As IT shifts to an as-a-Service model, cloud computing becomes the critical catalyst. Cloud opens up new worlds to enterprises, enabling applications and functionality to be drawn from multiple sources, whether they are public cloud–based resources, private cloud resources or traditional internal data centers. But IT and business executives must strike the right balance between public and on-premises resources, and adapt that balance as business requirements change.
To explore how organizations are progressing on this journey, Forbes Insights, in partnership with Cisco, conducted a survey of 302 top IT executives from across the globe. (See the full report, “When Clouds Connect: How Hybrid IT Is Transforming Enterprises.”) A key finding is that the multi-cloud scenario is becoming increasingly common. Today few companies are either all on-premises or all public cloud. Rather, they employ a mix of services that evolve with their businesses. Workloads are frequently moved between clouds and on-premises systems, depending on requirements.
In many respects, private and public clouds are now on an equal footing, the survey reveals. The costs tend to even out between public and private clouds, and executives are comfortable with the security that is available with public cloud implementations. Plus, they give very high ratings to the levels of service they are seeing from public cloud providers.
This survey finds there are many paths to cloud, and enterprises will need to shift their resources accordingly. The survey sought to identify the “break-even” point between on-premises solutions and public cloud, and where the greatest overall value may be achieved.
Some key findings:
Close to two-thirds of enterprises (65%) have discontinued or scaled back the use of a public cloud service within the past two years. Some public cloud engagements serve as “temporary” engagements that eventually shift back to on-premises implementations as functionality builds. Thirty-five percent left their public cloud service because it was meant to be a temporary engagement.
In most cases, when a public cloud service is shifted, the application or function has been picked up by an internal, on-premises system, or in a similar number of cases, a configuration that pulls in both public and private resources.
Hybrid adoption may be uneven for some time to come. Ultimately, the configuration needs to follow the urgency of business requirements—for achieving time to market and employing the most expedient platform to get there.
A majority of executives, 58%, say their costs per transaction have increased as a result of moving to a public cloud infrastructure. An important way to approach the decision of going with a public or private cloud environment is to evaluate the costs and benefits of making a move. But where is the “tipping point” at which the value of maintaining on-premises or hybrid services surpasses that of subscription-based cloud services?
When looking at estimated total cost outlay for applications and workloads, most executives predict there would be some lag time from the actual migration to the point at which they see return on investment. A majority of executives (62%) predict that it would take two or more years to recoup an investment, if at all, in cloud-to-on-premises migration.
Cost is not as significant a factor in cloud decisions as conventional wisdom suggests it may be. Many executives are looking at other advantages cloud provides, such as agility and growth potential. Accordingly, the survey finds 64% of executives would consider transitioning from public to private cloud services—even if the total investment costs for private cloud were two to three times that of public cloud. Another 23% would consider it even if the total costs were more than three times that of public cloud.
Often, the time involved in moving to public cloud may be an inhibitor, especially with applications that require a great deal of security. The conversion between cloud and on-premises may also require some degree of collaboration and retraining across the enterprise.
Among the most problematic areas for public cloud are security and the flexibility to change or customize applications. Security ranks low in comparison to private cloud, with 46% indicating public cloud is “worse” than private cloud. Where public cloud scores the highest is application performance and operational efficiency. One-third say public cloud is better in terms of supporting large volumes of transactions.
As the importance of hybrid cloud increases, so does getting the private cloud—and especially transitions between the two—right. While the survey finds the level of concern with vendor lock-in is moderate (43%), it points to the need to find ways to transition workloads effectively. Tellingly, many cite difficulty in changing cloud providers. In addition, the ability to perform analytics in both public and private cloud environments is critical as executives weigh potential changes in where and how workloads are run.
This article was written by Hugo Moreno from Forbes and was legally licensed through the NewsCred publisher network.
BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may be used as a generic term to reference the corporation as a whole and/or its various subsidiaries generally. This material does not constitute a recommendation by BNY Mellon of any kind. The information herein is not intended to provide tax, legal, investment, accounting, financial or other professional advice on any matter, and should not be used or relied upon as such. The views expressed within this material are those of the contributors and not necessarily those of BNY Mellon. BNY Mellon has not independently verified the information contained in this material and makes no representation as to the accuracy, completeness, timeliness, merchantability or fitness for a specific purpose of the information provided in this material. BNY Mellon assumes no direct or consequential liability for any errors in or reliance upon this material.