Terms like business agility and flexibility have become necessities for enterprises in their digital transformation process. More so, in the current pandemic situation, as IT departments are increasingly realizing that a single solution just cannot offer the required flexibility to adapt to rapidly changing business conditions. CIOs therefore are now finding it a need to accelerate their migration to multicloud architectures because of the novel coronavirus.
A recent IBM Institute for Business Value (IBV) survey, conducted in collaboration with Oxford Economics, shows Indian CIOs – more than ever – are planning to invest in hybrid multi-cloud platform strategies and capabilities to drive business transformation and to unlock value, especially in the wake of the Covid-19 crisis.
According to the report, 17% of enterprise IT spend is allocated to cloud at present and they plan to increase the share of spend on hybrid from 42% to 4% by 2023. The majority of their cloud budgets are being allocated to hybrid cloud platforms even as their public cloud spend is set to reduce from 50% share today to 43% by 2023.
The change is occurring across industry, say IBM researchers, but in insurance, telecommunications and retail this spend can go up to 10 clouds particularly as these industries will continue to expand multiple cloud deployments in the next three years. For example, IBM cites, in India, telcos such as Bharti Airtel and Vodafone Idea are achieving business transformation by leveraging hybrid multi-cloud platform technology and embedding AI.
The study also confirmed the RoI of a platform approach as respondents said that the value derived from a full hybrid, multi-cloud platform technology and operating model at scale is 2.5 times the value derived from a single platform, single cloud vendor approach. In fact, the platform approach is cited as accelerating value with scale.
“Hybrid Cloud enables improved business performance and greater ROI,” says Viswanath Ramaswamy, Vice President, IBM Cloud and Cognitive Software and Services, IBM India/South Asia.
In fact, IDC says that by 2022, more than 90 % of enterprises worldwide will rely on a mix of on-premises or dedicated private clouds, multiple public clouds, and legacy platforms to meet their infrastructure needs. It even predicts that a rising desire by companies to mitigate future disruptions by being more flexible, agile, and resilient could make 2021 “the year of multicloud.”
“We are seeing the coronavirus situation accelerating enterprise interest and adoption of cloud,” says Deepak Mohan, research director at IDC. “The term we’re hearing most often in this context is resilience. IT organizations leveraging cloud environments are able to adapt better to the current crisis because they can easily scale or shift and continue to deliver services. Those that have taken more constrained approaches have had challenges.”
Mohan notes that companies are seeing the urgency of not having all their eggs in one basket but instead spreading the risk around to avoid single points of sluggishness or failure. And this is increasingly driving IT organizations to more diversified options, including multicloud.
However, on the flip side, While large enterprises can achieve demonstrable competitive advantage through robust hybrid cloud management and governance platform, industry experts point out that migrating application to multicloud architecture is about a lot of time and money—something smaller organizations do not always have, especially in a down economy. The biggest challenge is to understand where the data resides physically — this situation might be graver for small and mid-size companies.
Earlier studies had shown that given the multi-cloud environment functionality, CIOs often make the mistake of running an application in an unapproved environment. There are tons of guidelines laid down, especially under GDPR, which when breached, can cause a collection of hefty fines; to curb this issue, IT managers might be required to prepare the right tools to garner visibility to monitor the extent of their regulatory burdens.
However, there’s no doubt that the benefits which can be obtained from multi-cloud environments can take an organization places. The proper implementation of these environments and the migration of applications to the private and public clouds are all that matters, which should be performed with utmost caution — the benefits will eventually supersede the challenges.