The explosion of data over the last few years is difficult to fathom. In 2021, industries created, captured, copied and consumed 74 zettabytes of data (1 zettabyte is equal to 1 billion terabytes). In 2023, that number is estimated to rise to 130 zettabytes. In general, industrial data seems to be doubling roughly every two years.
The ability for organizations to manage and process their data quickly and easily is not only necessary, but vital for their survival. All across industries, from pharmaceutical to industrial engineering to entertainment, most modern businesses are going to need robust computing power to stay relevant.
But, as with most everything else in the technology sector, the cloud computing landscape is continuing to evolve. Companies who have relied on the “big three” – Amazon Web Services, Microsoft Azure, and Google Cloud – for their cloud services are trading in the exorbitant fees and limited control for the reduced costs and increased efficiencies that come from adopting a multi-cloud approach.
Cloud Computing in the Past
When the cloud first came into existence in the early 2000s, it was mostly used by small startups that didn’t have the resources to build and operate their own physical infrastructure. Companies began turning to public cloud computing services offered by companies like Amazon Web Services, Microsoft Azure, and Google Cloud, which offered fundamental compute, network and storage resources to consumers on-demand, over the Internet, and on a pay-as-you-go basis.
Using cloud infrastructure on a pay-per-use scheme enabled companies to save on the costs of acquiring, managing and maintaining their own IT infrastructure. It also meant companies could, to some extent, avoid the hassle of hiring or training a highly specialized workforce. As time went on, more and more companies began flocking to the cloud because it was viewed as a cheaper and more efficient way for them to store and process data.
Cloud Computing in the Present
Today, almost every sector has moved to the cloud, making cloud computing one of the fastest-growing technologies among developed and developing nations. Indeed, the global cloud computing market is projected to grow from $480 billion in 2022 to $1.7 trillion by 2029 – a compound annual growth rate of nearly 20 percent.
Particularly in the aftermath of the COVID-19 pandemic – with a shift to remote working – cloud computing has now become a key component of IT operations for enterprises. In fact, a survey found that 96 percent of U.S. data center experts reported increased demand for data center services since the start of the pandemic.
But ubiquitous cloud adoption has brought with it a whole new set of challenges, most notably exponential costs, increased complexity, and restrictive vendor lock-in – what some are referring to as “cloud sprawl.”
In fact, some companies are now spending up to twice as much on cloud services as they were before they migrated their workloads from on-premise systems. According to a recent Gartner report, cloud costs for businesses are usually two to three times higher than anticipated.
Furthermore, as enterprises scale up their cloud operations over time, the low-cost setup typically results in high operating costs – resulting in what some have described as the “cloud paradox”, where cloud is cheaper and better early on, but more costly later in a company’s evolution.
The sheer volume of workloads in the cloud is also causing expenses to skyrocket. In fact, cloud-based workloads account for 75 percent of workloads in 1 out of 5 organizations. Business owners are also investing in a range of emerging technologies, such as artificial intelligence (AI), machine learning, the internet of things (IoT), all of which require massive cloud computing power.
In many cases, ROIs are diminishing, which has triggered a major cloud backlash. Furthermore, only 3 out of 10 organizations know exactly where their cloud costs are going; and 75 percent of organizations report an increase in “cloud waste” – or the sum of their unused or underused cloud resources. Common estimates suggest that about 30 percent of cloud spend is wasted, with more than $147 billion wasted in 2022 alone – the most in any year to date.
Some companies have taken note and are adopting a “hybrid” cloud approach that connects a company’s on-premises private cloud services and third-party public cloud services into a single, flexible infrastructure for running critical applications and workloads. In essence, a public cloud is combined with a physical data center, allowing for sending and receiving of data and applications between cloud and on-premises data centers.
With this hybrid model, companies have reported experiencing greater security, scalability, compliance, and reduced costs. In fact, 82 percent of IT leaders reported adopting this model in 2022, deeming it the “the year of hybrid cloud.”
The Future of Cloud Computing
As more new businesses with smaller budgets emerge, there is a greater need for more flexible solutions for cloud computing. While 2022 was the year of the hybrid cloud, businesses today could greatly benefit from diversifying their services across a number of cloud providers – otherwise known as a “multi-cloud” approach.
Multi-cloud takes things a step further by allowing organizations to use two or more clouds from different cloud providers. With multi-cloud, workloads can be run in different cloud environments to match unique needs, ultimately offering greater flexibility.
It also helps organizations avoid vendor “lock-in” or becoming too tied to one particular ecosystem – such as AWS, Google, or Azure – which can create challenges when they change the applications they support or stop supporting particular applications altogether.
With a multi-cloud approach, organizations have the flexibility to choose cloud services from different cloud providers based on a combination of pricing, performance, security and compliance requirements, geographical location, etc. Similarly, a multi-cloud approach provides the ability to rapidly adopt “best of breed” technologies from any vendor – as needed or as they emerge – rather than limiting customers to whatever offerings or functionality a single vendor offers at a given time.
A multi-cloud strategy also offers the ability to select different cloud services or features from different providers, which is helpful since some cloud environments are better suited than others for a particular task. For instance, a certain cloud platform might provide better data analytics tools or other specialized capabilities (such as machine learning) than others.
Interestingly, some Fortune 50 organizations are already pursuing a multi-cloud approach. For instance, Walmart’s new multi-cloud structure enables it to “switch seamlessly” between Google’s and Microsoft's web-based services and its proprietary servers. According to Walmart, “the system has saved as much as 18% annually on overall cloud expenditures and mitigates the potential for outages.”
Similarly, all of the major cloud providers have invested in new products to add on-premise resources to their cloud stacks. For instance, AWS has debuted Outposts with K8s, Google is developing Anthos, and Azure is marketing ARC.
Businesses that have adopted a multi-cloud approach are already seeing benefits; 88 percent of organizations agree that using multi-cloud providers delivers strategic benefits for their organization, citing flexibility, reliability, and the ability to leverage various strengths of providers among the primary objectives. An analysis from Gartner found that moving to a consistent multi-cloud environment is roughly 34% less expensive than a move that would lock businesses into the platforms of major cloud providers.
Where companies were once limited to public cloud services, today they have more flexibility than ever in how they develop their infrastructures. Particularly in the post-COVID environment, as companies look to cut costs, adopting a multi-cloud strategy is not only cost-effective, but supports a flexible, more adaptable business model.