their future use of global cloud providers. Sovereign cloud IaaS spending is forecast to hit $80 billion in 2026, a 35.6% jump from 2025.[23]
In Europe, regulatory frameworks like DORA and the NIS2 Directive are mandating local control for critical infrastructure and financial services. Germany’s state of Schleswig-Holstein, the Danish digitalisation agency, and the Austrian army are moving away from US-based cloud solutions entirely.[22] In the Asia-Pacific region, Gartner projects an 87% growth in sovereign cloud IaaS spending in 2026 alone[23], driven by India’s Digital Personal Data Protection Act, China’s Cybersecurity Law, and increasing data residency requirements across Southeast Asia.
For Australian organisations, this trend hits close to home. Data residency expectations, combined with the Australian Government’s Hosting Certification Framework and the Security of Critical Infrastructure Act, mean that migration planning in 2026 must factor in where data resides as a first-class consideration, not an afterthought. The good news is that Microsoft’s Australian data centre regions provide strong local options within the Azure and Microsoft 365 ecosystem, but organisations still need to think carefully about cross-border data flows, particularly when operating across the Asia-Pacific region.
The UK, interestingly, appears less concerned about sovereignty than continental Europe, with Gartner noting closer technology adoption alignment with the US.[22] This creates a nuanced picture for multinational organisations: your migration strategy may need to accommodate fundamentally different sovereign requirements depending on which jurisdictions your operations span.
What AI Changes About Migrations
AI isn’t just a workload you’re migrating—it’s increasingly a tool that changes how migrations themselves get done. And it’s reshaping the business case for migration in significant ways.
Gartner predicts that 50% of cloud compute resources will be devoted to AI workloads by 2029, up from less than 10% today.[24] That fivefold increase means organisations migrating to cloud in 2026 aren’t just moving existing workloads, they’re building the foundation for AI capabilities that don’t yet exist. McKinsey’s research suggests that generative AI can multiply a company’s cloud ROI by as much as seven times[12], but only when the underlying data infrastructure is sound.
This creates a compelling, if slightly anxiety-inducing case, for treating migration as a strategic priority. Every month you delay modernising your data foundations is a month you’re postponing AI capabilities that your competitors may already be deploying. The organisations that treat their 2026 migration as “just an IT project” are going to find themselves playing catch-up when their board starts asking why the AI tools aren’t delivering results.
On the flip side, AI is making the migration process itself more intelligent. AI-powered tools are emerging for automated data classification and cleansing, intelligent workload mapping and dependency analysis, predictive risk assessment for migration waves, and automated testing and validation post-migration. These capabilities don’t eliminate the need for human expertise and judgement, you still need people who understand the nuances of your specific environment, but they’re dramatically reducing the manual effort involved in the grunt work.
What Should You Actually Do?
Right. Enough diagnosis, let’s talk treatment. Here’s what I’d genuinely recommend if you’re heading into a migration in 2026:
Start with a business case, not a technical assessment. Before anyone inventories servers or maps application dependencies, get alignment on why you’re migrating and what business outcomes you expect. If “because our data centre lease is expiring” is your primary driver, you’re setting yourself up for a technically successful but strategically hollow migration.
Invest in data hygiene before you move anything. Audit your data, classify it, clean it, and decide what to archive or retire. Yes, this takes time. But migrating dirty data into a shiny new environment just gives you dirty data with a higher monthly bill.
Budget for change management. Not as a line item that gets cut in the first round of budget revisions, but as a funded, staffed, ongoing programme that starts before the migration and continues well after go-live. If you’re spending 95% of your budget on technology and 5% on people, you’re going to have a bad time.
Factor in sovereignty from day one. If you’re operating across multiple jurisdictions and in 2026, that includes many mid-market organisations, data residency and regulatory compliance need to be baked into your migration architecture, not bolted on after someone reads an alarming news article about the EU AI Act.
Think in waves, not big bangs. Phased migrations let you learn from early waves and apply those lessons forward. They also reduce the blast radius when things go wrong and things will go wrong, because they always do. The question is whether “went wrong” affects 50 users or 5,000.
Build your AI foundation while you migrate. If you’re migrating to Microsoft 365 or Azure in 2026, you’re building the platform that AI tools like Copilot will operate on. Design your information architecture, permissions model, and data governance with AI readiness in mind. It’s infinitely easier to get this right during migration than to retrofit it later.
