Top 10 hybrid cloud trends in 2021

June 28, 2021 | 5 minute read
Chacko Thomas
Global Executive Partner & Oracle Cloud leader at IBM
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Hybrid cloud is here to stay.

Hybrid cloud infrastructure solutions were on the rise well before the pandemic, but COVID-19 has further increased the demand for cloud computing and accelerated organizations’ digital transformation. 2020 taught us that we need to be prepared for the unexpected. For businesses, that lesson means putting even more emphasis on flexibility and choice when it comes to IT solutions.

As cloud computing matures, it has become clear that the question isn’t public versus private. Organizations want to tailor their IT architecture to the unique needs of their business, and they don’t want to get stuck with one type of cloud solution when their requirements might change down the road. More than ever, businesses in all industries have turned to hybrid multicloud environments.

"By 2022, over 90% of enterprises worldwide will be relying on a mix of on-premises/dedicated private clouds, multiple public clouds, and legacy platforms to meet their infrastructure needs."

International Data Corporation (IDC)  

So, how is hybrid cloud taking shape in 2021? Here are 10 trends I’m seeing across the IT industry today.

Top trends in hybrid cloud

Trend 1: Hybrid cloud is now the go-to IT infrastructure model for business.

I’ll start by stating the obvious: hybrid cloud is continuing to grow and become the dominant IT model as businesses combine public cloud, private cloud and on-premises infrastructure to meet their business needs and drive growth. According to market research from Mordor Intelligence, the hybrid cloud market was valued at USD 52 billion in 2020 and is expected to reach USD 145 billion by 2026.

Moreover, leaders are expecting investments in cloud to pay off. In a 2021 IBM® Institute for Business Value survey of 3,000 CEOs, 74% identified cloud computing as a key technology that will deliver results in the next 2 to 3 years. Hybrid cloud is becoming the default IT infrastructure model for businesses today, and hybrid cloud environments will likely keep growing as organizations pick and choose what clouds best fit their workloads and needs.

Businesses that aren’t moving in this direction will be left behind. Do you have an enterprise hybrid cloud architecture that can help you scale and embrace this transformation?

Trend 2: Every business needs to develop a cloud strategy and an enterprise cloud architecture.

Organizations today need an architecture that can scale as business needs change; their future depends on it. If hybrid cloud is becoming the leading IT infrastructure model, developing a cloud architecture and strategy is the next critical step for organizations undergoing digital transformation, but a surprising number of businesses don’t have one. Research from the IBM Institute for Business Value found that by 2023, organizations expect to be using at least 10 clouds, but only 27% of businesses have a holistic multicloud management strategy. It’s becoming critically important for organizations to develop a holistic cloud strategy and architecture to stay competitive.

Trend 3: Organizations are demanding flexibility, making it imperative that the industry break down barriers to cloud adoption.

Businesses want the flexibility to put their workloads wherever makes the most sense according to their business requirements—whether in a public cloud, an on-premises data center or at the edge. Developers want to build once and deploy anywhere — as the Red Hat® OpenShift® Platform has made possible through containerization. The burden is on the IT industry to make sure that we’re eliminating barriers to cloud adoption so that organizations have all the flexibility they want. This approach requires designing the hybrid cloud for enterprises and winning the battle for architecture, as it will lay the foundation for how fast a business can digitally transform.

While taking choice and flexibility into account, it’s worth noting that certain clouds can be better for specific workloads. For example, if you’re running Oracle applications, there are benefits to using Oracle Cloud Infrastructure since it’s purpose-built for Oracle apps.

Trend 4: Businesses want a platform that enables AI and automation.

AI and automation offer incredible promise for businesses—helping them increase efficiency, profitability and business value while optimizing on cost and driving revenue growth. Businesses have options for how to consume AI—whether it’s embedded into their platform or AI for autonomous systems.

Many major cloud providers, like IBM and Amazon, provide a platform for AI—where the system brings in machine learning. Oracle Cloud, likewise, embeds adaptive intelligence for machine learning into its SaaS solution and provides the Oracle Digital Assistant, among other capabilities, within its AI and machine learning solutions. Oracle Autonomous Linux® and Oracle Autonomous Database bring automation into the OS and database layers. There are different ways to take advantage of AI and automation, and organizations want a hybrid cloud platform that supports it.

Trend 5: A growing number of businesses expect a pay-for-what-you-use consumption model.

Expectations have changed, and many organizations today view their cloud costs like a utility—think of your electric bill. They want to pay using a subscription or consumption-based model rather than paying a flat monthly fee because they prefer to pay for what they use and nothing more. However, a pay-for-what-you-use approach isn’t the right model for all situations, and, in some cases, a flat monthly fee will be more cost-effective in the long run.

