451 Research studies show hybrid, multi-cloud are now standard cloud strategies

July 24 2019
by Liam Eagle, Haley Brown


According to 451 Research's Cloud, Hosting and Managed Services Workloads and Key Projects survey, hybrid and multi-cloud strategies are driving value in sync with the overall benefits sought from cloud and IT modernization, including cost, performance and compliance. Increasingly, hybrid is being viewed as a framework for achieving these benefits and successfully leveraging the cloud. Although a hybrid posture is the dominant approach to IT by most enterprises, adoption of hybrid and multi-cloud strategies differs somewhat along the lines of organizational size, with large enterprises more likely to pursue such strategies, indicating slightly greater market potential among this segment for services related to hybrid or multi-cloud.

The 451 Take

As the majority of businesses express plans to pursue a hybrid IT posture moving forward, we expect to see persistent reliance on internal IT infrastructure. Additionally, hybrid-enabling and compatibility functions will become increasingly desirable as features of various types of hardware and software – and of public cloud platforms themselves. Often, we find that hybrid and multi-cloud postures present themselves as a result of widespread adoption of new technologies and platforms, not necessarily as a result of strategic shifts. Organizations often find themselves developing a hybrid or multi-cloud strategy as a means of taking control of a complex mixed environment. Such complexity is a natural outcome of hybrid and multi-cloud strategies, and addressing it is one of the key avenues along which modern managed services deliver value. We expect that skills and services to help navigate the complexity of hybrid and multi-cloud environments will become a key area of new opportunity for managed services businesses associated with cloud adoption or the use of public cloud services. Designing, implementing, operating and optimizing hybrid and multi-cloud deployments will become an increasingly important capability for companies offering managed and professional services around the use of public cloud.

Hybrid is a widespread IT strategy

A hybrid approach to IT strategy is common, with the majority of respondents (57%) intending to move toward an environment that leverages a mixture of on-prem systems and off-prem integrated cloud and hosted resources (Figure 1A). Intent to pursue a hybrid IT strategy is much more prevalent among large organizations. This can be attributed to their greater likelihood of having preexisting investments in datacenters and infrastructure, necessitating an IT strategy that can successfully and seamlessly support current infrastructure investments that prove difficult to move to the cloud (Figure 1B).

Figure 1
Figure 1A: Which of the following best describes your organization's overall IT approach and strategy? 451 Research Cloud, Hosting and Managed Services Workloads and Key Projects, Q1 2019
Figure 2
Figure 1B: Which of the following best describes your organization's overall IT approach and strategy? 451 Research Cloud, Hosting and Managed Services Workloads and Key Projects, Q1 2019

Although a smaller proportion of organizations (19%) are opting to go all-in on public cloud, younger, smaller companies are the most likely to make the shift to a completely off-premises, public cloud environment. Such companies typically have fewer existing investments in IT infrastructure that must be accommodated compared with larger, more established organizations, limiting barriers that would otherwise prevent them from adopting an all-in public cloud approach.

The hybrid cloud infrastructure landscape is complex, with the scope of enterprise requirements and infrastructure components extending beyond what a single service provider is likely able to provide. This encourages the development of a larger ecosystem of services and presents an opportunity for managed service providers that create partnerships with other members of this ecosystem in order to orchestrate services and align the capabilities and objectives of the various technologies and vendors involved.

Continuous migration and optimization drive the hybrid imperative

Among the use cases key to driving hybrid strategy, the most common is continuous workload migration between on-premises and public cloud environments in pursuit of cost, performance, security and agility benefits, among others (Figure 2). Although this holds true as a unifying driver for hybrid strategies, additional use cases differ among large and small enterprise respondents. In addition to workload migration, small enterprises are more apt to adopt hybrid IT strategies out of a need for security or continuity, with a primary use case employed for off-site backup or disaster recovery (46%). Large organizations are more focused on efforts surrounding ongoing optimization, with particular emphasis on enabling seamless interoperability between multiple applications running in separate environments (43%).