Measure business outcomes, not just migration milestones. Don’t just track how many mailboxes you’ve moved. Track what the migration is enabling: faster time to market, reduced operational costs, improved collaboration, better security posture. McKinsey found that 71% of organisations still measure cloud impact primarily through IT improvements, rather than genuine business outcomes.[12] Be in the other 29%.
Where Insentra Comes In
Look, I told you at the start of this series I’d get biased when we reached migration territory, and here we are. But if there’s one thing Insentra has built its reputation on, it’s this: we know migrations. Deeply. Obsessively. To the point where our team dreams in PowerShell scripts and Exchange Online migration batches. (I wish I were joking.)
We’ve delivered hundreds of Microsoft 365 migrations, tenant-to-tenant consolidations following mergers and acquisitions, complex email archive migrations, large-scale SharePoint and OneDrive relocations, and full-stack infrastructure transformations. We’ve developed a robust methodology that addresses the full migration lifecycle: assessment and planning, identity and security design, data migration and validation, user enablement, and post-migration optimisation. We don’t just lift and shift; we provide improvements to your infrastructure at the same time, implementing better governance, security, and information architecture as part of the migration itself.
For organisations navigating the data sovereignty landscape, our global experience delivering migrations across Australia, Asia-Pacific, Europe, and North America means we understand the regulatory nuances of operating Microsoft 365 environments across jurisdictions, whether that’s Australian data residency requirements, European sovereignty mandates, cross-border data flow considerations, or the specific compliance frameworks that govern your industry.
And if your migration is the catalyst for broader AI readiness as it increasingly should be our AI Sprint Series helps organisations build the data foundations, governance frameworks, and strategic roadmaps needed to deploy AI tools like Microsoft 365 Copilot effectively. Because the best time to get your AI foundations right is during the migration itself, not six months after you’ve settled in.
The Bottom Line
This is the sixth and final post in this series, and it feels fitting that we’re ending on migration. Because in many ways, migration is the thread that connects everything we’ve discussed: you can’t deploy agentic AI on infrastructure that’s stuck in 2018. You can’t govern AI tools properly without clean data foundations. Hybrid work demands cloud-native collaboration platforms. SaaS consolidation requires a clear architectural vision. And user-friendly security needs a modern identity and access framework.
Migration isn’t the boring prerequisite to the interesting stuff. In 2026, migration is the interesting stuff, if you approach it as the strategic opportunity it actually is.
The organisations that understand this won’t just move to the cloud. They’ll transform how they operate, compete, and deliver value. And in a year defined by AI acceleration, regulatory complexity, and geopolitical uncertainty, that transformation capability isn’t a nice-to-have. It’s the difference between leading and scrambling.
If you are planning a migration in 2026 and want it to deliver real business outcomes, not just a technical relocation, contact us to design a strategy that builds in modernisation, governance, AI readiness, and long-term value from day one.
Thanks for reading this series. If even one of these posts helped you think differently about your 2026 strategy, then my PowerShell-scripting, migration-obsessed brain considers that a win.
Dan Kregor | Insentra
Making enterprise tech transformations slightly less terrifying since… well, for quite a while now!
Sources
[1] McKinsey – Cloud-migration opportunity: Business value grows, but missteps abound. https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/cloud-migration-opportunity-business-value-grows-but-missteps-abound
[2] McKinsey Digital – Cloud Insights: Only 10% of cloud transformations achieve their full value. https://www.mckinsey.com/capabilities/mckinsey-digital/cloud/cloud-insights/all-insights
[3] Gartner (via Kanerika/Insentra) – 83% of data migration projects either fail outright or exceed their budgets and timelines. https://medium.com/@kanerika/top-data-migration-challenges-how-to-overcome-them-8ac0fa02ab07
[4] Gartner – Nearly 70% of data migration projects fail to meet their objectives. Cloud migration failure rates range from 30–70%. https://www.epiuse.com/aws-services/blogs/why-over-75-of-cloud-migrations-fail
