The Power of the Hybrid Cloud Strategy: Addressing the Breadth of Enterprise Workload Requirements

  • This complementary nature of capabilities and challenges is driving the growth of hybrid and multi-cloud usage where customers use a mix of public and private clouds to create a best-of-breed IT environment.
  • Public cloud offers numerous benefits such as cost savings through reduction in capital expenditure as well as access to next-generation technology.
  • However, relying on only public cloud also has shortcomings, including concerns about security, compliance, and governance matters.

Cloud computing has become an integral part of business strategy and IT architecture for enterprises over the past decade. The use of cloud has become pervasive as enterprises seek to adopt new business models, extract valuable insights from massive amounts of data, handle demanding workloads, deliver new products at scale and speed, and gain competitive advantage.

But cloud adoption has also introduced new challenges. This study of enterprise IT customers highlights the top challenges with public cloud IaaS are:

  • Security concerns
  • Application performance
  • Cost and billing
Hybrid cloud is a composition of a public cloud and a private environment, such as a private cloud or on-premise resources, that remain distinct entities but are bound together, offering the benefits of multiple deployment models. Hybrid cloud can also mean the ability to connect collocation, managed and/or dedicated services with cloud resources. Gartner defines a hybrid cloud service as a cloud computing service that is composed of some combination of private, public and community cloud services, from different service providers. A hybrid cloud service crosses isolation and provider boundaries so that it can’t be simply put in one category of private, public, or community cloud service. It allows one to extend either the capacity or the capability of a cloud service, by aggregation, integration or customization with another cloud service.

Private cloud addresses many of the top challenges with public cloud, including security and application performance by offering environments consistent with traditional ones. At the same time, private cloud customers’ top challenges include:

  • High operating costs
  • Limited availability of higher-layer services
  • Inability to scale quickly

This complementary nature of capabilities and challenges is driving the growth of hybrid and multi-cloud usage where customers use a mix of public and private clouds to create a best-of-breed IT environment. The results of the study show that top benefits of hybrid cloud include:

  • Better security. A majority of hybrid cloud customers observe improvements in security and risk reduction (average of 13%), addressing the top challenge with “all-in” public cloud usage.
  • Operating cost improvements. A majority of enterprises benefit from lower annual operating expenses (average of 11%) as a result of hybrid cloud investments.
  • Speed and agility increase. The median enterprise reported a 15% or more reduction in time to market as a result of hybrid cloud investments.

While hybrid cloud can eliminate trade-offs and offer the best-of-breed solution, the implementation and management of hybrid cloud can still be challenging. Different management tools for public and private cloud result in a fragmented IT environment that lacks interoperability and visibility, which is a major challenge at scale. These gaps are addressed by the next generation of hybrid cloud platforms — the consistent hybrid cloud, which unifies public and private cloud capabilities under one management and operations umbrella. IDC believes that the consistent hybrid cloud will enable enterprises to meet the modernization and agility needs for business-critical workloads and innovation through emerging technologies.

SITUATION OVERVIEW — CLOUD ADOPTION STATE OF THE UNION

Cloud adoption — both public and private — has increased exponentially in the past five years. While public and private clouds are similar in the basic approach to infrastructure provisioning and agility, there are differences in the extent to which they address certain needs. These include the extent to which they allow scalability, access to new technologies, and compliance/control over the resources.

Public cloud offers numerous benefits such as cost savings through reduction in capital expenditure as well as access to next-generation technology. However, relying on only public cloud also has shortcomings, including concerns about security, compliance, and governance matters; applications not meeting service-level agreements (SLAs); steep price per performance; and increased operational costs in some situations (especially due to bandwidth consumption).

Private cloud can successfully address some of the areas where public cloud lags, especially in the areas of security, governance, and performance. According to a recent IDC survey, 86% of enterprises said they are considering “repatriation” — moving applications from public clouds back to the datacenter — for one or more workloads. This is further compounded by the early stage of cloud adoption today and the evolving regulations and customer preferences regarding data storage in the public cloud. One of the enterprises interviewed as part of this study called out the flexibility to move workloads and data as needed over time to meet customer preferences and regulations in specific geographies as a benefit of the hybrid architecture.

