Achieving the promise of cloud with a multi-cloud strategy

Background: Contextualizing multi-cloud environments

Modern businesses increasingly rely on cloud infrastructure for optimizing operations, generating innovative solutions, and remaining competitive. As a single cloud provider may not be a perfect fit for all enterprise needs and cost requirements, many organizations adopt multiple clouds for different workflows, departments, or regions.

Managing an array of vendors and environments internally brings its own set of challenges, such as:

• losses in efficiency
• difficulty getting data or systems to operate seamlessly across environments
• security vulnerabilities

Making multi-cloud work requires two critical components: a long-term cloud strategy that speaks to the business’s overarching goals, and a single, flexible, and scalable platform that bridges silos and environments, thereby providing a streamlined, integrated cloud management experience with the multi-cloud advantages of flexibility, best fit, and greatest ROI.

Cloud’s critical role in modern business

Businesses today see cloud technology as a foundation for efficient, secure, and competitive operations: 85% of businesses have or will be using multi-cloud services by 2023.¹

Organizations are leveraging cloud technologies across their departments and strategies: In a 2022 survey of more than 898 business and IT leaders around the world, 70% stated that cloud is the most critical aspect of their digital transformation strategy.² In Deloitte’s study, 95% of respondents agreed or completely agreed that industry clouds will be a catalyst for transformation.

Flexible means not locked-in

Multi-cloud empowers businesses to get the right service and the right price

Despite businesses seeking out cloud for its advantages in flexibility, scalability, and agility, many organizations find themselves frustrated when locked into one cloud provider (and locked out of services offered by the provider’s competitors).

The Deloitte study shows that one-third (33%) of businesses are concerned about vendor lock-in/lock-out as a top three concern when implementing industry cloud solutions. Frost & Sullivan data aligns with this perception, as 28% of respondents cite vendor lock-in as the reason they remain on-premises instead of migrating to cloud.

Most businesses (80%) agree that multi-cloud environments circumvent lock-in and provide their organizations with autonomy on cloud-related decisions.⁴ Realizing these benefits is not always the same as recognizing their potential: Organizations may need help in moving from multiple but disparate clouds or hybrid environments to a sound multi-cloud strategy.

Optimized and strategically utilized multi-cloud environments can provide cloud advantages without being limited by vendor lock-in/out.

Attaining best-in-class solutions

Multi-cloud strategies broaden choices and align costs with needs

Any single cloud provider may not have all the best services for every customer and vendor lock-in can stand in the way of finding more appropriate solutions elsewhere. Being limited to one cloud’s governance and operational models can create unintended restrictions such as:

• Disparate solutions with limited interoperability, which raises costs and creates inefficiencies
• Misalignment between a company’s internal skill sets and the cloud provider’s solution, which impedes agility and responsiveness to the business’s needs
• Impacts time to market and other important metrics, which are particularly concerning as innovation/time to market is the “most compelling” benefit of using an industry cloud⁴

Deloitte’s study shows that 84% of businesses believe multi-cloud creates scalability for data and app processing, and 78% state it enables better distribution and data interoperability than other options. Survey respondents noted that multi-cloud’s cross-cloud management and orchestration capabilities address these key advantages.

Multi-cloud agility, an innovation imperative

Business priorities have recovered from “keeping the lights on” in 2020 to refocus on growth and innovation. Cloud is the leading technology expected to help meet these demands, cited as “crucial” or “very important” by 73% of organizations.

Cloud used to be mostly about mitigating costs through more efficient operations. Now, cloud has also become a vital instrument for driving innovation. Cloud’s increased business value means any inefficiencies or operational challenges will be more keenly felt across both top- and bottom-line objectives.⁵ Deloitte’s research underscores cloud’s growing importance across an enterprise: 88% of businesses say that cloud investment is driving a positive increase in efficiency and agility, and 56% state innovation/time to market is industry cloud’s greatest advantage.

When multi-cloud environments are managed well, they can reduce costs associated with different operating models and mismatched skill sets while bolstering innovation, thereby increasing ROI.

Avoiding the security pitfalls of multiple clouds

Security and compliance can be eased by cloud adoption but remain the top cloud-related concern for IT leaders.² Deloitte’s study indicates companies recognize cloud’s advantages in security and creating zero-trust based protocols:

• 83% of respondents say cloud mitigates risk
• 82% use cloud-based services such as application security, data privacy, threat detection, and monitoring and response
• 64% say cloud services help detect and address security risks and threats.

However, data flow and system access in multi-cloud scenarios can lead to vulnerabilities in the gaps between environments and expand a company’s attack surfaces. A comprehensive, integrated multi-cloud security approach with a secure, unified technology platform can enable an efficient zero-trust security framework while accelerating efficiency and interoperability across disparate cloud environments.

Internally managing multiple environments and access throughunsecured end points can lead to vulnerabilities, underscoring the need to use solutions and partners that provide consistency, visibility, and security across environments.

Ensuring suitable, scalable cost structures

Multi-cloud strategies help keep costs in check and aligned with usage

The benefit of cloud providers’ ability to scale with data and compute needs relieves businesses of the risk of over- or under-provisioning data centers.

Offloading applications to the cloud reduces the challenge of maintaining infrastructure for costly data centers. Cloud providers managing huge data centers at scale address challenges for firms in sourcing hard-to-find and costly skills. These and many other factors contribute to important cost savings and improve the ROI for cloud investments. In Deloitte’s study, 83% of businesses say cloud investment has helped reduce or optimize costs. But some ROI is not necessarily optimal ROI: Unanticipated cloud costs and/or poorly managed, complex cloud deployments can quickly erode cloud’s cost benefits. “Cloud cost optimization” is the top reason companies engage third-party services providers to manage their cloud environments, as noted by more than half (51%) of businesses.³

Together, Deloitte and Red Hat address both sides of the equation:

• Deloitte manages costs and fees by drawing on experience in management, billing, accounting, and financial operations (FinOps)
• Red Hat reduces costs and improves efficiency by increasing compute power and productivity and minimizing platform costs through infrastructure and operations tools

Top 4 reasons for cloud ROI erosion

1. Unexpectedly high compute costs and unclear pricing structures: 35% of businesses repatriated apps on-premise due to higher than anticipated cloud costs³
2. IT teams juggling multiple cloud contracts, vendors, and disparate environments, thus increasing costs and reducing cloud efficiency
3. High migration costs and ramifications from not having the right internal skill sets to run apps and workflows on the cloud
4. Inability to track cloud efficiencies and metrics to determine a baseline for ROI

References

¹ Frost & Sullivan, The State of the Cloud 2021: The Hybrid, Multicloud Forms the Foundation to Digital Organizations, December 2021 (source for all Frost & Sullivandata quoted here unless otherwise stated).
² Frost & Sullivan, 2022 survey of 898 IT and business leaders, results not yet published as of date of this report.
³ Frost & Sullivan
⁴ Deloitte, US Future of Cloud Survey Report, 2022. 
⁵ Frost & Sullivan, Perspectives from the 2019 Frost & Sullivan Cloud User Survey and Perspectives from the 2018 Frost & Sullivan Cloud User Survey
⁶ 2020 Frost & Sullivan Global Cloud User Survey