Next Pathway Inc. unveiled The State of Enterprise
Cloud Migrations, a new report that highlights that
businesses are under great pressure to enable digital transformation from the
cloud to generate new revenue streams. Although businesses believe a
multi-cloud strategy has advantages, currently they are selecting one primary
cloud platform to move their enterprise legacy workloads. For this reason,
Cloud Providers are in a race to bring enterprise workloads to their cloud
platform. In the highly competitive cloud market, businesses are being lured to
cloud platforms with industry solutions, faster migration paths and enhanced
capabilities. Cloud Providers understand the benefits of first mover
advantage and are using a range of tactics to gain market share,
including employing their hefty balance sheets to buy business.
The
February 2022 survey of approximately 1,200 IT professionals and decision-makers
also reveals that there are no clear winners in the battle for market share
among the hyperscale public cloud providers, although Microsoft Azure, at
37.3%, does have a slight advantage. But Amazon AWS (32.1%) and Google Cloud
Platform (29.7%) also hold a prominent share of the public cloud market.
The
State of Enterprise Cloud Migrations underscores the heightened sense of urgency by businesses to
move their workloads to the cloud to realize new revenue streams through
digital transformation: 78.3% of IT leaders report an increase in demand for
moving workloads to the cloud. However, just one-third (33.6%) of respondents
have completed a workload migration, which is only slightly more than the
finding from Next Pathway's July 2021 survey, when 31% had completed the process. We are still in
the early days of the move to the cloud.
"Our
research reveals that companies that want to move to the cloud, need help-they
want more services, industry solutions and enhanced products," says Chetan
Mathur, Next Pathway CEO. "A close examination of the cloud providers' market
share reveals that there is no clear winner. In this highly competitive market,
the cloud wars are on and likely to continue for some time."
The
cloud war rages on
The lack
of a clear winner in the cloud wars presents both opportunities and challenges
for cloud service providers. Given the effort it takes to move legacy workloads
to the cloud, customers will be reluctant to switch cloud providers. Service
providers realize that moving new customers to their cloud platform and turning
on consumption is paramount for winning the cloud wars.
The
research reveals that over the past year companies continued to run
proof-of-concepts with multiple public cloud warehouse platforms, which
suggests that they aren't rushing their entry into the cloud and are assessing
which platform is the most appropriate platform for specific business use
cases.
Cloud
migration tops the list for services requested from cloud service providers
Asked
which services they want cloud providers to offer, nearly half (49%) of
respondents named migrating existing applications, which topped the list.
Companies realize the need to expedite their migration to their cloud. They
understand the revenue potential when they digitally enable their business, but
moreover, they appreciate the potential revenue loss if their competitors get
to the cloud first.
"We are
still in the early stages of the emerging cloud market, and as this market
matures and we realize that the race to the cloud rewards those that move
quickly, more is being demanded from the vendors to accelerate cloud migrations,"
said Clara Angotti, Next Pathway President. "Companies are eager to move to the
cloud fast. Cloud Providers that move workloads to their platform will reap
huge financial benefits and a long-term competitive advantage. However,
companies need help. Moving to the cloud is not easy. Companies are asking for
more services that will automate their migration and mitigate their risk to
enable transformation."
Additional
services requested include multi-cloud strategies (45.2%), a robust partner
ecosystem (41.9%), increased storage capacity (40.3%), and industry specific
solutions (39.3%).
A
well-oiled migration process continues to be a pipe dream for businesses and IT
leaders
When
asked what they would do differently if they were to start their migration all
over again, the majority of respondents would have spent more time planning
their migration and used more automation to migrate workloads faster. For
40.6%, the planning process took longer than expected, as did the actual
implementation phase.
IT
leaders also uncovered limitations in the cloud platform that they did not
expect. Not surprisingly, more than one-quarter (26.9%) feel that data
migration presents the highest risk element of a cloud migration.
Lack
of automation still a major concern
A major
concern of companies moving to the cloud is that they lack the automated
tooling necessary for a smooth migration process. They understand that speed to
market is critical to ensuring they can sustain a competitive advantage, but
close to half (47.5%) of companies acknowledge that they lack the automated
tooling that would expedite the translation and migration of code from
on-premises to the cloud.
Looking
to the future, IT leaders anticipate that more services will be provided around
the area of automation and data analytics. Cloud Providers that can enhance
their services to make the migration leap from legacy data warehouses to their
cloud platform will differentiate themselves from their competitors and turn on
consumption revenue faster.
Hybrid
cloud is still untapped
Nearly
every company (97%) acknowledged that there are benefits to a hybrid cloud
strategy. More than half (55.3%) said it allows organizations to benefit from
the automation of public clouds and the security and privacy of private clouds,
while 41.4% said the strategy delivers more flexibility to select the right
applications for the two cloud structures. However, despite the attraction to a
hybrid cloud and the considerable market opportunity, only 30% have a hybrid
cloud in production.
"While
the urgency to move to the cloud becomes greater each passing day, challenges
and fears surrounding the migration process continue to hold companies back
from beginning the journey," says Mathur. "It is a complex process. Cloud
service providers that can deliver on the promise to ease the transition from
on-prem to the cloud have an enormous opportunity to capture a hefty share of
the market. However, most businesses are continuing to perform proofs of
concept with a multitude of providers. Those cloud platforms that move
customers first and keep them on their platform will be rewarded for their
efforts and investments."