Multi-cloud is becoming a necessity for enterprises. Defining the right adoption strategy and roadmap is complex, but direction can be found. Starting with business objectives, size, industry, and geography will help companies pick the right multi-cloud model.
The cloud is a powerful tool used to drive innovation, productivity, and efficiency. But as more vendors enter the market with increasingly sophisticated offerings, the choices can be overwhelming. The three major service providers — Google, Amazon, and Microsoft — have comparable core cloud offerings, but all have different strengths.
Matching business requirements to these offerings typically results in a company forging multiple cloud relationships. According to Infosys’ Cloud Radar 2021, 93% of companies use at least two cloud service providers (CSPs) and 82% use at least three.1 This is not a bad thing. Companies with three or more CSPs achieve better cloud performance than the ones using one or two service providers, the research found. It’s the flexibility that multi-cloud enables that drives this better outcome.
For example, different vendors have different geographic or functional strengths. One might be great for your advanced data analytics requirements, while another may be better to support geographic expansion. They all are innovating in different ways as well. So, having a relationship with more than one or two can give you access to a wider range of new tools. This can also provide more resilience against instances of outages at one public cloud vendor. Finally, multi-cloud also promotes competition among cloud vendors and can help clients negotiate better prices and services.
|Businesses are flocking to multi-cloud as it enables growth, innovation, and productivity|
While multiple clouds are productive, operating workloads across CSPs involves several challenges. Companies need to effectively address requirements from several stakeholders, including business, IT, security, customers, and regulators. The key strategy is to strike the right balance between business requirements, internal and external compliance needs, cloud capabilities, and cost. For example, a leading global bank that Infosys works with uses Google Cloud Platform (GCP) for data processing, while — for a resilient mobile banking platform — it uses Amazon Web Services (AWS). Collectively, these cloud services provide the bank with the ability to support its current applications and emerging niche requirements.
Business and IT leaders face the following challenges while laying out the optimal multi-cloud adoption strategy:
Business and IT leaders should collaboratively build a framework for an optimal multi-cloud arrangement. This framework can help businesses choose the best strategy (see Figure 1), based on size, industry, geography, and business-IT objectives.
Infosys’ multi-cloud decision framework is based on three adoption models: orchestration, interoperability, and portability. The model helps enterprises cut through the complexities and derive maximum value.
These models should not be treated as maturity levels and can be concurrently applied in an enterprise across its portfolios or application clusters. Organizations can choose one or more strategies, depending on their business requirements and potential use cases.
Orchestration is the ability to place workloads on desired public or private clouds and automate the lifecycle management to minimize operation and management complexities. It enables organizations to uniformly enforce security, technical, and operational policies on workloads; ensure compliance; and provide cost transparency. Orchestration as a strategy would be sufficient when the workloads deployed in each cloud can operate independently and are economically viable.
For example, an enterprise can deploy support functions such as HR, payroll, and finance on one CSP, and manufacturing and supply chain on another. Typically, the integration requirements for such multi-cloud setups would be minimal and building orchestration capabilities would be enough.
Interoperability allows workloads to be deployed across multiple clouds, providing a seamless user experience and reducing management complexities. The interoperability system needs capabilities for standards-based process/data exchanges between applications, and a unified toolset for developers and system operators. It is a necessity when workloads across clouds are interdependent to deliver business outcomes.
For example, a retailer could have product management and sourcing deployed on one cloud, while e-commerce and order management are on another due to compatibility issues. These systems need to work seamlessly to ensure the customer’s delight, from browsing products to ordering and delivery.
Portability provides for the ability to move workloads from one cloud to another without having any impact on the expected business outcomes. Engineering for portability requires substantial upfront investments, so that enterprises can continue their innovation journey leveraging CSP capabilities. Portability is essential when enterprises need complete control of the technology stack to support needs like business growth across borders, business continuity, and regulatory compliance.
