09.24.20

Insights from Flexera’s State of Cloud 2020 Report

By JP La Torre

The adoption of cloud computing is only becoming more common as we go deeper into 2020. Almost all business solutions now run in the cloud. Proprietary systems are made to be cloud-native from the ground up. Even on-premise solutions are being migrated to the cloud, mainly because of the lower running cost and the scalability of today’s cloud ecosystems.

The availability of cloud services and tools supporting cloud implementation is also a big part of this transformation. There are growing trends shaping in the market, with companies storing over 80% of their data in the cloud. There are some challenges to overcome too, and the Flexera 2020 State of the Cloud report has some very interesting insights about this trend.

Growing Adoption

The Flexera report shows the acceleration in cloud adoption is not showing any sign of stopping. Businesses are investing more in cloud infrastructure, having realized the short- and long-term benefits offered by cloud computing today. With systems becoming more efficient and fully leveraging cloud-native features and characteristics, that growth in cloud investment will only accelerate further.

In 2020, over 20% of enterprises spend more than $12 million per year on public clouds. Public cloud services completely eliminate the entry barriers to cloud computing. Rather than investing in cloud clusters and hardware with a limited usage cycle, corporations can now go straight to managing their cloud expenses and benefiting from cloud services.

The recent pandemic also accelerates the adoption of cloud computing further. In many ways, COVID-19 has forced companies who are yet to execute their digital transformation plans to move to the cloud almost immediately. Remote working and the need for decentralized business information due to the pandemic makes cloud adoption even more appealing.

These trends lead to one inevitable outcome: more data and processes in the cloud. In fact, the report from Flexera states that more than 50% of enterprise data⁠—and workloads associated with business operations⁠—will be stored and run from public clouds within a year. That’s a significant jump from the mid-30% rate we are seeing today.

In-House Cloud Teams

While cloud infrastructure can be farmed out and outsourced, the teams managing enterprise cloud architectures are being formed as inseparable parts of their respective organizations. Decentralization is one of the key characteristics of cloud computing, but the same is not true with cloud management in a corporate environment.

CoE or Center of Excellence is the approach taken by many corporations to centralize cloud computing management. A team of cloud administrators and specialists handle everything from planning cloud architecture for apps and business solutions to provisioning resources and managing cloud-related expenses in the long run.

This means there are new positions to fill in many organizations whose digital transformation is still ongoing. Cloud administrators and specialists, DevOps specialists, and many other specialists in cloud computing are in high demand right now. Usage and cost of infrastructure are the main things that corporations manage as they move operations to the cloud.

Initiatives and Metrics

Despite the entire cloud computing landscape being relatively new to certain organizations, businesses and corporations are turning to the right metrics to maintain effective use of cloud computing. At the top of that list of metrics, we have cost. Tools like AWS Cost Explorer are gaining in popularity because of the simplifications they offer.

Efficiency and savings are also very important. While the cost of using cloud resources can be high if the organization has high requirements, that cost is justifiable when factors such as CAPEX and OPEX savings are also high. After all, efficiency leads to lower expenditures in general, and that leads to a big competitive advantage.

With the market being as competitive as it is today—and organizations struggling to adapt to the post-pandemic crisis market⁠—any competitive advantage is worth pursuing. Cloud computing becomes the right instrument to use. It doesn’t just allow businesses to be more competitive but also more agile and faster in adapting to market changes.

The Era of Multi-Cloud

Multi-cloud is not a new concept, but there is no doubt that 2020 is the year when multi-cloud becomes mainstream. AWS and GCP have plenty of services for enterprise users, but providers like IBM and Oracle offer expertise and specialized services in select fields. Multi-cloud simply allows applications to take advantage of these specific features and benefits better.

Setting up a multi-cloud environment is not as difficult as it used to. The adoption of multi-cloud architecture is also more widespread than many believed. According to the same report, 93% of enterprises already have a multi-cloud strategy in place. 87% of corporations successfully developed a hybrid cloud strategy that combines cloud resources with on-premise systems.

The real barrier is in data and cloud integration. While the adoption of multi-cloud is massive, many organizations still use different cloud services to run different applications. When analyzed further, only 41% of organizations whose applications run on multiple cloud platforms actually have integrated data and a seamless workflow in place.

Public and private cloud services are equally popular. The report states that, on average, a company uses 2.2 public cloud services and 2.2 private cloud services. The latter is the preferred method among companies that need to protect customer information and maintain complete control over their data warehouses.

Public Cloud Adoption

So, which are the top three public cloud platforms today? The list hasn’t changed much this past year. AWS, Azure, and Google are still the most popular cloud service providers among enterprise users. What’s interesting is how Azure was able to narrow its gap to AWS thanks to a sudden spike in virtual machines (VMs) running in its ecosystem.

Using the $1.2 million per year spending benchmark, 40% of AWS customers are in this category compared to only 36% of Azure clients. The gap is really not that big, and the series of new services and tools provided by Azure⁠—tailored to the specific needs of enterprise users⁠—can be taken as the main cause of this change.

The report was the result of a study, surveys, and interviews involving 750 technical professionals from around the world. With the Flexera report producing these insights, expect to see more cloud adoption, more robust architecture, and a growing number of services in the near future.


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References

Info.flexera.com. 2020. 2020 State Of The Cloud Survey From Flexera. [online] Available at: <https://info.flexera.com/SLO-CM-REPORT-State-of-the-Cloud-2020> [Accessed 1 September 2020].