Cloud 2.0: Companies Move From Cloud-First to Cloud-Only

Recent comments by IDC Chief Analyst Frank Gens argue that cloud computing has now reached a tipping point because adoption is “moving beyond experimentation toward mass enterprise adoption.”1 The numbers on cloud adoption, as reported by Network World, are striking. Gens predicts that by 2018,  60 percent of enterprise IT workloads will be off premises, and 85 percent of enterprises will commit to a multi-cloud architecture model (80 percent by 2017). By 2020, more than 70 percent of cloud service provider revenues will be mediated by channel partners/brokers.

Gens’ projections paint a clear picture: more public clouds, a multi-cloud architecture as the enterprise norm, and a channel that evolves to help companies move to that model. As cloud technology moves into the mainstream, enterprises are asking important questions: How do we move to a multi-cloud infrastructure? What are the main barriers? How long will it take?

Speed, Agility, and Cost Savings

Cloud computing is more than a decade old now. Companies that initially tested non-critical workloads in public clouds are increasingly moving mission-critical workloads to the cloud. Businesses across all industries, and in all parts of the world, see the value of operating in the cloud. According to the September 2016 Forrester report, The Public Cloud Services Market Will Grow Rapidly To $236 Billion In 2020:

  • Revenue from public cloud platforms, business services, and applications (software-as-a-service [SaaS]) will grow at an overall CAGR of 22% between 2015 and 2020,
  • Public cloud revenue is expected to hit $146 billion by the end of 2017, and is
  • on its way to $236 billion by 2020.

But moving to the cloud without forethought and a clear strategy can be problematic. Cloud silos, unexpected costs, and single vendor commitment are all issues common to migrating to the cloud too quickly or without a clear institutional goal. For example, it’s not uncommon for a large company to run up multiple cloud bills—by several lines of business simultaneously investing in public cloud technologies—without any central corporate oversight. The result is an enormous sum to a single vendor, and often the IT leadership doesn’t know about it.

Why Multiple Clouds?

The big public cloud companies—Amazon, Microsoft, Google, and IBM—have begun to differentiate themselves in price and expertise. Businesses will want multiple cloud vendors for specific uses. And for most large enterprises, there remains a need for both public and private clouds.

Companies often prefer to keep the most sensitive data, trade secrets, and intellectual property in a private cloud they can control. Likewise, highly regulated industries, such as government, financial services, and healthcare, utilize private clouds to protect sensitive information. And for most companies, legacy systems and apps are best suited to a private cloud.

Researchers at Gartner concur, “Most organizations are already using a combination of cloud services from different cloud providers. While public cloud usage will continue to increase, the use of private cloud and hosted private cloud services is also expected to increase at least through 2017. The increased use of multiple public cloud providers, plus growth in various types of private cloud services, will create a multicloud environment in most enterprises and a need to coordinate cloud usage using hybrid scenarios.”2

Cloud 2.0

Companies have moved from a cloud-first to a cloud-only strategy. The new industry standard is multiple clouds, both public and private. This next stage will bring its own challenges, but vendors that make it easier for companies to run, manage, connect, and secure their applications across clouds and devices in a common operating environment will be well-positioned for success and future growth.

1IDC, Worldwide and Regional Public IT Cloud Services Forecast, 2016-2020, December 2016

2Gartner, Market Trends: Cloud Adoption Trends Favor Public Cloud With a Hybrid Twist,  04 August 2016