Cloud-based compute, networking and storage infrastructure, and cloud-native applications, are now firmly on the radar of CIOs -- be they in startups, small businesses or large enterprises. So much so that, whereas a few years ago the question facing them was "Which workloads should I move to the cloud?", it's now becoming "Which, if any, workloads should I keep on-premises?". While most organisations will probably end up pursuing a hybrid cloud strategy in the medium term, it's worth examining this turnaround, and the reasons behind it.
The general background, as ZDNet has explored in recent special features, is the competitive pressure for organisations to undergo a digital transformation based on cloud-native applications and methods such as DevOps, in pursuit of improved IT and organisational performance.
However, it's unlikely to be all over for the enterprise data center just yet: businesses still need to 'keep the lights on' while modernising their app portfolios, and there are plenty of legacy applications in use where migration to the cloud is difficult and/or expensive.
Data centre trends
The Uptime Institute (part of the 451 Group) publishes an annual Data Center Industry Survey, examining the trends driving the IT infrastructure market. The most recent published survey is for 2016, and the 2017 results are imminent (at the time of writing).
The Uptime Institute's survey population includes respondents from both enterprise IT and service providers (including cloud and colocation vendors). The results for the last few years support the view that the focus is moving from on-premises to third-party data centres:
This graph shows that around half of enterprise IT departments have seen budget increases, whereas the figure is considerably higher for colocation vendors (averaging 75% over the last four years). No surprise, then, that colocation vendors have consistently built new data centres at a higher rate than enterprises, although there is evidence of a slowdown.
Still, it looks as though the migration of enterprise IT assets to third-party data centres still has a long way to go. Here's a summary of respondents' asset-location estimates from the Uptime Institute's 2016 survey:
Although the level of enterprise public cloud adoption seems low compared to other surveys (see below), there's no doubt about the general trend, which is towards more public and private cloud, and less traditional on-premises IT. Here are IDC's estimates of worldwide expenditure in the IT infrastructure market:
"In 2017, spending on IT infrastructure for off-premises cloud deployments will experience double-digit growth across all regions in a continued strong movement toward utilization of off-premises IT resources around the world. However, the majority of 2017 end user spending (57.9%) will still be done on on-premises IT infrastructure which combines on-premises private cloud and on-premises traditional IT. In on-premises settings, all regions expect to see sustained movement toward private cloud deployments with the share of traditional, non-cloud, IT shrinking across all regions," said the analyst firm.
What's driving the move to the cloud? A rich source of data is RightScale's annual State of the Cloud survey, which has tracked the cloud-related activities of enterprises and SMBs for the past five years.
When it comes to the perceived benefits of cloud-based computing, the main attractions have consistently been 'faster access to infrastructure', 'greater scalability', 'higher availability' and 'faster time-to-market'. Note also that there's a rising trend for citations of these four key cloud benefits (41-53% in 2013 v. 51-62% in 2017):
There's also a gaggle of secondary benefits, cited by significantly fewer survey respondents (<40%): 'business continuity'; 'geographic reach'; 'higher performance'; 'moving CapEx to OpEx'; 'cost savings'; and 'IT staff efficiency'.
All of the perceived cloud challenges in 2017 are cited by 25 percent or fewer of respondents, headed by 'lack of resources/expertise', 'security' and 'managing cloud spend'. There's a noticeable drop in most challenges -- 'managing cloud spend' and 'governance/control' are the exceptions -- between 2016 and 2017, with 'performance' now an outlier, cited by just 11 percent:
Given the general prevalence of cloud benefits over cloud challenges, it's no surprise to find that RightScale's 2017 respondents run a high proportion of workloads in the cloud -- 79 percent (41% public, 38% private), leaving just 21 percent running on non-cloud infrastructure:
The figures also show that small businesses are keener on public cloud than enterprises, which -- as you might expect -- run a higher percentage of workloads on private cloud or non-cloud infrastructure.