A global financial and credit card company, which was leveraging advanced technology to develop unique and compelling products, was using multi-cloud to support its global operations and scalability needs. It invested in cloud platform engineering to create capabilities to “develop once and deploy globally” its application portfolio seamlessly across multiple clouds.
Choosing the right mix of multi-cloud model requires careful forethought and discipline across multiple dimensions. The most important aspects here include the size of the business, industry, geographic expanse, and business objectives. Companies need to weigh all these dimensions simultaneously to make what is a very critical choice to ongoing business health .
Size of the company – This dimension determines the IT budget, team size, and expertise available within an organization to execute complex multi-cloud strategies. Multi-cloud is expensive in terms of both cost and time investment. A small to medium-sized company with limited resources could aim to meet its IT needs from a single CSP and maximize efficiency through orchestration. A medium-sized to large enterprise that wants to use IT for competitive differentiation may require services from more than one CSP to meet its diverse needs. Such enterprises should start thinking about interoperability across multiple clouds. Finally, a large enterprise with a sizable IT budget, organizational capabilities, and skilled workforce can afford to plan for portability across multiple clouds, if required.
Geographic expanse – The CSP’s service availability and data and security regulations vary by region. A company operating in a single country or region may find a single CSP optimal for its service requirements. With a single CSP, it can focus on orchestration to maximize operational efficiency and avoid the overheads of multi-cloud management. However, if a company has multi-region operations, and if some of the desired services are not available from its primary CSP across regions, it may have to choose a secondary CSP (or even a tertiary CSP) to meet all its needs. Some organizations with multi-geo operations may choose to put their geography-specific workloads on different clouds for better performance or to meet regulatory requirements. However, these workloads might have to work together to deliver collective business outcomes. For such companies, the need to integrate business operations across multiple clouds will demand cloud interoperability. Finally, some CSPs may be present in only one location within a country (e.g., in Australia, AWS is present only in Sydney2). If a company is already on such a CSP and strong data residency restrictions may come up in the future. Here, the company will be required to build capabilities with another CSP in a different region of that country (e.g., Azure is present in three zones in Australia3) and build portability from the primary CSP to the secondary one for disaster recovery.
Certain industries’ regulations might also push companies to adopt multi-cloud with interoperability and/or portability for business continuity and information security reasons. One such case example comes from China, where regulations restrict cloud data hosting outside the country. The country is a global supply chain hub, and businesses around the world deal with China-based companies. These businesses will have to opt for interoperability to ensure their applications run smoothly while meeting local regulatory requirements.
Industry – This dimension is important, as it drives the industry-specific IT needs and regulatory requirements. For industries like utilities and materials, IT is largely a cost center. With a focus on cost and operational efficiency, orchestration with a single CSP is the most appropriate strategy for them. For industries such as healthcare, retail, and CPG, IT has been driving higher business value by improving product offerings, optimizing supply chains, and reducing service costs. Companies from these industries can afford to maximize cloud services across multiple CSPs and then integrate their business operations through interoperability. For example, in financial services, regulations already mandate that companies have an exit strategy from their primary CSP. This drives financial services companies to implement portability. Such regulations potentially will emerge in other industries as well.
Business objectives – This dimension is likely the most important driver for adopting a multi-cloud strategy. The degree to which a company’s business objective demands autonomy will drive the move toward the more complex multi-cloud strategies. For example, if the business objective is to cut cost through IT, an organization may be able to adjust its business needs from a single CSP and then maximize efficiency through orchestration. If the business objective is to grow and optimize operations through IT, the organization may choose services from multiple CSPs and integrate its business operations through interoperability. Finally, if the business objective is to transform the business through IT, the organization will need to invest in developing portability across multi-cloud.
Even if all businesses do not need multi-cloud, it can be a potent tool for risk mitigation, value creation, and growth. Infosys Cloud Radar 2021 highlighted that 62% of respondents indicated business growth through scaling and capability enhancements as their objective behind multi-cloud. With the constantly changing geopolitical environment, regulations, and rising customer expectations, businesses need a cloud setup that meets today’s requirements and can swiftly adjust to future changes.
