Chris Jackson, Chief Product and Technology Officer at Six Degrees, offers his thoughts on cloud strategies and the pressing nature of aligning them with Digital Transformation goals.
The rush to the cloud continues at an unrelenting pace. The public cloud segment of the market alone is expected to grow by over 20% this year to US$679 billion, according to Gartner – more than double the growth rate for the IT industry as a whole. To give this success story some wider context, back in 2010, the entire worldwide cloud services market was making headlines as it headed for a comparatively small US$70 billion in value.
Fast forward to today, and, as Gartner puts it, ‘cloud has become essentially indispensable.’
Yet, the cloud story has become far more nuanced than just huge growth figures, particularly as the market matures and organisations build their understanding of the different models and service providers. For example, Gartner also makes the point that the tables are turning for cloud providers as cloud models no longer drive business outcomes, but rather, business outcomes shape cloud models. This is an important observation – not least because it should encourage IT leaders to seek out an approach to cloud implementation that ticks as many performance and financial boxes as possible.
To an extent, this shift in emphasis is driven by the experiences of CIOs and other tech leaders, many of whom haven’t seen the full range of benefits promised by the cloud concept translated into real-world efficiencies. Among the more high-profile issues are hidden bandwidth costs and overly complex payment plans, which contributed to a growth in trends such as public cloud repatriation.
In 2023, for example, issues including high fees for transferring data out, technical restrictions and committed spend discounts imposed by the leading public cloud providers prompted Ofcom to refer the UK cloud market to the Competition and Markets Authority (CMA) for further investigation. It forms part of an increasingly complex picture which also shows that even though the public cloud market is still booming, over 70% of organisations of varying sizes are planning full or partial repatriation of compute resources from the public cloud, according to a 2023 survey by IDC.
The right workloads in the right place
Given these fascinating trends, what are the options for organisations and their technology leaders who want to focus their cloud spend so it aligns with their target business outcomes?
For many organisations, rather than adopting a starting point dictated by a particular type of cloud infrastructure, a better strategy is to ensure each workload is in the right place, irrespective of whether this is on-premises or hosted in a private or public cloud environment. This kind of workload-centric approach can help focus IT investment more precisely against specific scale, performance and compliance parameters.
More specifically, a hybrid cloud approach could result in hyperscale infrastructure being used for requirements that must be delivered at scale. At the same time, on-premises technologies or private clouds can be adopted for specific workloads where security is paramount, where redundancy, resilience and Disaster Recovery are key requirements or in organisations where legacy technologies continue to play an important role.
As recently as 2021, for example, over 90% of the UK’s financial firms were still relying on legacy technology to some extent. With a workload-centric approach, organisations can carefully select the most appropriate cloud execution venue for any legacy technologies that require modernisation or form part of a wider Digital Transformation strategy. In some cases, ageing software will work most effectively on legacy hardware from the same era, underlining the value of a pragmatic approach that doesn’t go ‘all-in’ with one infrastructure option.
In the current UK context, where Digital Transformation is a key focus for many organisations, the scalability and adaptability of hybrid cloud infrastructure supports long-term growth in a controlled environment. This scalability is especially relevant for companies undergoing significant Digital Transformation processes by offering a stable platform for innovation and expansion.
AI innovation will require effective cloud infrastructure
In the last 12-18 months, cloud strategies have also been subject to a major new transformation trend – the growth of AI. Many businesses are anticipating significant changes in the way they operate, with potential benefits ranging from efficiency gains to creating custom customer experiences and the development of new products. Clearly, organisations will lean heavily on their cloud infrastructure and service providers to ensure any investment in AI can be properly supported.
Effective infrastructure planning and implementation will play a key role. The early adoption phase of cloud technology, characterised by unrealistic expectations and under-planned deployments, offers a cautionary tale for the way organisations choose to approach the implementation of AI. In doing so, they should prioritise issues such as data management and governance, as the success of AI applications fundamentally depends on the quality, structure and security of the underlying data.
In this context, a hybrid approach is likely to offer the best balance of performance and cost that AI-powered applications require. For example, AI’s heavy reliance on GPU processing power is more readily available from the hyperscalers, who have the resources to offer AI-ready compute services that can be integrated with private workloads. Similarly, the ‘as-a-Service’ model can also help deliver the levels of security organisations require without the need to establish the necessary protocols, access controls and authentication required within their own infrastructure. Here, the benefits are significant and range from preventing security breaches and data exfiltration to enabling users to remain compliant with compliance regulations, including those relevant to the process of building or training AI models.
Looking further ahead, the cloud strategies of organisations everywhere will continue to evolve, driven by a dynamic range of factors and the constant influence of tech innovation. Across a huge range of current and emerging use cases, adopting a workload-centric strategy will play a crucial role in ensuring IT leaders can deliver the flexibility, control and positive impact that have driven the entire cloud revolution.