A vital area of innovation and development, the evolution of cloud The 10th State of Cloud report, conducted by Flexera, delves deep into the trends and developments in Cloud in 2020-2021.  Looking at how organisations are adopting cloud technologies, the report shows how digital transformations are progressing for businesses.

Cloud is a key component to digital transformations, something which Chesamel work very closely with organisations to manage and a topic we explore further in our Cloud Predictions Webinar.   Impressively almost all respondents (99%) were using at least one kind of cloud, public or private, which shows the increase in cloud adoption overall.  It was also found that, due to the events of 2020 – 2021, 90% expect cloud use to exceed their plans as a result of the pandemic.

The report categorises its respondents as: Enterprises (1000 employees or more) and SMBs (1000 employees or less).

The Key Findings

Enterprises Embrace Multi-cloud

The adoption of a multi-cloud strategy means that organisations are able to adapt certain services from different cloud providers at once to ensure they get the best of each provider. Multi-cloud, making use of multiple public cloud services available, is commonly used, whereas Hybrid cloud, refers to the use of both public and private cloud providers together.

92% of the enterprises partaking in the research claimed to already have a multi-cloud strategy, while 78% stated actually using hybrid cloud. The report also found that only 42% of all participating organizations use multi-cloud management tools, although this is up 9% on the 2020 report findings. 

Public Cloud Adoption Accelerates & Private Cloud Play’s it’s Role

Public cloud is by far the most commonly used, being easiest to access; they are owned and run by third-party providers, the top three AWS, Azure and Google Cloud, and deployed via the internet. This increased use of cloud is pushing up prices for the services – 36% of enterprises spend more than $12 million per year on public clouds and 36% of enterprises spend more than $1 million each month. Unsurprisingly SMB’s (employing less than 1,000) spent less on their cloud services per year, with 63% spending less than $1.2 million annually. 

While public cloud adoption accelerates, private cloud is also filling an important space; it offers more flexibility for organisations who have specific needs and can offer more options in terms of compliance. Private cloud adoption is, unsurprisingly, lower by SMBs overall than for enterprises, likely due to the often increased cost of private cloud. 

In terms of private cloud providers, VMware vSphere continues to lead the way and is used by 36%, 35% use Microsoft Azure Stack and AWS Outpost and OpenStack are each used by 28%.

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Organizations struggle to handle growing cloud spend 

The growth of cloud spend is highlighted as a top concern for organisations with an estimated 30% of cloud spend wasted. However, respondents still expected cloud spend to increase by 39% in the next year, despite already spending an average of 24% more on public cloud than they budgeted for. 

Flexera also found that organizations are not taking advantage of all cloud provider discounting options, this may be due to a limited understanding in the organisation at the point of adoption.

How many have already migrated to cloud?

The Flexera report showed that 50% of workloads and 46% of data is being run and held on public cloud and this is expected to increase to 57% for workloads and 54% for data over the next year.  

Breaking that down to organisation size, it appears that SMBs are adopting swiftly, holding more on the workflows and data on cloud than enterprises, with 64% of workloads on public cloud and 59% of data. 

59% of organisations plan to focus on cloud migration. Once migrated to cloud, to keep order and governance over cloud activity, Central Cloud Teams and Cloud CoEs (Centres of excellence) have been increasingly common, more so for Enterprises, who have more complex applications, with only 8% not having one of these in place or plans to place one. 

Top Cloud Challenges

There are still plenty of potential issues that raise reluctance for migrating to cloud, security being the biggest challenge identified, with 81% listing this as their biggest concern. This was followed by the issue of cloud spend, a top concern for 79%, and 75% listed governance, lack of resources/expertise or compliance.  The understanding of cost implications of software licences was also a concern for 55%, another blocker for cloud migration. 

It’s clear throughout that education and understanding are large factors in all decisions and uses of Cloud for all organisations. Getting the most out of this rapidly evolving technology comes with gaining knowledge around it first, or working closely with those who do to unleash its potential. 

The report gives an insightful overview of cloud usage and its predicted growth over the next 12 months. For more insights into Cloud and discussions around how we see this developing in the next year or more, watch our Cloud Predictions Webinar, where we discuss how cloud has evolved into a vital tool for so many businesses over the past year, how it will continue to develop and trends we see emerging in this area. It can be found on-demand, here, along with our other learning resources.

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