According to IDC director Nigel Parsons, the adoption of hybrid cloud solutions has doubled over the last 12 months, and 75% of organizations will move to a unified cloud management system in 2022.
Speaking in a panel discussion at the Equinix Digital Leaders summit, Parsons — a research director for partner ecosystems for the Asia Pacific (ex-Japan) — said the momentum for organizations to move from capital expenditure on IT to operational spending, and to embrace the hybrid cloud environment, continued to gather even stronger momentum.
“First customers purchased large scale on-premises infrastructure, and then they leased and moved from Capex to Opex,” Parsons said.
“Cloud models have matured in terms of flexibility, capacity on-demand, and this enables customers to get into modern cloud-based solutions at a better price point. Customers want to make money and save money and reduce risk, and they can do all three of those things with hybrid cloud.”
Parsons quoted IDC research showing that 46% of customers said the advantage of the Opex model was that it allowed them to adopt new technologies and upgrades at a better price point.
Hybrid potential for vendors
Global Opex spending would increase to USD 40 billion by 2024, with another USD 60 billion in associated services.
“Enterprises are looking to connect clouds together correctly,” said Parsons.
“This is a huge potential market, and customers need the hybrid cloud to make sure their digital transformation exercises are going to come to the fore.”
He said that since the COVID-19 pandemic began in 2020, IDC had been surveying customers every two weeks, and the message was that they were increasingly prepared to pay more than they had originally budgeted for digital transformation projects, which would position them more strongly for when we exit the pandemic and move into the new normal.
Customers were also looking for IT departments to deliver more than “standard IT solutions” because 55% of IT decisions “happen outside of traditional IT departments.”
Parsons outlined a world in which alliances such as that between Dell and Equinix, which delivers a broad ecosystem of as-a-Service offerings and enables collaboration with multiple partners, would become increasingly valuable to customers.
“The hybrid cloud is growing incredibly fast, and that’s why we need alliances,” said Parsons.
“There are so many new technologies and solutions, from data analytics to machine learning to IoT, and no one company can do everything these days.”
He said IDC’s recommendation to clients was to “try not to be a mile wide and an inch deep.”
“Think about being an inch wide, and a mile deep and think about the specializations you are going to get into,’ said Parsons.
“That is what customers are looking for, and they are re-thinking their infrastructure requirements and with good reason.”
Vendor alliances matter
From Equinix, Simon Lockington said the APEX alliance between Dell and Equinix offered customers “the ability to create your own on-demand environment built to order.”
“I don’t think there are too many clouds,” said Lockington, the Senior Director of Global Solution Architecture - APAC at Equinix
“The multi-cloud is going to continue to grow. For some organizations, vendor lock-in is a concern, and a lot of boards don’t want to be locked into one provider, but the development of container-based workloads is allowing a level of flexibility and portability, which is giving some comfort.
“And a large proportion of IT decision making is outside the traditional IT realm. You have to be able to offer a level of flexibility that allows customers to bring in toolsets without waiting for IT to deliver a system.”
Many organizations had moved from the Capex model to Opex initially for financial reasons but had initially found that “some of the flexibility options they envisaged had not eventuated as they thought,” particularly because of issues around regulation and data sovereignty.
Technology providers had responded with alliances such as APEX, which delivered an infrastructure that offered access to other services providers, such as telcos, hyperscalers, and content platforms.
From Dell, Kris Day said that to prepare themselves for the best results from embracing the hybrid cloud, organizations should identify barriers to adoption and then understand the different types of “evolved offers” now available and how they might fit.
“To prepare themselves, organizations start investing in application-specific domains,” said Day, the vice president for cloud & transformation specialty sales in Asia Pacific & Japan at Dell EMC.
“They should be going up the stack and finding points of differentiation and also looking at co-opetition environments and understanding which companies [they may have previously been competing with] but which in a co-operative environment can help them play to new strengths.”
Lachlan Colquhoun is the Australia and New Zealand correspondent for CDOTrends and DigitalWorkforceTrends, and the editor of NextGen Connectivity. His fascination is with how businesses are reinventing themselves through digital technology and collaborate with others to become completely new organizations. You can reach him at [email protected].
Image credit: iStockphoto/metamorworks