Report: Hybrid Cloud Once Again Outpacing Public Counterparts

Is public cloud proving too expensive for enterprises?

That’s a main contention hiding within the findings of a new report from Nutanix.

The company, whose software unites private, public and distributed clouds, recently released its second global Enterprise Cloud Index survey and research report, and the main discovery may come as a surprise — nearly three-quarters (73%) of respondents said they are moving some applications off the public cloud and back on premises, with 22% of those users moving five or more applications.

Nutanix attributes these results to several factors, but chief among them lies concern about the cost of public cloud services over time.

Nutanix’s Wendy Pfeiffer

Wendy Pfeiffer, Nutanix CIO, said much of the reason for cost disparity between public cloud and on premises comes down to the way an application’s code is written. And when the code doesn’t mesh with a public cloud’s technical settings, it starts consuming a large amount of resources.

“Even though public cloud is easier to spin up and seemingly less expensive, those cloud bills get outsized,” Pfeiffer told Channel Futures.

Longtime players within the channel may not be shocked by this. As the buzz around cloud gained traction a decade or so ago, insightful observers warned that shifting from capex to subscription models might pay off in the short term but would likely hit hard after several years. Those predictions appear to be coming to fruition.

Still, hybrid cloud appeals to enterprise for other reasons besides reducing expenses. Security remains one of the biggest motivations. Indeed, in Nutanix’s report, and in others that other technology vendors and analyst firms have released this year, IT professionals say hybrid cloud provides the most secure operating model.

For its part, the Nutanix Enterprise Cloud Index found that more than a quarter of respondents (28%) chose the hybrid model as the most secure — substantially surpassing those who chose a fully private cloud/on-prem model (21%) and more than twice as many as those who chose traditional (non-cloud-enabled) private data centers (13%). Hybrid cloud offers the flexibility to choose the right setup to meet specific security requirements. Further, hybrid cloud provides more visibility and control than public cloud alone, Pfeiffer noted.

The possible trouble comes in implementation. That’s a complex process, Pfeiffer said, and enterprises need help. Channel partners, especially those who are “truly consultative,” she said, are well positioned to provide the necessary expertise to make sure technologies span multiple clouds, and smoothly.

That said, Pfeiffer added a caution. Speaking as a CIO, she wants partners to stop talking about “cloud-first” and “cloud-only” IT models.

“I think those days are behind us, but many vendors and partners who approach me are still saying that,” she said.

Instead of pitching buzzwords, focus on a customer’s actual needs. Public cloud may not meet those requirements. A pure on-premises deployment may not be right, either. Few IT experts want to lock their organizations into years-long contracts with specific vendors, too, Pfeiffer said, which adds to the difficulty.

“I am hoping that channel partners will broaden their own portfolios and offer a mix of technologies and tools that span different consumption models,” she said.

The dilemma underscores the theme of the 2019 Nutanix report, that creating and executing upon a cloud strategy is a multidimensional undertaking.

“Cloud computing has become an integral part of business strategy, but it has introduced several challenges along with it,” Ashish Nadkarni, group vice president of infrastructure systems, platforms and technologies at IDC, said. “These include security and application performance concerns and high cost. As the 2019 Enterprise Cloud Index report demonstrates, hybrid cloud will continue to be the best option for enterprises, enabling them to securely meet modernization and agility requirements for workloads.”

Other statistics revealed in the 2019 Enterprise Cloud Index include:

• Nearly a quarter (23.5%) of respondents are not using any form of cloud; however, respondents reported that within a year, the number of enterprises with no cloud deployments will fall to 6.5%, and in two years’ time, the figure will drop by more than half to 3%. Regionally, the Americas reported a slightly lower incidence of non-cloud use (21%) compared to EMEA (25%) and APJ (24%).
• Enterprises are striving to integrate cloud computing with their digital transformation goals. Nearly three-quarters (72%) of 2019 respondents said digital transformation was fueling their cloud implementations, and 64% said that digital transformation was the top business priority in their organizations.

Market research firm Vanson Bourne collected and analyzed the Enterprise Cloud Index data on behalf of Nutanix. Vanson Bourne surveyed 2,650 IT decision-makers across multiple industries and business sizes, in 24 countries.