As more and more businesses work across the cloud hybrid strategies are becoming increasingly key to the future.
The cloud revolution is well under way and enabling monumental shift in the way businesses manage their key data. However, with most organisations using more than one device, complexity is a serious challenge. At the same time, security concerns keep some companies in the financial services industry from fully exploiting its potential.
The answer lies in adopting a hybrid strategy which makes the most of multiple platforms.
Rise of the cloud
A report from Gartner estimates that the public cloud market will grow by 18% in 2017 to a total of $246.8bn. Demand is growing and the number of cloud providers is multiplying, which can create complexities, especially for firms operating in the financial services.
Financial services firms face a challenging calculation. On one hand, the cloud’s additional computing power and storage capacity is ideal for their needs in a big data environment. As business harvest increasing quantities of time sensitive data, traditional data centres need to evolve. Public clouds offer the additional space and the ability to store and access data in a more flexible fashion. Along with greater cost efficiency and superior scalability.
On the other hand, security and regulatory compliance are major considerations and often keep financial companies from fully embracing cloud technology. From a regulatory standpoint, clouds operating in one region may not satisfy the regulatory demands of another. For companies operating in multiple jurisdictions this is a major issue.
Latency is also another major concern for financial services. In a world in which trades can take place within a second, even tiny delays in data transfer can have significant impact on performance.
The answer to all these issues lies in a hybrid model.
Spreading workloads across multiple platforms reduces latency, by ensuring data is transferred across the most appropriate platform. Companies can spread their uses across platforms to comply in multiple jurisdictions. Data which is highly sensitive can be stored in private clouds. This satisfies security concerns, while taking advantage of the greater agility and capacity of the public cloud environment.
The future, then, is in multiple and hybrid cloud technology. Several studies show that’s where business is heading. According to RightScale’s State of the Cloud Survey for 2017 85% say they have a strategy for managing multiple clouds, an increase of 3% over the previous year. 58% of respondents said they planned to implement hybrid cloud.
Surprisingly, though, the majority of organisations are yet to fully get to grips with hybrid. Research from 451 found that only 11% of UK enterprises had already deployed what it referred to as true hybrid clouds. Namely the running of a single application across multiple providers.
Part of the problem could be the complexity of making the transition to the cloud along with concerns over costs. For many organisations, these may still be perceived as being too great a barrier to hybrid cloud adoption together with the cost.
However, 451’s research also found that many of these concerns were reducing. When organisations were asked about their pain points, many of the same issues crop up time and time again such as:
- The complexity of integrating cloud with non-cloud infrastructure and workloads
- Automation of business processes
- Data migration
However, an encouraging sign for hybrid cloud adoption was that these pain points are becoming less of an issue.
Approximately 60% of all respondents said they expected costs to come down. As the technology evolves it is becoming more affordable and accessible. A booming market sees multiple players; competition drives down the price and reduces the level of the initial investment.
Security concerns are reducing. Businesses are becoming more comfortable with the concept of storing data in the cloud, and with the quality of cyber security provisions. It remains a high concern but providers have made considerable strides in the quality of their security systems. Equally, the ability to operate across public and private clouds reassures customers that they will be able to optimise their usage and keep certain information in a more secure place.
Demand is growing as businesses increasingly operate across multiple platforms. Rightscale’s State of the Cloud Survey for 2017 found that on average respondents were making use of 1.8 public clouds and 2.3 private clouds.
The drive towards the cloud depends on the type of cloud operation. The 451 Research study found that the need to save hardware costs was a major driver for infrastructure as a service applications IaaS, but were not as important for software as a service operations. Concerns about security were a major driver for on-premises operations along with concerns over regulatory compliance.
We stand at an interesting juncture.
As detailed above, hybrid cloud strategies are the way forward for many. Companies of all sizes say they plan to implement such strategies, but many of this will come in the future. Businesses can see the benefits of the hybrid cloud and are making plans to put it to work. The push points are growing while the pain points are declining. All of which points to strong and sustainable growth for the hybrid cloud over the next few years.