This duality of challenges and benefits has resulted in the hybrid cloud, which is becoming the de facto architecture for enterprise cloud adoption. To better understand the challenges with the “all-in” public and private cloud strategies and the benefits of hybrid cloud, IDC (sponsored by Dell EMC and Intel) carried out a study of enterprise IT organizations on the topic.

METHODOLOGY

The data for this hybrid cloud study came from a global survey of 1,000 executives from large enterprise IT organizations (5,000+ employees in the United States and 500+ employees in other regions) that have adopted cloud infrastructure for their applications. The organization may not be an entire corporate enterprise by itself but is often a business unit or division with its own IT boundary, within a large enterprise. The countries represented in this survey are Australia, China, France, Germany, India, Japan, New Zealand, the United Kingdom, and the United States. For comparison purposes, half of the organizations surveyed use either an all-in public cloud approach or an all-in private cloud approach. The other half use a hybrid cloud approach. The survey respondents were selected across the following industry verticals: healthcare, financial services, education, government, and software-as-a-service (SaaS) provider/independent software vendor.

REASONS THAT ENTERPRISES ADOPT CLOUD AND CHALLENGES OF THE “ALL-IN” STRATEGY

Drivers of Public and Private Cloud Use

Public cloud offers organizations a simplified approach to acquiring and managing infrastructure. Furthermore, public cloud is increasingly seen as the source of access to new technologies — such as serverless computing, blockchain, artificial intelligence (AI), and quantum computing. The survey conducted as part of this study highlights that ease of management (68% of respondents), speed of scaling/deployment (68%), and reduction in total costs (59%) are the top factors driving enterprises toward public cloud (see Figure 1). Another key reason is the access to a broad ecosystem of new technologies and services (35%). One interesting observation here is that the lowest ranked driver was up-front cost (32%). Up-front costs are typically seen as one of the benefits of public cloud over dedicated infrastructure. This difference is likely a reflection of the more predictable IT investment needs and IT budget allocation processes at large enterprises compared with the broader public cloud customer base.

Private cloud platforms have evolved, and they now offer several of the management and agility benefits that public cloud offers. Organizations typically select a private cloud when they desire the agility benefits of the public cloud model but have tighter security and data compliance–related constraints for their workloads. The key areas where private cloud differs from public cloud are in the higher level of control over the infrastructure assets and services used in the organization, with the trade-off of more limitations on the magnitude of scalability and access to new emerging services. These aspects correlate strongly with the top drivers of private cloud use, which include more security and compliance (57%), the ability to ensure data is protected (50%), and higher flexibility to configure the platform and resources as needed (42%), compared with public cloud.

The availability of high-capacity networks, low-cost computers and storage devices as well as the widespread adoption of hardware virtualization, service-oriented architecture and autonomic and utility computing has led to growth in cloud computing. By 2019, Linux was the most used type of operating systems used, including in Microsoft’s offerings and is thus described as dominant. The Cloud Service Provider (CSP) will screen, keep up and gather data about the firewalls, Intrusion identification or/and counteractive action frameworks and information stream inside the network.

Challenges Enterprises Face with Public and Private Clouds

While public and private cloud offer specific benefits, organizations that are exclusively using public or private cloud for their needs report several challenges with this model. (The organization may not be an entire corporation but is often a business unit or division with its own IT boundary.)

Public Cloud — Security, Performance, and Cost Challenges

While public cloud offers many advantages, there are some inherent shortcomings and concerns. The top 3 concerns are security, performance, and cost:

