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The cloud is ubiquitous: according to Gartner, public cloud spending is expected to reach $ 396 billion in 2021 and rise 21.7% to $ 482 billion in 2022. And by 2026, Gartner predicts that public cloud spending will exceed 45% of all corporate IT costs, from less than 17% in 2021.
But how well do companies fully understand the potential benefits of the cloud – and the possible limitations – as they race to migrate? In an evolving, complex landscape, current offerings from major cloud players may not allow for the important combination of flexibility and control that today’s organizations expect. At the same time, as companies embark on the path to digital transformation, the number of enterprise applications they use is growing in each department.
This means that companies may need to review and re-evaluate common cloud strategies, as well as rethink some of their investment decisions. For example, businesses may increasingly not want to be locked into using a company’s software and are increasingly inclined to use open source software. The growing number of open source cloud software services offer competitive alternatives to companies’ own portfolios for public cloud infrastructure.
As a result, the form of cloud services – and the issues that organizations need to consider – is changing. Here we look at the general assumptions about cloud strategy and what organizations need to consider in order to take full advantage of the cloud.
Assumption: Migrating to the cloud will reduce costs and increase security
Two of the biggest arguments for migrating to the cloud are the ability to reduce overall IT costs and take advantage of better security controls. However, although there is potential for cost savings, in many cases organizations pay extra for convenience and costs can accrue. For example, ready-made cloud services are typically more expensive than self-hosted on-premises infrastructure if managed as legacy IT infrastructure. In the cloud, companies pay for the flexibility to provide, secure, and scale quickly, and have the ability to use that flexibility to reduce costs.
This has led to repatriation to the cloud: in 2019, IDC estimates that up to 50% of public cloud workloads will be repatriated to local infrastructure or private cloud to use the best option for specific workloads.
In terms of security, the cloud can have more complex controls that are easier to implement than the local infrastructure. However, the decentralized nature of the public cloud can open up a more complex security position – one over which the organization may not have sufficient control. A recent IDC study found that almost every company has experienced some kind of cloud data breach. This means that businesses need to consider and evaluate the goals of their IT security environment in each area of the cloud stack.
Assumption: Adhering to a cloud provider is best for business
While it may be convenient, many enterprise-level organizations find that the standard box model of a major cloud provider does not meet its flexibility needs. Sophisticated IT organizations can find opportunities to optimize both costs and time to market by flexibly shifting workloads between cloud service providers and between the cloud and on-site.
It is also important to understand that the ‘cloud provider’ is not limited to the big three cloud infrastructure providers – over time, more and more ISVs are becoming cloud providers on their own. For example, an advanced database user can rely on high performance, complex behavior, and advanced configurations that are not available in managed provider provider offerings. In addition, if this advanced database user uses an open source database such as PostgreSQL, they are likely to want this area of their stack to be served by a provider that is a core database company rather than an infrastructure company that handles hundreds of other applications and services. Today, thanks to the trend towards cloud services, organizations can regain more control over the deployment of their databases in the cloud.
Finally, while hybrid architectures can reduce costs and increase flexibility, the data-driven nature of enterprises today presents additional challenges. Moving data and databases is difficult and time consuming and can be a particular challenge to withdraw and withdraw from your own cloud data services. Independent cloud service providers can facilitate cost savings by separating services from cloud providers, which provides the freedom and flexibility provided through a cloud-independent approach.
Assumption: The cloud is a mature landscape that will not change
The cloud is one of the fastest growing areas of IT spending in various industries. But while research shows that 92% of IT environments are already at least partially in the cloud, corporate cloud adoption remains in the early stages of what will be a profound transformation for all businesses. Far from a mature, static landscape, cloud technology is constantly evolving.
One significant technological change in the cloud over the last decade has been the sustained, dramatic reduction in computing and infrastructure costs. Creating development tools and using programming languages has also become easier, which has allowed development tools to go beyond the reach of IT professionals, extending to the rest of the organization.
Finally, as organizations prioritize the return of control over the convenience of a public cloud, technical expertise in the cloud in different areas has spread to different service providers. These providers are becoming increasingly creative with how to build a cloud service offering – as a database as a service – that separates itself from the public cloud infrastructure and changes the definition of the managed service.
The evolution of the cloud: a balancing act
Although there is incredible growth and a huge amount of energy and discussions about the cloud, it is still relatively early in the evolution of the cloud. What changes when organizations emerge from the early stages of cloud adoption is that companies want to regain higher controls instead of being tied to a single cloud provider. This leads to a multi-cloud approach that involves a more dynamic deployment between traditional on-premises and public cloud: according to a 2020 Gartner survey, end-user shopping in the cloud, 76% of respondents reported using more than one cloud provider.
New independent software vendors are entering this emerging, evolving landscape, changing the form of managed services to reflect customer needs and offer more expertise in specific cloud areas and open source platforms. Ultimately, as cloud services go through this separation process and move away from the monolithic architecture, cloud strategy efforts will become a balancing act between control and convenience. Companies need to consider strategically which services to use from large cloud providers and which services can be offered by independent cloud providers with the necessary experience.
This article was created by Insights, the personalized content of the MIT Technology Review. Not written by the MIT Technology Review.
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