There are pros and cons to each type of billing, and cloud vendors will need to accommodate their clients’ needs and preferences. I recommend working with a systems integrator that can help you determine the best cost model for your cloud workloads.

Trend 6: Microservices-based architectures and containerization are boosting agile development and driving DevOps culture.

The growing popularity of a cloud-native architectural approach, using microservices-based architectures and containerization, stems from the business need for an architecture that’s agile and built to scale. Microservices and containerization can work together to allow for faster, easier code updates and enable components to be scaled independently of one another. This is a boon to IT teams, and cloud-native development will likely continue to drive DevOps culture and continuous integration continuous delivery (CICD) pipelines.  

“Within the next two years, 56% of non-users are likely to adopt microservices, 78% of users will increase their investment in microservices, and 59% off applications will be created with microservices.”

—IBM, Microservices in the enterprise 2021: Real benefits, worth the challenges

For traditional enterprise application clients, containerization and microservices can help reduce overall total cost of ownership (TCO) and application maintenance. Again, I suggest working with a systems integrator that can advise you on your company’s specific situation.

Trend 7: Open hybrid cloud solutions are in; vendor lock-in is out.

Open-source solutions are nothing new, and the open-source movement has been invaluable in the tech industry. Today the trend toward open hybrid cloud is growing—that is, combining open source and open governance with the hybrid cloud model. In a 2020 O’Reilly Media survey, commissioned by IBM, 70% of respondents prefer a cloud provider based on open source, and 94% rated open-source software as equal to or better than proprietary software.

Organizations want to build once and deploy anywhere, which means they need hybrid cloud solutions that genuinely offer the ability to move data and workloads between clouds. Even better: add a unified management console and an integration solution to simplify the management of a hybrid environment and support connectivity between various clouds.

Trend 8: It’s time to modernize core business applications in the cloud.

In a fiercely competitive market, and under the pressure of very real budget constraints, businesses are always hunting for ways to modernize their architecture and improve efficiency. But it remains the case that only 20% of all workloads have moved to cloud. How can you extend the life of your existing investments while also benefiting from the latest technologies? A hybrid multicloud approach can support both goals.

Moving your existing core business applications to the cloud can give you more agility, flexibility and scalability; simplify application management; and integrate your application data across the enterprise. Meanwhile, cloud-native development for new applications can help you innovate quickly. In a hybrid cloud approach, you can have the best of both worlds. SaaS should be your first preference for taking advantage of the cloud, and if that’s not an option, go for IaaS.

Trend 9: A more collaborative ecosystem-wide approach to cloud security, regulatory compliance and cyber resilience is on the horizon.

Cloud can both introduce new security risks and open up new opportunities. Cybersecurity attacks have become more sophisticated, as we’ve recently seen with several threats to critical supply chains. Our security strategies need to adapt to today’s hybrid multicloud environments.  A recent report from the IBM Institute for Business Value argues that we’re entering a new era of cloud security that necessitates a trust network where greater accountability and information sharing across the ecosystem enhances cyber resilience for all parties. There’s no doubt that security concerns will remain paramount for enterprises, and mitigating security threats across hybrid cloud environments must be a priority.

Ask yourself what kind of security your cloud vendor provides. In addition, consider the benefits of a managed services provider that can help with governance, security policies and regulatory compliance.

Trend 10: Sustainability is becoming non-negotiable for companies and consumers.

Many organizations are now taking climate change seriously and prioritizing sustainability in their business strategies. The truth is, the technology sector consumes a significant part of the world’s electricity, and the expansion of cloud computing has contributed to that fact—after all, large data centers consume a lot of energy. However, cloud is arguably more energy efficient than on-premises data centers. Many leading cloud vendors have pledged to use more renewable energy, purchase carbon offsets and innovate to boost efficiency in their data centers. As sustainability becomes a bigger priority for companies and consumers, promises won’t be enough, and cloud vendors will need to truly commit to renewable energy to combat climate change.

For Oracle clients, my team offers a cloud impact assessment that can factor in sustainability.

Continuing the conversation

On June 30, Regis Louis, Vice President of Product Strategy for Oracle EMEA, and I will be discussing all these topics and more in a webinar about how businesses can innovate with open hybrid cloud services and Oracle Cloud Infrastructure. We’ll discuss security and resiliency, AI and automation, and open hybrid cloud strategy.
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Register for the event here:

Chacko Thomas

Global Executive Partner & Oracle Cloud leader at IBM

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