Multi-cloud adoption is a multi-year journey. During this course, business needs change on the demand side and CSP services offerings on the supply side. Organizations should establish an ongoing governance mechanism to ensure a result-oriented and forward-looking multi-cloud decision framework.
Enterprises are increasingly embracing multi-cloud. Although it is difficult to determine the best adoption strategy and roadmap, direction can be found. Companies can choose the best multi-cloud model by starting with their business objectives, geography, size, industry, or industry.
The cloud can be a powerful tool to increase innovation, productivity, efficiency, and overall effectiveness. The market is becoming more competitive as vendors offer increasingly complex offerings. While the three largest service providers, Google, Amazon and Microsoft, have similar core cloud offerings, they all have their own strengths.
A company can often form multiple cloud relationships by matching business needs to these offerings. According to Infosys Cloud Radar 2021 93% of companies use at most two cloud service providers (CSPs), while 82% use more than one.1 This is a good thing. Research shows that companies with more than one CSP achieve higher cloud performance than those who use just one or two. Multi-cloud flexibility is what drives this better result.
Different vendors may have different functional or geographic strengths. One vendor might be ideal for advanced data analytics, while another could be more suitable to support geographical expansion. Each one is innovating in their own ways. A relationship with more than one vendor can allow you to access a wider variety of tools. Multi-cloud can provide greater resilience to outages at a single public cloud vendor. Multi-cloud can also encourage competition among cloud vendors, and clients may be able to negotiate better prices.
|Multi-cloud is a popular choice for businesses because it allows growth, innovation and productivity.|
Multiple clouds can be productive but it is difficult to manage workloads across multiple CSPs. Effectively addressing the needs of multiple stakeholders is crucial for companies, such as customers, IT, security and regulators. It is important to strike the right balance among business requirements, internal compliance needs, cloud capabilities, cost, and external compliance. Infosys works closely with a global bank that uses Google Cloud Platform (GCP), while it uses Amazon Web Services for mobile banking. These cloud services, taken together, give the bank the ability to support both its existing applications and new niche needs.
These are the challenges IT and business leaders must face when implementing the best multi-cloud adoption strategy.
Collaboration between IT and business leaders is key to establishing a framework that will allow for the best multi-cloud arrangement. This framework will help businesses decide the best strategy (see Figure 1) based on their size, industry, location, and business-IT goals.
Infosys’ multicloud decision framework is built on three adoption models: interoperability and portability. This model allows enterprises to cut through complexity and extract maximum value.
These models are not meant to be considered maturity levels. They can be used concurrently in enterprises across their portfolios and application clusters. Depending on the business needs and possible use cases, organizations can choose from one or more strategies.
Orchestration allows you to assign workloads to desired cloud providers and automate lifecycle management. This reduces operational and management complexity. Orchestration allows organizations to enforce uniformly security, technical and operational policies on workloads, ensure compliance, and provide cost transparency. Orchestration would suffice if the workloads in each cloud are able to operate independently and can be economically viable.
An enterprise could, for example, deploy support functions like HR, payroll, finance, and IT on one CSP and manufacturing and supply chains on the other. The integration requirements for multi-cloud setups are minimal, and the building of orchestration capabilities would suffice.
Interoperability allows workloads across multiple clouds to be distributed, providing seamless user experiences and reducing management complexity. Interoperability systems require standards-based data/process exchanges between applications. They also need a common toolset for system operators and developers. This is essential when workloads from different clouds are interdependent in order to achieve business results.
A retailer might have product management and sourcing on one cloud while order management and e-commerce are on the other due to compatibility issues. To ensure customer delight, these systems must work together seamlessly from product browsing to order and delivery.
Portability allows you to move workloads between clouds without affecting the business results. Portability engineering requires significant upfront investment so that enterprises can continue to innovate using CSP capabilities. Portability is crucial when enterprises require complete control over the technology stack to support business growth across borders, business continuity and regulatory compliance.