[5] McKinsey – Migration inefficiencies cost the average company 14% more than planned; $100 billion in wasted migration spend projected over three years. https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/cloud-migration-opportunity-business-value-grows-but-missteps-abound
[6] DuploCloud – Cloud Migration Statistics: Key Trends, Challenges, and Opportunities in 2025. 94% of enterprises use cloud services; 81% of CIOs link digital transformation to cloud strategy. https://duplocloud.com/blog/cloud-migration-statistics/
[7] CIO Dive – Why do cloud migrations fail? 90% of CIOs have experienced failed cloud migration projects. https://www.ciodive.com/spons/why-do-cloud-migrations-fail/600946/
[8] Gartner – Public Cloud Migration Strategies: Use business drivers to propel your cloud strategy. https://www.gartner.com/en/articles/public-cloud
[9] Gartner – Worldwide public cloud spending forecast to reach $723.4 billion in 2025; 90% hybrid cloud adoption by 2027. https://www.thestack.technology/gartner-cloud-repatriation/
[10] IBM – Cloud migration market projected to grow from $232.51 billion in 2024 to $806.41 billion by 2029. https://www.ibm.com/think/topics/microsoft-tenant-to-tenant-migration
[11] Forrester – The Forrester Wave: Application Modernization and Multicloud Managed Services, Q1 2025. The lift-and-shift era has ended. https://www.forrester.com/blogs/introducing-the-forrester-wave-application-modernization-and-multicloud-managed-services-q1-2025/
[12] McKinsey (via IT Pro) – European cloud study: 95% claim value capture, but 82% admit impacts are limited or partial. 71% measure impact through IT improvements only. https://www.itpro.com/cloud/cloud-computing/mckinsey-businesses-are-too-focused-on-it-upgrades-when-trying-to-make-cloud-work
[13] McKinsey – Companies with solid cloud foundations see eightfold acceleration in migration pace and 50% reduction in long-term costs. https://cloud-computing.tmcnet.com/breaking-news/articles/454197-laying-foundation-cloud-transformation-related-economics-roi.htm
[14] Cloudficient – 10 Data Migration Challenges: Poor data quality affects 84% of migrations; unnecessary data transfer adds 40–60% to timelines. https://www.cloudficient.com/blog/10-common-data-migration-challenges-and-how-to-overcome-them
[15] Deloitte Insights – Data modernisation and cloud migration: 55% cite budget concerns as primary obstacle; 91% primarily store data on cloud. https://www2.deloitte.com/us/en/insights/topics/analytics/data-modernization-and-cloud-migration-initiatives.html
[16] Soocial – 18 Cloud Migration Failure Statistics: 56% cite competing IT projects and lack of expertise; 26% cite organisational change management. https://www.soocial.com/cloud-migration-failure-statistics/
[17] Deloitte – In cloud transformation, the cloud is just the beginning: Successful transformations keep people and leadership vision central. https://www.deloitte.com/global/en/services/consulting/blogs/cloud-adoption-summit.html
[18] CoreView – 2025 State of Microsoft 365 Security: 78% of enterprises manage more than one Microsoft 365 tenant. https://www.coreview.com/blog/microsoft-365-tenant-to-tenant-migration-a-comprehensive-guide-for-it-leaders
[19] Microsoft – Migration Orchestrator: Tenant-to-tenant migration for Exchange Online, OneDrive, and Teams (public preview, December 2025). https://learn.microsoft.com/en-us/microsoft-365/enterprise/migration-orchestrator-1-overview
[20] Gartner – Top Trends Impacting Infrastructure and Operations for 2026: Geopatriation identified as key trend. https://www.gartner.com/en/newsroom/press-releases/2025-12-11-gartner-identifies-the-top-trends-impacting-infrastructure-and-operations-for-2026
[21] Gartner (via AI & Data Insider) – By 2030, 75% of enterprises outside the US will have a formal digital sovereignty strategy. https://aidatainsider.com/data/geopatriation-for-cloud-sovereignty/
[22] Gartner – Survey of 241 Western European CIOs: 61% expect geopolitics to increase reliance on local cloud providers; 53% expect restrictions on global providers. https://www.gartner.com/en/newsroom/press-releases/2025-11-12-gartner-survey-reveals-geopolitics-will-drive-61-percent-of-cios-and-information-technology-leaders-in-western-europe-to-increase-reliance-on-local-cloud-providers
[23] Gartner – Worldwide sovereign cloud IaaS spending forecast to total $80 billion in 2026, a 35.6% increase; Asia-Pacific growth at 87%. https://www.gartner.com/en/newsroom/press-releases/2026-02-09-gartner-says-worldwide-sovereign-cloud-iaas-spending-will-total-us-dollars-80-billion-in-2026
[24] Gartner – 50% of cloud compute resources devoted to AI workloads by 2029, up from less than 10% today. https://www.gartner.com/en/newsroom/press-releases/2025-05-13-gartner-identifies-top-trends-shaping-the-future-of-cloud