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Figure 2: Which of the following use cases are most important to your organization's use of hybrid/multi-cloud environments? 451 Research Cloud, Hosting and Managed Services Workloads and Key Projects, Q1 2019
Hybrid is considered a key tool in the ongoing optimization of workload placement and the pursuit of factors driving value behind cloud deployments; hybrid, multi-cloud strategies are a vehicle for making cloud work as advertised. Understanding the factors that impact workload placement is an opportunity for managed service providers to add value within the context of evolving hybrid and multi-cloud design. This includes services that help continuously identify the best execution venue for a workload and migrate that workload to achieve performance, security, cost and other targets.

Multi-cloud is the standard approach to public cloud

Most businesses anticipate operating across a hybrid mixture of on- and off-premises infrastructure environments; most also express an intent to adopt a multi-cloud posture in the public cloud. Among surveyed businesses currently using IaaS/public cloud, 72% are using more than one vendor, while 31% are using more than two (Figure 3). Like hybrid IT adoption, a multi-cloud approach is more widespread among large enterprises (79%), whereas just under half of smaller companies (44%) claim to stick to a single vendor. However, among organizations using multiple public cloud vendors, the majority of usage is concentrated with one primary vendor. Nearly half (45%) of organizations that use multiple cloud vendors claim that 80-100% of their public cloud/IaaS usage is with their primary vendor. Still, one in five respondents indicate that less than half of their public cloud usage is concentrated with a primary vendor. This suggests that this 'primary vendor' role can be defined by other metrics beyond usage volume, including key features or provider advisory roles. Additionally, this could point to greater market fragmentation as a result of a greater number of vendors. Overall, these figures illustrate a great deal of value to be recognized by a public cloud vendor in assuming a primary role with their customers, making it critical to clearly understand what defines this role for customers.

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Figure 3: How many different IaaS/public cloud vendors does your organization currently use? What percentage of your organization's IaaS/Public cloud usage is with your primary cloud vendor? 451 Research Cloud, Hosting and Managed Services Workloads and Key Projects, Q1 2019

However, multi-cloud usage is concentrated with the primary vendor

Among enterprises using multiple suppliers of public cloud infrastructure, the most commonly cited reason for doing so is to access vendor-specific platform capabilities (Figure 4). Additionally, key features driving the multi-cloud mix within the enterprise include desires for cost optimization and satisfying requirements of both internal business units and customers. Company size matters with multi-cloud approaches, where large enterprises' public cloud usage differs among business units or individuals (30%), while just one in 10 small-enterprise respondents cited this as a key driver for multi-cloud adoption. Additionally, large enterprises reserve concerns surrounding vendor lock-in and corporate policies demanding multiple suppliers, addressed using multiple public cloud vendors.

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Figure 4: Your organization uses multiple IaaS/public cloud vendors. What are the most important reasons? Please select up to 3. 451 Research Cloud, Hosting and Managed Services Workloads and Key Projects, Q1 2019

Providers of tools or services that strive to be vendor-agnostic in the public cloud space should be aware that supporting a multi-cloud strategy includes providing support for advanced functions that are specific to the various cloud platforms being supported, requiring additional expertise beyond an understanding of the basic platform functions. Similar to driving value with hybrid IT, this understanding can be achieved through partnership with other service providers within a larger ecosystem of services.

The managed services opportunity in hybrid and multi-cloud

Responses to the Q1 2019 Workloads and Key Projects study show that enterprises are already engaged in hybrid and multi-cloud practices as a strategic path forward for IT, with many viewing them as a means of securing the overarching business benefits associated with cloud and modernization in general (cost, performance, availability, security, etc.). With this focus on hybrid and multi-cloud comes a level of inherent technical complexity, and therefore an opportunity for service providers to focus on helping enterprises to address and manage the complexity of their cloud operations or plans. Providing a managed service for hybrid and multi-cloud does not just translate into design, implementation, migration and management across multiple environments – it also includes a need for deeper expertise to access advanced capabilities found within the individual environments, achieved through potential partnerships with a wider ecosystem of service providers. Additionally, this includes expertise in identifying the best venues for enterprise workloads, deploying those workloads into the correct environments and continuously re-evaluating those assessments in the face of evolving enterprise requirements.