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Despite recent talk about cloud repatriation (i.e., moving workloads from public clouds back to on-premises infrastructure), migration of IT workloads to the cloud continues unabated.

A recent survey of 451 Alliance companies about their plans around cloud, hosting and managed services turned up some revealing trends about cloud adoption status, deployment models, benefits, spending plans, skills shortages and the changing role of IT.

 
 

Report Highlights

 
 

Public vs. Private Clouds. IT organizations are split roughly evenly between those that think that private clouds are more expensive (39%) and those that think that private clouds are less expensive (42%) than equivalent public cloud resources.

IaaS/PaaS/Public Cloud. More than three-quarters (77%) of the 451 Alliance companies are in production mode with IaaS/PaaS/public cloud, while another 21% are ‘kicking the tires.’

Public Cloud Spending Surges. On average, enterprises spend 23% of their total IT budget on IaaS/PaaS/public cloud services. Furthermore, 79% of companies surveyed plan to increase spending over the next 12 months, while only 3% anticipate spending decreases on IaaS/PaaS/public clouds.

 
 

Cloud Adoption Status

 
 

SaaS and hosted applications are still the most widely used deployment models (although not by much), but IaaS/PaaS/public clouds are coming on strong as concerns about the hyperscalers (e.g., security, data privacy, vendor lock-in) continue to diminish.

 
 
Adoption of Cloud/Hosted Services
 
 

Over the next year, the following deployment models will make the greatest gains in acceptance:

  • IaaS/PaaS/public cloud
  • Hosted private cloud
  • SaaS

The deployment models seeing the lowest gains – or in some cases, losses – include:

  • Hosted non-cloud infrastructure
  • On-premises private cloud
  • Colocation and/or third-party datacenters

It’s interesting to note that a majority (57%) of companies have no plans to add new deployment models over the next 12 months (beyond what they’re already using), indicating relative stability in the mix of workload deployment venues in IT environments.

 
 

Best of Both Worlds

 
 

At this stage of the cloud migration game, it’s clear that many IT organizations are pursuing a hybrid cloud strategy, whether integrated or not.

 
 
What is Your IT Operating Environment?
 
 

Among 451 Alliance companies, 32% have a formal strategy for hybrid IT and another 19% are researching or developing a plan. Only 30% have no plans for hybrid IT.

 
 

Private vs. Public Clouds

 
 

Hybrid IT often entails mixing private and public clouds. However, there is disagreement over which approach is more cost-effective.

About 19% of the companies think that the total cost of ownership between the two is about equal, while 39% think that private clouds are more expensive and 42% think that private clouds are less expensive than equivalent public cloud resources.

Part of the reason that enterprises are not convinced that public clouds are necessarily less expensive than on-premises options has to do with the additional services often needed for public cloud deployments.

Topping the list of these services are cost/performance optimization, threat detection and mitigation, and scaling/capacity management.

 
 
Additional Services Needed for Public Cloud Deployments
 
 

For the top six services (threat detection and mitigation, in particular), many organizations are willing to pay a premium to either the cloud platform vendor or a third-party service provider. However, for other services, organizations are reluctant or unwilling to pay extra, opting instead to take the DIY approach via retraining existing staff or hiring new personnel to close the skills gap.

 
 

Skills Shortages

 
 

Most IT managers bemoan a lack of cloud-specific skills among their internal staff. The most severe shortages are in the areas of:

  • Security expertise
  • Cloud platform-specific skills (AWS, Google and Microsoft, as well as VMware, OpenStack, etc.)
  • Cloud orchestration and management
  • DevOps
  • Compliance and governance
  • Cloud-native programming skills
 
 

Going Public

 
 

In the hottest segment of the cloud deployment categories – IaaS/PaaS/public cloud – 77% of the 451 Alliance companies are already in production (44% in broad implementation and 33% in initial implementation phases), while 21% are ‘kicking the tires’ (in the phases of discovery and evaluation, trials and pilot projects, or test and development).

 
 
Adoption Status of IaaS/PaaS/Public Cloud
 
 

Companies are divided over whether certified public cloud professionals are necessary: Half of the firms have at least some certified professionals, while the other half (predominantly smaller firms) have no certified public cloud professionals on staff.

 
 

What’s the Return on Cloud Services Usage?

 
 

IT professionals cite a wide variety of benefits from moving workloads to cloud service providers.

 
 
Benefits from Using Cloud Services
 
 

‘Reduced operating expenses’ ranked #3 among the benefits of cloud services, despite the need for additional services and (often hidden or unanticipated) costs.

It’s also interesting to note that, although improved security made the top 10 list of cloud services benefits, the relatively low percentage (15%) of companies that cited it suggests that the cloud still has a long way to go in terms of security advantages over on-premises infrastructure.

Alternatively, it may be the case that organizations continue to navigate the cloud services learning curve, resulting in little appreciable difference in the overall security experience.

 
 

Cloud Spending Trends

 
 

On average, companies spend 23% of their total IT budgets on IaaS/PaaS/public cloud services.

 
 
Percentage of IT Budget Spent on IaaS/PaaS/Public Cloud
 
 

Going forward, 79% of the 451 Alliance companies plan to increase spending on public cloud resources over the next 12 months, while only 3% anticipate spending decreases and 18% hope to hold expenditures at current levels.

 
 

Capex vs Opex

 
 

The cloud movement has had a significant effect on how organizations fund – or plan to fund – IT spending. Today, about one-third of the companies express no preference for capital versus operating expenditures, while 38% prefer opex and 27% prefer capex. In the future, this is expected to shift to 45% and 20%, respectively.

 
 

The Role of IT

 
 

The cloud movement has also had a significant impact on IT’s role. IT continues to wear many hats.

 
 
The Role of IT in Cloud Infrastructure
 
 

While the role of IT has not diminished, the cloud has empowered users, as evidenced by the 25% of organizations in which users consume cloud services without the intervention – or sometimes knowledge – of IT.