Many large businesses are shifting their services away from traditional cloud providers, opting instead for on-premises or hybrid architectures. This trend often stems from the realization that the original objectives of their cloud initiatives—such as cost savings and streamlined processes—were not fully achieved. So, why do companies feel their goals were unmet?

There can be many reasons a business feels their cloud strategy fell short from providing the business objectives they desired. Many of the internal issues are based around business culture and process. `

The Role of Partner Programs

Cloud service providers (CSPs) typically offer partner programs that seem beneficial at first glance. These programs involve consulting firms, managed services providers, and IT service management practitioners, all of which are designed to assist customers on their cloud journeys. To ensure a consistent quality of service, CSPs mandate training and certification in their virtualization technologies. They incentivize partners to invest in these trainings by placing them into tiered categories, with higher tiers receiving better business opportunities and profit-sharing terms.

While the existence of a “gold” or “platinum” partner may give customers a sense of security, the focus on the CSP’s “well-architected” framework can often overshadow actual customer needs. This leads to a disconnect between what clients require and what partners deliver.

The Disconnect in Cloud Spending

CSP partners typically receive a percentage of a client’s cloud service bill, adding an ongoing financial incentive that may not align with the client’s best interests. This creates a scenario where:

1. Best Practices Over Cost: Partners often deploy services based on CSP best practices, prioritizing functionality over cost considerations.
2. Incentivized Spending: Higher monthly cloud expenditures translate to larger commissions for partners, encouraging them to push for increased cloud usage.
3. Profit-Sharing Arrangements: Partners may also benefit from agreements with third-party technologies, further incentivizing increased cloud spend.
4. Vendor Lock-In: Partners are encouraged to make clients reliant on specific cloud technologies, limiting their flexibility and options.

Managing Costs Effectively

Cost management remains a significant challenge in cloud deployments, often misunderstood by many organizations. Successful cloud architecture requires a keen understanding of how various services impact overall costs.

Businesses face fluctuating budgets based on market conditions, making cost control essential. Strategies include:

• Negotiating with Multiple Providers: Building relationships with various CSPs can enhance negotiating power for better pricing.
• Proactive Cost Controls: Implementing mechanisms for cost savings can prevent the need for staff reductions or other negative budget cuts during challenging times.

Training and Solution Architecture

Unfortunately, training and certification programs often emphasize selling services rather than architecting tailored solutions for customers. Many services that drive up costs, such as monitoring, automation, backups, and orchestration, are appealing due to their ease of use. For example, managed database services offer convenience but can quickly escalate in price as features like backup retention and high availability are utilized.

Some companies have eliminated technical staff and replaced them with non-technical staff to run infrastructure. These non-technical staffers are dependent on graphical user interfaces provided by the cloud service provider.

The Importance of Business Continuity

Business continuity and disaster recovery considerations are increasingly pushing organizations toward hybrid architectures. Even when leveraging multiple availability zones, certain services—like provisioning APIs and DNS—can fail, leading to potential disruptions.

By employing a multi-cloud strategy, businesses can enhance redundancy and resilience:

• Flexibility in Partnerships: Establishing relationships with various CSPs provides more options, enabling businesses to adapt to changing conditions.
• Mitigating Risk: Having alternative service agreements can protect against sudden price increases or unfavorable policy changes.

Protecting Intellectual Property

Maintaining a local environment for your intellectual property ensures greater control and security. Relying solely on external providers can jeopardize access to critical data and limit technological options. A well-designed architecture allows for seamless service deployment across any location at any time.

The Challenge with Managing a Hybrid Cloud Strategy

Hybrid clouds require a broader expertise in cloud virtualization stacks, jumping between AWS, Azure and GCP can be challenging. Every cloud service provider offer different features, capabilities and shortcomings, while offering basically the exact same service. 

Hybrid cloud architectures require management of a Wide Are Network, where you will have to manage network topology, IP addressing, routing and firewalls. Managing VPN tunnels and gateways across the different cloud service providers can be challenging. There are several Software Defined Networking frameworks to choose from to manage this correctly.

Conclusion

The ability to “rearchitect” services dynamically to align with evolving business objectives is vital for success. By maintaining flexible infrastructure management, organizations can swiftly deploy new services and adapt to broader changes in the market landscape.

Market studies on the transition to hybrid cloud architectures indicate several key trends and insights:

1. Growing Adoption of Hybrid Cloud: Many organizations are moving towards hybrid cloud models. According to a recent study by Gartner, over 75% of enterprises are expected to adopt hybrid cloud by 2025, driven by the need for flexibility, scalability, and cost control.
2. Cost Management: A report from Flexera highlights that cost management is a primary concern for 65% of organizations using cloud services. Companies are increasingly looking for solutions that allow them to monitor and optimize cloud spending effectively.
3. Business Continuity and Resilience: Research by IDC shows that 60% of enterprises prioritize hybrid cloud to enhance business continuity and disaster recovery capabilities. This is driven by the recognition that relying solely on one cloud provider can expose businesses to risks from outages or service disruptions.
4. Data Sovereignty and Security: Studies indicate that concerns about data sovereignty and security are significant factors pushing organizations towards hybrid models. According to a report from McKinsey, 30% of companies cite regulatory compliance as a reason for adopting hybrid solutions, allowing them to keep sensitive data on-premises while leveraging the cloud for less critical workloads.
5. Skill Gaps and Training: A survey by Deloitte found that 70% of IT leaders believe there is a skills gap in their organizations regarding cloud technologies. This has led to a demand for better training programs that focus not only on selling services but on effective cloud architecture that meets business needs.
6. Vendor Lock-In Concerns: Research from the 451 Research Group highlights that 45% of organizations express concern about vendor lock-in with single cloud providers. Hybrid solutions are viewed as a way to maintain flexibility and avoid dependency on a single vendor.
7. Performance and Latency Issues: Studies show that performance considerations, such as latency and data transfer speeds, are also driving the hybrid cloud adoption. Organizations seek to place critical workloads closer to their operations while utilizing the cloud for less time-sensitive tasks.

Overall, these market studies reveal that the shift to hybrid cloud architectures is driven by a combination of cost concerns, security needs, operational flexibility, and the desire for enhanced business resilience.

https://www.gartner.com/en/conferences/na/infrastructure-operations-cloud-us/agenda?ef_id=:G:s&msclkid=cbf1e82641af1c6b59b28f300b376c8e#270095064&utm_source=bing&utm_medium=cpc&utm_campaign=EVT_NA_2024_LSC43_CPC_SEM1_NONBRANDBING&utm_adgroup=1153389431327247&utm_term=hybrid%20cloud%20summit&ad=72086998314116&matchtype=p