The growing hybrid cloud market

There is growing popularity in the use of hybrid cloud environments as organisations bring together private and public clouds for the benefit of the business.

This white paper looks at the burgeoning hybrid cloud market and outlines why companies see the solution as the ideal strategy for their cloud needs.

Organisations that want to use cloud computing have a trio of options available to them in the form of private, public, or hybrid infrastructures, with the right solution depending on the specific needs of the company. Organisations with greater privacy concerns, for example, will be more likely to choose a private cloud environment, whereas for others that are prepared to outsource their IT operations, the public cloud might be preferred.

Organisations can, of course, opt for a combination of the two in the form of a hybrid cloud solution, which will enable them to host applications in the most appropriate environment.

With a hybrid solution, the public cloud can quite easily be relied on to host test or development environments, but it can get quite complicated for applications that need to securely manage and store large amounts of customer data generated from applications like CRM (customer relationship management), ERP (enterprise resource planning) and customer financial information.

Hybrid takes off

Back in October 2013, when most of those interested in the development of cloud working were getting their heads around the differences between public and private clouds, IT industry analyst Gartner reckoned something called the “hybrid cloud model” would be used in 50 per cent of enterprises by 2017. This was seen as a big figure at the time as public and private cloud working had not been adopted by most organisations en masse.

As Gartner said at the time, the focus of cloud adoption was moving away from cost factors (it was already seen as cheaper to use most cloud services back then) to ones of business agility. And Gartner saw hybrid working as key to delivering that agility.

Last year, fellow analyst firm TechNavio said the hybrid cloud market was forecast to reach $79.12 billion (£51.4 billion) in sales by 2018, and become the biggest earning cloud segment among private, public and hybrid clouds.

Similar to Gartner, TechNavio said it expected that nearly half of large organisations will have hybrid cloud deployments by 2017, as enterprises looked to boost productivity by hosting critical applications in private clouds and applications attracting less security concerns in public clouds.

Predicted hybrid growth is echoed by market research firm Research and Markets. In figures published in April 2015, Research and Markets said the hybrid cloud market is expected to grow from $25.28 billion (£16.3 billion) in 2014 to $84.67 billion (£55 billion) by 2019, at a compound annual growth rate (CAGR) of 27.3 per cent from 2014 to 2019.

Research and Markets says: “Organisations adopt cloud technologies to leverage both cost savings and technical expertise to focus on their core business, with hybrid cloud solutions including consulting, integration, cloud management, cloud security and networking.”

It adds that the hybrid cloud deployment model offers faster deployment, flexibility, scalability, predictable costs and reliability features. “These benefits have attracted many organisations to adopt cloud based services rather than on premise ones in order to save time and cost. The market integration of hybrid cloud is gaining popularity and is used by businesses of all sizes across the world.”

Furthermore, Wikibon carried out a strategic comparison of public cloud vs hybrid cloud, concluding that “wholesale conversion of a working infrastructure to the public cloud is unlikely to be an optimal strategy” and that “for most enterprise customers, taking a hybrid cloud approach will allow them to maintain their current workflow.”

What hybrid means

Analyst IDC predicts that by 2018, about $1 of every $5 spent on packaged software, and $1 of every $4 spent on applications, will be consumed via the SaaS (software-as-a-service) cloud model. These figures are important in illustrating the growth of hybrid cloud working when considering the cloud technology stance taken by other analysts in looking at what “hybrid” actually means.

According to analyst Forrester’s Business Technographics surveys, nearly 70 per cent of enterprises are leveraging at least one public cloud service today. And “in nearly all cases” that service is connected to one or more services running in the corporate data centre, according to Forrester.

Forrester Consulting says: “Whether your company uses SaaS or deploys applications to a cloud platform, there is a high likelihood those services are connecting back to at least one resource in your data centre.

“For example, enterprises using SaaS-based sales force automation software usually connect this application to their on-premises enterprise resource planning (ERP), finance or eCommerce systems - that integration makes your environment a hybrid cloud.”

Get real

Forrester adds: “Enterprises need to acknowledge this reality and start managing their hybrid state now, rather than viewing hybrid as some mythical future state when public cloud meets private cloud.”

Steve Dietch, vice president of HP worldwide cloud for the enterprise group, says the reality of hybrid cloud working has come about as a result of business essentials. Dietch says: “Every established enterprise faces the monumental challenge of inventorying hundreds or even thousands of applications – each with its own requirements.

“One key element of this is to ensure that enterprise applications are deployed to the right platform or destination – and that service level requirements like performance, latency, cost, compliance and privacy for each application are addressed in the most effective and efficient manner.”

He says: “This is where the value of hybrid cloud IT comes – where applications are deployed in a private, managed or public cloud environment depending on the specific needs of that particular application.”

The need for hybrid clouds and their acceptance among enterprises is clear. For more information on how to take advantage of the hybrid cloud model, visit: http://www8.hp.com/us/en/cloud/helion-hybrid.html

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