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Even before the global COVID-19 pandemic, a multi-cloud IT strategy was becoming the new norm. In February this year, IDC noted that multi-cloud implementations accounted for 64% of cloud adoptions, against 28% for single cloud. A recent survey for Dell and VMware by IDG found that companies across EMEA were using, on average, five different cloud environments, with larger enterprises more likely to exceed that and the most enthusiastic using an average of over eight clouds.
Multi-cloud is taking off for a range of reasons. IDG’s 2020 Cloud Computing Study saw respondents looking for best-of-breed platform and service options, greater cost savings and optimisations, and improved disaster recovery and business continuity. It seems that many businesses have been successful in reaching their cloud goals, too. The Dell and VMware survey found that 92% of companies surveyed were deriving greater value from enterprise data as a result of their cloud investments, while 74% were seeing improvements to customer experiences. Two-thirds were finding that the cloud was helping them control their TCO. Among all these cloud users, the largest and most advanced were often those who were most successful in meeting their cloud objectives.
CIOs are feeling the benefits.
“The hard work of the past 20 years means that the underlying technology is no longer where you need to spend your time and effort,” said Amnesty International CIO John Gillespie in a recent interview. “The move to the cloud has liberated me and my colleagues from hands-on managing a lot of technology.”
Gideon Kay, CIO at Japanese-owned global marketing firm, Dentsu Aegis Network, concurs. “What I’m looking to do with our transition to cloud is to repurpose and refocus our people on more of the value-add and less on managing the commodity and the engine room,” he told CIO.
However, the COVID-19 crisis has created real disruption, pushing CIOs and IT leaders to re-evaluate their IT priorities. Organisations that were prepared to make large investments on technologies that could drive innovation and disruption are now thinking more about business continuity and minimising their operating costs. A recent survey by IDG on post COVID-19 IT spending found that cost control and expense management was now the number one concern for CIOs. Previous high priorities, such a driving business innovation and leading change efforts, have drifted midway down the list.
This doesn’t mean that organisations are abandoning the cloud. After all, the Dell and VMware survey found that 88% of enterprises believed that cloud reduced their IT operations costs by an average of 26%, while 68% agreed that it enhanced their business’s resilience. What’s more, while the pandemic has driven a reduction in IT spending overall, cloud spend has avoided the hit. IDC’s figures for Q1 2020 saw public cloud spend increase by 6.4%, and IDC still expects spending on cloud infrastructure to overtake spending on non-cloud infrastructure this year. Gartner expects spend on cloud services to grow by as much as 19%, with the spending levels it projected for 2023 and 2024 now coming forwards to 2022.
What is happening, though, is that CIOs and IT leaders are looking in more detail at their cloud investments and rethinking. They’re wondering whether cloud projects that promised cost efficiencies and increased capabilities have really delivered lower costs and ROI. Meanwhile, the proportion of organisations that ‘panic bought’ cloud services in response to the pandemic – particularly cloud collaboration tools – will soon be thinking seriously about whether yesterday’s short-term fix could be tomorrow’s source of cost and complexity.
For some, this will mean moving key workloads to a new provider. They might even shift to find a service that can better balance costs with increased demand, as Zoom did when it moved its core services from AWS to Oracle Cloud. In other cases, the move may be to repatriate workloads running on public cloud to on-premises infrastructure or hosted private cloud.
Cloud repatriation is not a new concept. In 2019 IDC predicted that up to 50% of public cloud workloads would be repatriated to on-premises infrastructure or private cloud, driven by a mix of security, performance and cost issues. Services that work economically for highly scalable, compute-focused workloads can see costs explode when storage requirements mount up. Organisations that have taken a ‘lift and shift’ approach to business applications can find that they don’t perform at scale, and that attempts to modernise don’t always bear fruit. “This does not mean that the cloud is expensive,” IDC analyst Sriram Subramanian told CIO, “it means that [some companies] haven’t leveraged the best migration path for that workload.”
The key thing for organisations isn’t to start bringing workloads back from the cloud as a knee-jerk reaction, but that they evaluate where and how they run them.
Garner VP Analyst, Elias Khnaser, calls this “continuous workload placement analysis”. This, he explains, “involves reassessing workloads at a regular cadence, evaluating whether the current execution venue sufficiently meets the organisation’s needs, and if migrating to an alternative model provides higher value without adding significant risk.”
For some workloads this could mean repatriation, particularly where there are substantial savings to be achieved. For instance, the craft brewer New Belgium Brewing migrated its core applications from an off-premises managed cloud to on-premises Dell EMC PowerEdge servers, providing the foundation of a hyperconverged infrastructure (HCI) stack that could scale with more predictable costs. Other workloads may be easier to troubleshoot or optimise performance on a private cloud, or there may be specific security and compliance requirements which on-premises infrastructure will be better equipped to meet.
Yet there will still be many workloads where public cloud is the optimal choice, especially in the unpredictable conditions of the post COVID-19 landscape. “The flexibility and agility of cloud solutions, the ease of provisioning and scaling new resources, but also the ability to shut down what is not needed and only pay for what is used, is a perfect fit for the current uncertainty,” argue IDC analysts Carla Arend and Archana Venkatraman in a recent blog post.
This is where the strength of a hybrid IT model, making full use of both cloud and HCI, comes through, empowering organisations to repatriate where necessary, run in the cloud where advantageous, and choose the most appropriate platform for each workload. CIOs and IT leaders face some tough decisions ahead, both on where they invest and build for the future, and where they need to drive down costs. However, the best decision they can make at the earliest stage is to adopt an operating model and infrastructure that still gives them real choice in the future.
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