Multi-cloud was used by a global credit and financial card company to support global operations and scaleability. Cloud platform engineering was a key investment by the company to enable it to seamlessly deploy its entire application portfolio across multiple clouds.
It takes careful planning and discipline to choose the best multi-cloud mix. These factors include the size and objectives of the business as well as industry and geographic expansion. To make a critical decision about their business’s future health, companies must weigh all of these factors simultaneously.
How to choose the best cloud strategy
The company’s size – This determines the IT budget, the team size and the expertise within the organization to implement multi-cloud strategies. Multi-cloud can be costly in both time and cost. Small to medium-sized companies with limited resources might be able to manage their IT needs using a single CSP, and optimize efficiency through orchestration. An enterprise of medium size to large might need services from multiple CSPs to fulfill its varied IT needs. These enterprises need to think about interoperability across multiple cloud platforms. A large enterprise can plan for portability across multiple cloud environments if it has a substantial IT budget and skilled workers.
Geographical expanse – CSPs’ service availability, data and security regulations differ by region. One CSP may be the best for a company that operates in one country or region. A single CSP allows it to focus on orchestration, which can maximize operational efficiency and eliminate the overheads of multicloud management. If a company operates in multiple regions and some services are not offered by its primary CSP, it might need to select a secondary or tertiary provider to fulfill all its requirements. Multi-geo organizations may decide to place their geo-specific workloads on separate clouds to improve performance or meet regulatory requirements. These workloads may need to be integrated to achieve collective business results. Cloud interoperability is essential for such businesses, as they will need to integrate business operations across multiple cloud platforms. Some CSPs might only be available in one country. AWS, for example, is only present in Sydney in Australia. Strong data residency restrictions could be required for companies that are already using such a CSP. The company will need to establish capabilities with another CSP in the same country (e.g. Azure is available in three Australian zones3) and to transfer data from one CSP to the other for disaster recovery.
Companies might be compelled by regulations in certain industries to adopt multicloud. Multi-cloud can provide business continuity and information security benefits. China is an example of such a country, which has regulations that restrict cloud data hosting beyond its borders. China is a major supply chain hub and many businesses deal with Chinese-based companies. These companies will need to choose interoperability in order to ensure that their applications work smoothly and meet local regulatory requirements.
Industry – This dimension is crucial as it determines the industry’s IT requirements and regulatory requirements. IT is an important cost center for industries such as utilities and materials. Orchestration with one CSP is the best strategy because it focuses on operational efficiency and cost. IT has helped improve business value in industries like healthcare, retail, CPG, and other services by optimizing supply chains and improving product offerings. These industries have the ability to optimize cloud services across multiple CSPs, and then integrate their business operations via interoperability. Financial services regulations require that companies have an exit strategy. Financial services companies are now required to allow portability. These regulations could also be found in other industries.
Business objectives – This is the key driver behind multi-cloud strategies. Multi-cloud strategies will be more complicated based on the degree of autonomy required by a company’s business objectives. An organization might be able, for example, to reduce costs through IT. The CSP can then adjust the company’s business requirements and optimize efficiency through orchestration. The business objective may be to increase and optimize its operations using IT. In this case, it might choose services from several CSPs and then integrate its business operations via interoperability. If the goal is to transform the company through IT, then the organization will need investment in multi-cloud portability.
Multi-cloud can be an effective tool for growth, risk mitigation and value creation even if not all businesses use it. Infosys Cloud Radiar 2021 revealed that 62% of respondents cited multi-cloud as a way to increase business growth, including scaling and capability improvements. Businesses need a cloud environment that can adapt to changing regulations and geopolitical environments.
Multi-cloud adoption can be a long-term process. This course will see business requirements change on the demand and CSP service offerings on the supply sides. To ensure a forward-looking, result-oriented multi-cloud decision-making framework, organizations should have an ongoing governance structure.