Study Finds Enterprises Shifting to Hybrid, Multi-Cloud Business Model

Study Finds Enterprises Rapidly Shifting to Hybrid, Multi-Cloud Business Model

Sudipto Ghosh

July 11, 2019

A recent global survey of 300 enterprises has found out that most plan to move their existing applications to Multi-Cloud Business/ SaaS by 2021. It also found out that less than 6 percent have a Cloud Entry Framework for migrating applications already in place. This is proving to be a major game-changer in the SaaS versus Hybrid Multi-Cloud Businesses. It shows that enterprises are rapidly accelerating their adoption of Cloud Computing using a hybrid, multi-cloud approach, with most enterprises pushing to move the majority of their applications into software-as-a-service (SaaS) offerings as quickly as 2021.

US & European Companies Lead the Pack in Cloud Adoption; Trend will Continue into 2021-2030 for Multi-Cloud Business

The Cloud Computing adoption is more likely to impact the IT decision-makers in the U.S. and Europe. These groups were asked about their cloud operations, adoption and expectations for the future. On average, enterprises are using two different public cloud infrastructure vendors for their applications, the study finds, in addition to a complement of SaaS vendors.

“Our research shows the overwhelming majority of enterprise IT decision-makers run their applications in a hybrid mode, with some workloads in the public cloud and others in private data centers,” said Chris Germann, partner, ISG Enterprise Research.

Chris added, “Interestingly, most of those same IT professionals expect the majority of their workloads will be running in software-as-a-service environments by 2021. This will relieve enterprises of the burden of maintaining core business applications and give them access to constantly updated vendor offerings, but they will need to manage applications in a spectrum of environments – from on-premises to SaaS – during the transition.”

Majority of IT Decision-Makers Find Working at Co-Location Facilities

The report found companies today are distributing their applications portfolios across traditional environments, on-premises private clouds, hosted private clouds, colocation facilities and public cloud infrastructure, and are in the process of adopting the latest public cloud services.

Sixty-five percent of IT leaders say their firms are piloting cloud database services and 72 percent say they are planning to use cloud-based blockchain services.

However, more than 70 percent of IT leaders indicate they will not change their application architecture or hosting model before 2021 for key systems of record, such as accounting and financial software, meaning new Cloud services and applications will be expected to mesh with legacy systems already in place.

Chris added, “By using cloud-based applications, companies are making decisions on the technologies they plan to use for a long time, even though those choices in many cases are not part of a strategic plan. Without a thoughtful approach to workload transformation and migration to Cloud, enterprises will increase the cost of cloud integration and saddle themselves with tools or software that can negatively impact the business value of their new infrastructure.”

Less than six percent of Multi-Cloud Business enterprises surveyed by ISG agreed or strongly agreed that they have a Cloud Entry Framework (CEF), which lays the foundation for how, when and where different applications will migrate to the cloud. Less than one percent said a CEF is very or extremely important for their business, revealing a potential vulnerability for enterprises that do not take the time to fully understand the potential, long-term implications of Cloud migration.

When adopting public cloud services, enterprises must balance business needs with a robust and adaptable technology platform, Germann said. “IT leaders need to control adoption of new services to avoid cloud sprawl, while allowing teams the flexibility to take advantage of new and powerful hybrid architectures,” he said. “One of the most underappreciated strategies is a Cloud Entry Framework to provide clarity for long-term cloud adoption.”

ISG Insights™ provides proprietary research, advisory consulting and executive event services focused on market trends and disruptive technologies driving change in business computing.