Only a few years ago, true hybrid cloud remained elusive. 

A 2020 report showed that 85% of IT decision makers from around the world considered hybrid cloud the ideal IT operation model but 69% complained that embracing hybrid cloud is taking longer than anticipated. Today, IT leaders are knocking down walls and silos that once separated public cloud, co-located or on-premises data centers and edge computing. They’re embracing and managing complexity with hybrid multicloud systems that run applications and manage data across various infrastructures and managed services. This is the path forward for the foreseeable future.

“We’re in an environment now where every enterprise is a multicloud operation,” Steve McDowell, chief analyst at NAND Research told The Forecast.

The State of Multicloud Report 2024 by Cockroach Labs showed that 83% of companies with more than 5,000 employees are running hybrid or multicloud infrastructure, compared to 72% of companies with fewer than 5,000 employees. The report stated that multicloud is generally adopted for business reasons, not technical reasons. Regulatory constraints and concerns about cloud vendor lock-in are the top drivers of multicloud adoption.

And So the World Turns

McDowell said that five to seven years ago, many enterprises thought they would move their IT operations to public cloud service as they rushed to implement a public “cloud-first” strategy. The dust is settling after new tools and services, new practices and strategies put hybrid multicloud capabilities into the hands of IT teams, helping them manage sprawling complexities and giving them better control of the resources they use to keep their enterprises competitive and innovative. 

Then rude awakening swept across the IT world in 2023, according to Rajiv Ramaswami, President and CEO of Nutanix.

“People [became] much more circumspect about what goes in the public cloud,” Ramaswami said.

There are widely known examples. 

David Heinemeier Hansson documented how HEY, a born-in-the-cloud email service provider that moved away from public cloud and saved over $1 Million. He also reported how X.com optimized their use of cloud service providers and began doing more on-premises, which reduced monthly cloud costs by and cloud data storage size by 60%. Cloud data processing costs dropped by 75%.

“I'm always going to have critical data and critical workloads that are going to live close to home,” he said. “And then where it makes economic sense, I will have them in the cloud. Managing that cross-cloud complexity is challenging. While we're embracing this reality, generative AI showed up. It's different from other workloads.” 

Savvy companies that can leverage the right tools and approaches to adopt multicloud without introducing too much complexity will continue to profit from multicloud, reported The Register.

“Cloud is changing how we think about IT,” McDowell said. “But enterprises have figured out it doesn't always make economic sense to go to cloud,” McDowell said. “And not all workloads belong to the cloud.” 

Compliance, governance and other reasons kept many enterprises from running certain applications in public cloud services. 

“So they put pockets of workloads everywhere,” McDowell said. “And managing that is complex.” 

Rapid Innovation Around Hybrid Multicloud

The rise of cloud services taught IT professionals they don't have to buy and manage hardware when instead they can rely on consumption-based services. McDowell pointed out HPE Green Lake, which delivered as-a-service infrastructure for on-premises needs. All the while, hypervisor and hyperconverged infrastructure technologies allowed IT teams to build and manage their own cloud-like data centers. 

Emboldened IT leaders are inspiring (often competing) vendors to work together rather than block or ignore interoperability challenges.

“Yeah, it’s an era of hybrid multicloud for sure,” McDowell said. 

“There are several things behind that. One is AI. It is kind of a cloud-first play. The other is the macro environment for server sales is not healthy. The only bright spots are on AI-related sales.” 

However, enterprises still need more computing resources, and they need to manage the growing number of technologies and services they’re using. This gives rise to FinOps to optimize their maturing hybrid multicloud operations.

“Now I have tools that allow me to drive IT with kind of a business focus maybe for the first time in our industry,” McDowell said, describing how IT leaders feel when they have confidence in their IT operations. 

“Before, it was like the business needed X number of compute cycles. Well, I had to buy racks full of servers. Now I have options, and the tools are becoming very sophisticated. Some of them are AI-enabled, which allows me to take advantage of all of the options out there very affordably.”

McDowell said IT teams have to deal with so many moving parts, pitches for new products and interall requests to try new things. It drives the desire to move everything to a public cloud service, but innovation around hybrid cloud is driving many to reconsider. For example, HPE “infrastructure as a service” Green Lake line.

“We haven’t seen anything quite like what we're seeing with hybrid cloud or even on-prem as a service, which is a big threat to public cloud,” McDowell said. 

“All the big guys have an on-prem offering, but every OEM today has a service. Even the storage guys like Pure Storage offer as-a-service, one of their fastest-growing segments. I've never seen anything quite like this. In the old days, maybe we leased equipment but it's still self-managed. With a lot of these consumption-based offerings, it's like deploying cloud and we have this rich set of tools around that.”

McDowell sees history repeating itself.

“It's Similar to the 1960s IBM mainframe, where you would dial in and run your punch cards up through whatever the equivalent of a modem was in 1968, and you'd pay by the minute to use it. Timeshare went away, and now it comes back. Everything's cyclical in technology.”

Smart Way to Hybrid Multicloud

The Cockroach report stated that CIOs are seeing hybrid multicloud as a long-term architectural state, not a transitional phase. Data synchronization, disaster recovery and cost optimization are just a few of the things it does well. Rationalization of cloud investments, more discerning about what workloads run in public cloud or on premises, driving a desire for more control over IT infrastructure.

Operational standardization and simplification through automation is helping manage IT operations and Kunerineties is helping run applications across different cloud providers and on-premises, according to the Cockroach report. Nearly one-thrid of IT leaders use 3 or more cloud service providers, which could lead to rapid adoption of automation and ML tools to control complet operations.

On the other hand, the report continued, adoption may ultimately contract among companies that buy into the hype around multicloud without a real need for it, and among companies that aren’t able to implement it efficiently, driving up its cost and reducing their ROI.

“Know what you’re getting into,” said McDowell. “Map it out with an eye on the future.”

Editor’s note: Learn more about Nutanix Cloud Platform and how it can be the foundation for hybrid multicloud operations. 

Ken Kaplan is Editor in Chief for The Forecast by Nutanix. Find him on X @kenekaplan.

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