  • Security: Even though public clouds are arguably as secure as any datacenter, concerns about security are persistent nonetheless. In the IDC survey, 67% of respondents said that they were worried about the security of their data and applications in the public cloud. Why? When enterprises use public cloud, there may be justifiable concerns about privacy and security because sensitive data and applications are hosted outside the datacenter in third-party, shared infrastructure. While customers are always concerned about data breaches, distributed denial-of-service (DDoS) attacks, hackers, ransomware, and so forth, their concerns are elevated when moving to a public cloud where they don’t have complete control of the environment. Specific concerns about public cloud’s security include identity/access/credential management, insecure APIs, and vulnerability of hypervisors and other shared resources. At the same time, some of the biggest data breaches have occurred simply because an enterprise administrator misconfigured a cloud resource such as an S3 bucket or didn’t change the default passwords.
  • Application performance: 61% of the respondents said that the application performance in public cloud did not meet their expectations. This shouldn’t be surprising because it’s a well known fact that performance varies among public cloud providers, and network latency can become a serious issue in some scenarios. Not all public cloud providers have their own private, high-bandwidth, and low-latency WAN. Also, while cloud service providers (SPs) can guarantee some performance SLAs, it would cost more. For example, customers can get dedicated servers, SSD drives, and so forth, but they would incur extra charges. Thus, when customers express dissatisfaction about performance, they are sometimes referring to the cost-performance metric. Customers may also experience unexpected downtimes and outages, which could be due to the cloud SP or a customer’s lack of specific expertise regarding the cloud SP’s environment.
  • Cost and billing: Just over half of all enterprise public cloud customers surveyed encountered higher costs than what they had anticipated. The specific areas where the expenses exceeded the budget are training, migration, and management. This also highlights the difference between expectation and reality as well as the relative challenges in accurately calculating the cost of operations on public cloud. While public cloud services save on up-front capital expenses, there are many cloud-related tools and policies that IT staff must master to manage the cloud efficiently. While spinning up resources (e.g., virtual machines [VMs] and storage) in a cloud is very easy, it can also lead to VM sprawl and numerous unused VMs or zombie VMrelated files. Customers must carefully plan storage tiering, which is essential at a time when the amount of data is exploding. All of these factors can easily result in public cloud usage costs exceeding the initially planned costs. Another cost that IT may not clearly plan for is the bandwidth cost incurred for transferring data in and out of cloud. Further, costs related to cloud security, refactoring applications, and cloud management may all turn out to be more than what was planned for in the beginning.

Private Cloud — Operational Costs, Limited Expertise, and Limited Flexibility

The top challenges reported by private cloud customers today are operational costs, limited tooling and skill sets, lack of access to new technologies, data protection challenges, and scalability limitations. Private cloud can involve substantial up-front costs in the acquisition of hardware and software (especially for offerings with limited flexibility in financing), which is typically followed by operational costs related to maintenance, upgrades, management, and licensing fees as well as other costs related to running the datacenter. Also, when enterprises implement a private cloud, they must hire highly qualified IT staff, which will be expensive and may be hard to accomplish. For many leading-edge technologies such as artificial intelligence/machine learning (AI/ML) and Internet of Things (IoT), there’s a shortage of skilled labor. In terms of scalability, most private clouds won’t be able to match the major public cloud providers such as Amazon, Microsoft, or Google.

  • High ongoing costs
  • Limited expertise with private cloud stack
  • Ability to protect data
  • Lack of ability to scale rapidly
  • Limited flexibility to select resources and lack of access to value-added services

HYBRID CLOUD BENEFITS — ADDRESSING ALL-IN CHALLENGES AND PRODUCTIVITY

Both public and private cloud platforms provide enterprises with the core attributes of cloud, which are efficiency and agility in the consumption of resources for workloads. At the same time, the unique benefits of public and private cloud platforms complement each other — especially in the top areas of concern reported by customers. Specific areas where this complementary nature can be seen are in meeting security needs and providing access to a broad ecosystem, where a mix of public and private cloud platforms allows organizations to use the appropriate platform to meet compliance and security needs without compromising agility for other workloads or limiting access to emerging services for new initiatives or pilot projects. Another area is in balancing scalability needs and budgets by allowing a baseline of predictable and high data transfer operations to be executed on-premises while using public cloud for rapid scaling and application expansion needs.

Included also in this study of public, private, and hybrid cloud customers is a comparison of business and operational metric improvements between hybrid cloud customers and all-in public and private cloud customers. Analysis of the results reveals that hybrid cloud customers:

  • Are able to address a majority of top cloud challenges reported with all-in approaches, and customers observe an increase in performance along each of these factors
  • Report similar or better improvements along business and operational metrics, compared with all-in customers
  • Observe benefits along more factors (cost, speed, revenue, risk, etc.) as a result of hybrid cloud investments, compared with all-in customers

Download this report from Dell EMC and Intel® to learn more.

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