dcsimg
RealTime IT News

Growth of Enterprise Cloud Adoption Not Slowing Down

Enterprise cloud adoption has been ramping up for some time, an ongoing acceleration that has only gotten faster during the COVID-19 pandemic.

Analysts at Synergy Research Group have tracked cloud spending worldwide for years and are finding a consistently upward trend. In February, they noted that in the fourth quarter of 2020, enterprise spending on cloud infrastructure services – including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and hosted private clouds – came in at more than $37 billion, $4 billion more than the third quarter and up 35 percent year-over-year.

Cloud market doubles in two years

Overall, it has taken only nine quarters for the cloud infrastructure market to double in size, with cloud providers like Microsoft Azure, Google Cloud and Alibaba all showing steady market growth against the dominant Amazon Web Services (AWS).

More recently, IT management solutions vendor Flexera this week released the 10th edition of its annual State of the Cloud report, which included a survey of 750 technical professionals from around the world. The results reinforced what others are seeing in the market: enterprises are rapidly embracing multicloud and hybrid cloud strategies, adoption of public clouds is ramping up, and the pandemic has only accelerated organizations' cloud plans.

"COVID-19 has accelerated the migration to cloud computing," Flexera President and CEO Jim Ryan said in a statement. "Still, cloud isn't magic or the land of milk and honey. Companies are moving fast, facing challenges, and trying to connect cloud computing to business outcomes."

Ryan added that his company's report shows that the "appetite for digital transformation is high, but real-world challenges – such as managing security and optimizing cloud spend – still must be addressed."

Further reading: IBM, Lenovo Push Cloud Services, Devices to the Edge

Cloud use around 90%

According to the report, 92 percent of enterprises have a multicloud strategy, while 80 percent are adopting hybrid clouds. On average, they are using 2.6 public clouds and 2.7 private clouds. In addition, 36 percent of respondents spend more than $12 million a year on public clouds and 55 percent of enterprise workloads are expected to be in public clouds in 12 months.

Ninety percent expect cloud use to exceed prior plans because of the pandemic. That makes sense to Bob O'Donnell, principal analyst for TECHnalysis Research, noting the rapid shift to working from home brought on by the coronavirus outbreak.

"A lot of this is just pandemic-related," O’Donnell told InternetNews. "One of the things the pandemic has done is it forced people to remotely manage their workloads, even if they were in their own data center. Once they got past the psychological barrier of, 'I guess we can do this,' that broke down some walls and some fears around whether they could do that. There are a lot of more conservative companies or even more advanced companies that maybe have particular workloads they didn't think they could ever put this in the cloud. Then they were forced to even though it was essentially their own cloud. They were remotely controlling and managing all of this stuff, so once they did that, there was a sense of, 'Well, yeah, this is doable.'"

Security, data science use cases

There also are myriad factors to consider, he said. In an increasingly complex IT world, enterprises are turning to the cloud to help bridge the yawning skills gap they face in-house in such areas as data science and security. Security is an especially interesting part of the equation: Organizations are moving to the cloud in part to take advantage of the security benefits even though security concerns have been a key impediment for some to move more quickly to the cloud.

The cloud also is becoming the primary vehicle for enabling many enterprises to embrace and leverage emerging advanced technologies like artificial intelligence (AI), machine learning and analytics, and tech vendors are releasing tools for the cloud that are improving in their capabilities. 

"Everybody is talking about hybrid cloud now, " O’Donnell said. "Even if you were a traditional Dell [customer] and just buy Dell servers and stick them in your data center, Dell's talking about hybrid cloud, or IBM or whomever. All of these guys are focused on hybrid clouds, so the tools have gotten better."

Vendors step up

In recently weeks, vendors have made moves to bolster their cloud capabilities. Hewlett Packard Enterprise in February announced plans to buy CloudPhysics and its cloud assessment tools and, more recently, this week unveiled a series of updates to its GreenLake hybrid cloud portfolio, including new cloud services for managing virtual machines (VMs), containers and bare metal environments and agreements with major channel players like Ingram Micro, Synnex and Arrow Electronrics to expand the reach of GreenLake services.

Dell this week rolled out an updated version of its Dell Hybrid Client software to include hybrid cloud management for fast and easy access to applications and data whether on user devices or in public or private clouds. VMware and Nvidia, which in September 2020 announced an alliance to create a hybrid cloud platform for running AI workloads based on VM software and GPUs, this week added to the plans by announcing Nvidia’s new Enterprise AI software stack that is available and supported exclusively on the latest update of VMware’s vSphere hybrid cloud platform, vSphere 7 Upgrade 2.

Microsoft, which in January announced that in the last three months of 2020 its cloud revenue grew 34 percent year over year to $16.7 billion, earlier this month added machine learning capabilities to its Azure Arc management solutions. In a nod toward the rapidly increasing demand for cloud services, Microsoft is continuing to grow the number of cloud data centers it is running, including announcing plans for another data center region in Georgia and two new data centers in the Chicago area at a cost of $200 million. The world’s second-largest cloud provider also is building more data centers in such locations as Spain, Poland, Israel and New Zealand.

Optimizing cloud costs

That growing demand won’t abate anytime soon. According to Flexera’s report, 61 percent of enterprises plan to optimize their cloud costs this year – the fifth year in a row that doing so is the top initiative – and 59 percent plan to focus on cloud migration.

Cloud spending continues to be a challenge for enterprises, with managing such spending a top hurdle for 79 percent of survey respondents. In addition, they worry that 30 percent of their cloud spend is being wasted. Managing the public cloud environments also can be difficult, according to TECHnalysis’ O’Donnell.

"That is messy, but at the same time, the multicloud thing is interesting because there's the point of, 'I don't want to be dependent on a single cloud company because I want to have flexibility. And theoretically, that gives me leverage from a pricing perspective,'" he said. "And again, you've got tools being developed by not only each of the individual cloud owners, but lots of other folks that allow me to easily transfer workloads from cloud to cloud. Google was first with Anthos, but you've got other people who are able to essentially provide this ability to support cloud workloads across literally multiple different places."

That is particularly important for large organizations with an international presence, which for security and regulatory compliance requirements need local cloud providers in different countries. That may mean using Azure in one country and Google Cloud in another, O’Donnell said. Being able to manage these multiple public cloud environments becomes important.