IT organizations face a plethora of choices for cloud and hosted services, and the landscape is shifting rapidly.

Traditional ‘siloed’ on-premises IT architectures are receding, while all forms of external clouds are ascending. This is most evident in the case of IaaS/public cloud adoption.

An in-depth survey of IT professionals in the 451 Alliance highlights key trends in the transition to cloud.


Report Highlights


Get on the IaaS Bus. A third of the 451 Alliance members are using IaaS/public cloud and another 19% are in the implementation phase. Only 14% have no plans for IaaS.

Whoa, Slow Down. There are still a lot of roadblocks to increased adoption of public clouds: Security is the #1 gating factor, followed by cost control concerns.

You May Need a Co-Pilot. Enterprises are increasingly turning to managed service providers (MSPs) for help in the journey to cloud. What can MSPs bring to the road trip?


Cloud Deployment Distribution


SaaS and hosted applications are currently the most widely-used models for cloud deployments. However, IaaS is coming on strong, due in large part to dwindling concerns about public cloud security and cost control issues.

Cloud of Hosted Services in Use

In terms of spending over the next 12 months, IaaS and PaaS are rising to the top of most IT organizations’ cloud budgets.




Almost a third (30%) of the enterprises in the 451 Alliance have already adopted IaaS/public cloud for production applications, and another 19% are in the initial implementation phase.

IaaS/Public Cloud Adoption

Note that only 14% of the 451 Alliance members have no plans to adopt IaaS/public cloud, a percentage that has been sliding steadily over the last few years.

About a third (35%) of the survey participants report that spending on public clouds over the next 90 days will be higher than they originally budgeted.

In most cases, this is due to accelerated adoption rather than unexpected hidden costs (although many organizations still struggle to accurately predict cloud costs).


Make the Case


Generally, IT professionals say that it’s getting easier to justify public cloud expenditures to upper management.

Although cost savings (hardware and software) have always been a solid justification, a variety of other factors are proving persuasive, including faster time to market, resource scalability, and reduced internal footprint.

How to build a business case for IaaS/Public cloud

Roadblocks Remain


Despite public cloud enthusiasm, a range of hurdles remain – most notably, concerns about information security (although security concerns have been steadily subsiding over the last several years).

Barriers to Iaas/public cloud adoption

The inability to control cloud-related costs is another concern that has been steadily subsiding, thanks to a wide variety of cost monitoring, control and optimization tools from the public cloud providers themselves and from third parties.

Concerns about vendor lock-in have also been diminishing, but are still cited by 19% of the 451 Alliance vendors as a significant barrier to broader adoption of IaaS/public cloud. Enterprises are taking a variety of measures to combat vendor lock-in, including hybrid clouds. Another prevalent tactic is to use multiple cloud providers.

Among enterprises that are using IaaS/public cloud, 28% rely on only one vendor, but 41% use two vendors and 22% use three vendors. In addition to minimizing potential vendor lock-in, there are a wide variety of factors behind for the multi-vendor approach.

The most prevalent reasons include:

  • Access to vendor-specific capabilities
  • Cost optimization
  • External customer preferences

Vendor Landscape


In terms of cloud vendors currently in use, Amazon Web Services (AWS) and Microsoft (Azure) are in a virtual tie: 75% of the 451 Alliance members use AWS and 73% use Azure. Google came in a distant third at 25%. Rounding out the top five were IBM (11%) and Oracle (11%).

‘Other’ vendors (those with single-digit ‘in use’ percentages) include Rackspace, CenturyLink, OVH (which acquired VMware’s vCloud Air in 2017), Digital Ocean, Alibaba and NTT.


Cloud Management


Enterprises use a mix of tools to manage their cloud environments.

More than half (64%) of the 451 Alliance members use their public cloud providers’ management tools (e.g., AWS Systems Manager, Azure Portal). And 41% use management tools supplied by their hardware or software vendors (e.g., VMware vRealize, Red Hat OpenShift, HPE OneSphere).

About 17% of the survey participants use home-grown management tools; 12% leverage tools supplied by third parties (e.g., Accenture Cloud Platform, DXC Agility Platform) or cloud service brokers; and 8% use SaaS-based cloud management


Looking Ahead


Over the next two years, the mix of cloud and hosted environments will shift – sometimes minimally and sometimes dramatically.

The most dramatic shift will be a decrease in the use of traditional on-premises IT resources and infrastructure (from 40% of organizations running the majority of these workloads in this environment today to 19% two years from now).

On the public cloud IaaS/PaaS front, 9% of organizations run the majority of their workloads in these environments today, rising to 20% in two years.

primary environments for workloads

A number of factors influence decisions about where to execute workloads. The two most important factors center on cost and security. Other factors (in decreasing order of importance) include:

  • Application performance
  • Platform reliability
  • Government regulation issues
  • Industry regulation/compliance issues
  • Latency considerations
  • Software vendor’s preference or requirement

Selecting the optimal execution venue also depends on the specific type of workload.

For example, enterprises tend to prefer traditional on-premises architectures for customer-facing workloads today, but the trend points to a shift to public cloud IaaS/PaaS during the next two years.

For core business workloads, enterprises tend to rely on traditional IT architectures today -- but many enterprises will run majority of these workloads in SaaS and hosted application environments over the next two years.

In all classes of workloads, the clear shift is toward IaaS/PaaS/SaaS as a primary workload execution venue.


Managed Service Providers (MSPs)


As cloud options and environments become more and more complex, many enterprises are turning to MSPs for help.

The primary functions that IT managers look for from MSPs today include (in decreasing order):

  • Backup and recovery (including replication, synchronization, restoration)
  • Monitoring cloud infrastructure (including alerting and incident response)
  • Managing applications on cloud infrastructure (including patching, security)
  • Ensuring security for cloud/hosted environments and data
  • Migrating applications and data from on-premises environments to cloud platforms
  • Optimizing cloud infrastructure for cost or performance

Of course, getting help from MSPs first requires getting approval from upper management. According to IT professionals in the 451 Alliance survey, this can require a range of justification arguments.

How to make the business case for managed services

Many organizations still worry about ceding control of infrastructure management (cloud or on-premises) to ‘outsiders,’ usually citing security and cost concerns as the inhibiting factor. But MSPs can be important strategic assets that can help enterprises achieve a balance of internal and external resources and expertise.

In short, MSPs can grease the wheels for cloud transformation initiatives.