In a recent survey of over two hundred CIOs with an average annual IT budget per firm of $600 million – representing a combined $126 billion in enterprise IT spending every year – 41.6% of corporate workloads at big companies are expected to be running in the public cloud within the next five years. This will represent a 16.2% increase from today, but that growth does not represent any kind of abandonment of private cloud services. Instead, according to researcher MarketsandMarkets, the demand for the hybrid cloud model is growing at a compound rate of 27% per year, far outstripping growth of the overall IT market.
CIOs say they are knitting together a new IT architecture that comprises the latest in public cloud services with the best of their own private data centers and partially shared tech resources. The increase in adoption of hybrid cloud is driven by the need for improved collaboration and greater flexibility and efficiency, CIOs say, but is also heavily influenced by security preferences. As quoted in the Wall Street Journal’s report of the survey, Michael D. Rhodin, senior vice president, International Business Machine Corp.’s IBM Watson unit, said:
“Think of the hybrid container as a mixing pot for information coming from the public world with information that you might pull out of your CRM [customer relationship management] system or your ERP [enterprise resource planning system]. There is just stuff that is proprietary that you really don’t want to put out on the Internet.”
The public cloud is upping its game on the security front, making the hybrid cloud model more attractive and offering greater flexibility when it comes to managing data security concerns, including governance and compliance issues. Many cloud providers are already providing options to migrate even the strictest workloads. For example, AWS Compliance enables customers to understand the robust controls in place at AWS to maintain security and data protection. In fact, according to the survey, AWS – and the managed service providers that facilitate their offerings – is knocking once-dominant providers of legacy enterprise systems and services down a ranking of big IT vendors that CIOs at large corporations consider “most critical and indispensable” to their organization’s technology environment.
Also from the Wall Street Journal, Ariel Kelman, vice president of worldwide marketing at AWS, made the point that there’s a need for public clouds to integrate into a broader, hybrid environment, saying “that has been the reality of the work we have done with enterprise customers over the last nine years.”
Other key findings from the survey:
- The hybrid cloud market to reach $85 billion in 2019, up from $25 billion in 2014, a compound annual growth rate of about 27%.
- Nearly 75% of large enterprises plan to have hybrid IT deployments, as it refers to the hybrid cloud, by the end of 2015.
- However, IT budgets at these firms are set to grow this year by only 2.8%, compared to more typical annual growth rates of 3% to 4%.
The CIOs at these large enterprises will be focused on optimizing IT solutions for flexibility, scalability, and cost over the coming years – and will meet these goals by implementing solutions across all platforms and providers as needed. While public and private cloud as separate entities still exists, we will see the borders between public and private resources dissolve as hybrid cloud adoption continues to rise and plays a key role in integrating enterprise IT infrastructure.