Cloud computing is growing like mad, and on the verge of even greater adoption by enterprises of all sizes. Yet, despite the proliferation of services – from AWS and Azure to Google, Alibaba, Dropbox and Rackspace – there is no “one cloud to rule them all.” Organizations continue to direct their IT assets toward a hodgepodge of cloud providers, which – according to a study by 451 Research – presents both challenges and potentially lucrative opportunities for players in the Infrastructure-as-a-Service (IaaS) and on-premises private cloud markets. The company’s findings also indicate that cloud has gone full-on mainstream: 90 percent of organizations take advantage of it in some shape or form. Furthermore, due to ever-growing adoption rates, 60 percent of workloads are expected to be running within some form of hosted cloud environment by 2019, up from 45 percent in 2017. This represents a major pivot from on-premises and self-operated legacy IT towards cloud or hosted third-party IT services.
Digital transformation requires IT agility and business readiness
The days when IT was highly tailored and primarily operated on site are long gone. The fact that this model is no longer economically viable for many organizations is only one reason for this. Another factor is that organizations opting for cloud computing are seeking greater agility, innovation and more intense collaboration. The drivers are different than they used to be.
According to Innosight, 75 percent of the S&P 500 companies will be replaced by new players by 2027, as highlighted in IDC’s Worldwide Data Services for Hybrid Cloud Taxonomy Report 2017. That is an astonishing turnover that would have been inconceivable in previous decades, and it only highlights the urgent need for strategic thinking and adaptation by existing enterprises that are playing the long game.
“Digital disruption is real. To survive, companies need to embrace and accelerate DX [digital transformation],” says Ritu Jyoti, the research director of IDC’s storage team. “Leading digital organizations are exploiting data insights to deliver personalized value services, optimize customer experience, explore new opportunities, and reduce the overall cost of doing business. The world’s most admired and best-run businesses use IT for their competitive advantage. The groundbreaking agility, flexibility, and power of cloud computing has businesses exploring ways to adopt cloud functionality and economics. Hybrid cloud and multi-cloud deployments are becoming the new norm.”
Moving beyond infrastructure
As the cloud computing universe keeps expanding and gains maturity, more and more organizations are choosing to operate inside multi-cloud landscapes spread across a number of different service providers. At the same time, to take advantage of this trend, cloud providers are continuously sweetening their product offerings by introducing new X-as-a-Service models to the marketplace. Intelligent partnering and broad, flexible ecosystems will become increasingly important as the volume and complexity of cloud workloads expands and as vendors’ product/service portfolios grow beyond the use of cloud architectures for infrastructure purposes. In both the IaaS and on-premises private-cloud arenas, competitive differentiation is shifting away from the latest and greatest features and competitive pricing toward innovation and strategic visioning – especially as it relates to digital transformation – and bringing actionable business understanding to IT transformation.
The future of IT is multi-cloud and hybrid. Sixty-nine percent of respondents plan to implement some type of multi-cloud environment by 2019, according to 451 Research’s press release. While this is promising news for incoming and prospective cloud service providers, this growth will make optimizing and analyzing cloud expenditures increasingly difficult for companies. After analyzing the scope of Amazon Web Services (AWS), 451 Research discovered that the provider’s portfolio comprises more than 320,000 stock keeping units (SKUs).
This complexity is likely to increase even further. For instance, in the first two weeks of November 2017, AWS introduced more than 53,000 new SKUs. “Cloud buyers have access to more capabilities than ever before, but the result is greater complexity. It is a nightmare for enterprises to calculate the cost of computing using a single cloud provider, let alone comparing providers or planning a multi-cloud strategy,” says Dr. Owen Rogers, Research Director at 451 Research. “The cloud was supposed to be a simple utility like electricity, but new innovations and new pricing models, such as AWS Reserved Instances, mean the IT landscape is more complex than ever.”
Wanted: greater flexibility, less complexity
Flexibility has become the new pricing battleground over the past couple of months, with Google, Microsoft and Oracle all announcing new pricing options and models targeted at AWS. Analysts see a potentially lucrative opportunity for cloud vendors that can resolve this complexity by providing users with simplicity and low-cost prices.
Due to IT consumerization, multi-cloud scenarios that incorporate multiple providers are becoming the norm. But before going whole-hog on a multi-cloud architecture, it’s important for companies to clearly define a desired future scenario based upon their business goals and use cases. Many cloud and hosting providers now offer unique, and even use-specific hybrid cloud solutions. That’s why it’s essential for organizations to thoroughly investigate and assess all the available options before gleefully hopping aboard one of the many public cloud bandwagons. To boost efficiency and reduce complexity, companies should consider policies and decision frameworks that aim to simplify navigating the cloud landscape, bundle buying power and consolidate workloads.
As you plan the journey, make sure to include both business and technical requirements into your overall roadmap. Tight alignment between corporate strategy and IT capabilities is more likely to produce a well-designed multi-cloud landscape than a scenario in which planning is divorced from IT and old departmental silos remain intact. When you get them properly sorted out, your cloud services will help you unleash greater competitive advantage and put your business on a more solid foundation for the long term.