RightScale's survey data holds no surprises when it comes to patterns of public cloud adoption, with long-time market leader Amazon Web Services (AWS) well out in front, followed by fast-rising Microsoft Azure with Google Cloud Platform in third place. The fact that companies like Rackspace, HP and VMware have bowed out of the public cloud market in recent years indicates the dominance and competitiveness of the leading vendors:
Similarly, VMware's dominance of the private cloud is no surprise, the company taking first place with vSphere/vCenter and third with vCloud Suite, separated by Red Hat's OpenStack in the runner-up spot. Both of Microsoft's private-cloud solutions -- System Center and Azure Pack/Stack -- are on the increase, although still only deployed by 16 percent and 14 percent of respondents respectively:
Our final extract from RightScale's data concerns the initiatives that respondents expect to implement in 2017 compared to the previous year. As the graph shows, the focus is largely on moving more workloads to the cloud (particularly the public cloud) and optimising the cost of the ones already residing there:
Significant showings for 'implementing a cloud-first' strategy' and for DevOps-related initiatives ('expanding use of containers' and 'implementing CI/CD in the cloud') also indicate that cloud-native apps are uppermost in IT decision-makers' plans.
There's plenty more data and analysis to be found in RightScale's State of the Cloud surveys. A recent webinar from the company exploring detailed cloud price comparisons for compute between AWS, Azure, Google and IBM is also worth a look. And don't forget to check out Tech Pro Research's survey results, summarised elsewhere in this special report.
Multi-hybrid cloud IT
What's clear from surveys and analyst reports is that organisations are in a transitional phase between largely on-premises and largely cloud-based IT, with some form of flexible multi-hybrid cloud arrangement the likely optimal solution for most workloads.
In conversation with ZDNet's sister site Tech Pro Research earlier this year, Kamal Anand, vice-president of A10 Networks' cloud business unit, summed up the current situation like this:
"There are two things going on here. First, the cloud providers are building more and more services, because they want to keep customers on their platform -- and once you get sucked in, sometimes the cost starts spiralling up. But most of the larger application guys don't want to get too tied to particular infrastructure; they want choice -- if nothing else, to negotiate better prices. So having an infrastructure that spans across clouds is a critical requirement."
"A second trend we've seen, which is kind of interesting, is there's a bunch of companies that have gone to the cloud, and then they're finding -- especially as they increase scale -- that the economics are in favour of moving the application back to the private cloud. What you see is, the core predictable capacity is coming back to the private cloud, but they're using the public cloud for excess capacity or bursting on an as-needed basis. I think the jury's out: I don't think it's all going to be public cloud, nor are companies saying it's only going to be traditional data centres -- it'll be a mix of different clouds for different workloads and use cases. We [A10] are big believers in multi-hybrid clouds."
"My thesis is that, in the next year or so, the major cloud providers -- Amazon, Google, Azure -- will move towards similar offerings, at least at the core. There will be some spikes -- more analytics here, something else there, but the core infrastructure will be similar from a price and capability perspective."
On the question of why many workloads -- in enterprises, in particular -- are still running on-premises, often in 'traditional' architectures rather than private clouds, ZDNet recently sought some pointers from Ashesh Badani, vice-president and general manager of OpenShift at Red Hat. Badani recounted a customer conversation that doubtless rings many bells: "The CIO of a large credit-card company said to me: 'I have 700 applications, and a dozen or so can be done in cloud-native style -- but what am I supposed to do with the other 680?'" When it comes to modernising legacy applications, there's a lot involved, as Badani illustrated with a customer example from KeyBank, a regional bank in the US:
"They [KeyBank] had this big monolithic digital banking application with quarterly update cycles and a multi-step approval process before any change could be made to the app. They said: 'This is crazy, this is not DevOps, we can't update a digital app once a quarter -- we need to be able to do it, if not daily, then weekly'. So they went through a process, asking: 'How can we take this monolithic app and see what parts of it can be broken into microservices; how can we introduce this notion of DevOps; how can we introduce more automation -- how do you have more trust in the system so not everyone has to sign off for the app to get pushed live?' They did that for a few months, and we [Red Hat] provided the platform [OpenShift] to make all these things easier -- to run containers in a hybrid cloud, support developer productivity, manage it operationally, and so on. But ultimately the behavioural and process change needs to come from within the organisation -- although Red Hat can can help via our professional services team and our Open Innovation Labs."
IT may be moving towards a scenario where cloud-native applications are developed and deployed rapidly on a flexible mix of private and public cloud infrastructure, with the optimal combination determined on a per-app basis by factors such as performance (latency), cost, security and compliance. In this scenario, CIOs will increasingly become trusted brokers of IT resources for business units, allowing the latter to put innovative ideas into practice quickly and reliably. In the meantime, though, there's a lot of modernisation work to do on legacy enterprise application portfolios, which will keep the traditional on-premises data centre around for a while yet.