451 Alliance Report: Corporate Cloud Computing Trends Multi-Cloud UPDATE

by 451 Alliance Staff

Update by the Editor on Multi-Cloud Adoption (April 2, 2017):

In the search for higher “fault tolerance,” few companies rely on a single cloud service provider. According to a recent study by Microsoft and 451 Research, nearly a third of organizations work with four or more cloud service providers (CSPs).  By using multiple cloud services, enterprises increase their agility and automation. More and more companies are now re-strategizing and adopting a multicloud system.

“In computing, redundancy is a good thing,” says Mart van de Ven, director and consultant at Droste, a data consultancy. “If one provider is ‘nuked’, our services would not be affected because [as a company using multiple providers] we are also running our services on another provider.”

A study conducted by International Data Corporation (IDC) last year found that 86 per cent of enterprises predict they will require a multi-cloud strategy to support their business goals within the next two years.

A recent example of a company adopting a multi-cloud strategy is SNAP, the company with the popular Snapchat messaging and photo-sharing app that recently had a very successful IPO. It has agreed to buy $1 billion worth of Amazon cloud services over the next five years, according to its filing to the SEC in February 2017. This comes just days after SNAP revealed in another document related to its IPO that it has committed to buying $2 billion worth of Google Cloud services over the same five-year timeframe.

Other than serving as a back-up plan, the multi-cloud strategy means that different clouds from different providers can be used for separate tasks. It also enables companies to avoid vendor lock-in, so they can take advantage of price fluctuations and new offerings.

Lack of expertise in multiple clouds makes data management a challenge that businesses face as they grow in size and go global.

Last year, a survey of IT managers in Hong Kong, India and Singapore, by IDG, Connect and Rackspace, showed that over half of overall survey respondents found monitoring and managing multiple and/or complex workloads their biggest multi-cloud challenge.

Choosing cloud vendors with global networks and strong cloud security capability has become essential for companies when they adopt different cloud vendors. For example, many multinational companies with businesses in China are using services from Alibaba Cloud, the cloud computing arm of Alibaba Group, to help manage their global IT infrastructure from one single account, and to gain full-fledged anti-distributed denial-of-service (anti-DDoS) support, with the company’s server on premises or on cloud.

“Companies are adopting multi-cloud by necessity,” van de Ven says.

Both the number of companies using multiple clouds and the number of clouds they’re using are growing. Finding the right expertise to manage clouds is a key concern, according to the 1,002 IT professionals surveyed by RightScale, a cloud management platform.  No wonder multi-cloud management is already a fast-growing market.

According to global market research and consulting company MarketsandMarkets, the multi-cloud management market size is expected to grow from US$939.3 million last year to US$3.4 billion by 2021, at a compound annual growth rate  of 29.6 per cent.



Reliability and Cost are Most Important in Choosing a Cloud Computing Vendor

A December 2016 survey of 911 members of the 451 Global Digital Infrastructure Alliance focused on cloud computing trends, including overall spending, levels of adoption and key attributes.  These are summarized below:


Overall IT Spending vs. Cloud Spending. Cloud spending remains strong, and the growth rate continues to outpace overall IT spending. A total of 44% of cloud users expect spending to increase over the next 90 days, while 4% expect a decrease. In comparison, 38% expect an increase in their overall IT spending vs. 11% expecting a decrease.

Cloud Adoption. SaaS (64%, up 1-pt) remains the most popular type of cloud computing in use, followed by Infrastructure as a Service (43%, up 4-pts) and On-Premises Private Cloud (34%, down 2-pts).

On-Premises Private Cloud Vendors. The most popular vendor for on-premises private cloud is VMware vCloud (65%), with Cisco (33%) and Microsoft Cloud OS (30%) a more distant second and third.

Key Attributes. The most important attributes for on-premises private cloud vendors are Platform Reliability (66%), followed by Value for Money/Cost (47%) and Technical Expertise (36%).

By Tracy Corbo

Overall IT Spending – Next 90 Days

We asked respondents about their organizations’ overall IT spending and found 38% expect it to increase over the next 90 days – unchanged from the October 2016 survey. Another 11% expect a decrease (up 2-pts from previously).

Cloud Spending – Next 90 Days

Cloud vs Overall IT Spending. Cloud spending continues to outpace overall IT spending over the next 90 days, with cloud spending increases 6-pts stronger than overall IT.

Last 12+ Months. Focusing specifically on cloud spending, 44% of respondents expect their organizations’ cloud spending to increase over the next 90 days (down 2-pts from previous), compared with only 4% who expect a decrease.

As the following chart shows, the level of cloud spending growth has remained extremely strong over the past year.

Cloud Adoption

SaaS (64%, up 1-pt) remains the most popular type of cloud computing in use, followed by Infrastructure as a Service (43%, up 4-pts) and On-Premises Private Cloud (34%, down 2-pts).

Level of Adoption. Respondents using cloud services were asked to describe the level of cloud adoption in their organizations.

Overall adoption remains strong, with three in five respondents indicating broad or initial implementations of production applications. Broad Implementation of Production Applications (31%) is up 2-pts from the previous survey. Initial Implementations of Production Applications (31%) and Running Trials/Pilot Projects (15%) are both up 1-pt.

In contrast, Discovery and Evaluation (15%, down 2-pts) and Used for Test and Development Environments (9%) are down slightly.

Clouds Running Mission Critical Applications. Respondents were asked to describe the criticality of the majority of applications running on various cloud environments. More applications critical to business are running on On-Premises Private Cloud (70%) than on IaaS/Public Cloud (59%).

Cloud Vendors

This section looks at the vendors respondents are using across the different types of cloud.

On-Premises Private Cloud. The most popular vendor for on-premises private cloud is VMware vCloud (65%), with Cisco (33%) and Microsoft Cloud OS (30%) a more distant second and third.

IaaS. In terms of which vendors respondents are using to meet their IaaS needs, Amazon Web Services (56%) was the most popular choice, followed closely by Microsoft Azure
(52%). Google Cloud Platform (16%) was a more distant third.

Key Vendor Attributes

Respondents were asked about the most important attributes they look for in a cloud provider.

For on-premises private cloud vendors, Platform Reliability (66%) topped the list, followed by Value for Money/Cost (47%) and Technical Expertise (36%).

IaaS/Public Cloud Vendor Attributes. In a similar fashion, Service Reliability (60%) and Value for Money/Cost (55%) top the list, but Secure Services (45%) is third.

Cloud Usage Next Two Years

Looking ahead, respondents were asked to select which of the following best describes how their organization will use different on-premises and off-premises cloud environments over the next two years.

Overall, 34% of respondents said they will focus primarily on a single cloud environment. Another 29% said they will have multiple cloud environments with little or no interoperability, and 25% said they will have multiple cloud environments that will migrate workloads or data between different cloud environments.

Company Size. A closer look at the 34% who selected single cloud environments shows clear differences by company size. That number is higher among smaller companies (40% for companies with 1-249 employees; 38% for companies with 250-999 employees) compared to just 26% among companies with 10,000+ employees.

Larger organizations favor multiple cloud environments. Companies with 1,000 to 9,999 employees (36%) will have multiple clouds with little or no interoperability, while 29% of very large organizations (more than 10,000 employees) plan to migrate data between multiple cloud environments.