This article was written by Roger Camrass, Director of Research for CIONET, and is based on conversations during a virtual event on 14^th July 2021 on the relationship between public cloud and on-premises. The event was sponsored by Hitachi-Vantara.

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Public cloud is often seen as the modern-day answer to next generation infrastructures, and cloud native as the pathway to application modernization. While public cloud and cloud-native applications ensure choice and flexibility, they also create operational complexity. A 451 study by Hitachi-Vantara shows that 46% of all workloads will continue to run on-premises. This raises a debate about what is the best balance between public cloud and on-premises. Twenty-five UK and German CIOs gathered to share best practice relating to this crucial issue.
 

SETTING THE CONTEXT FOR THE DISCUSSION

Neil Lewis, director, EMEA at Hitachi-Vantara introduced the session by outlining two trends associated with the journey to cloud. In his experience, many early adopters choose a ‘lift and shift’ approach to migrating applications and workloads to the public cloud. Evidence now suggests that this has delivered few tangible benefits. In Neil’s view, only by modernising applications to exploit a cloud-native environment can organisations achieve measurable returns from a move to public cloud.

The second observation is the need for incumbent organisations to put data at the centre of their business strategies. This is especially urgent given growing challenges from digital natives in sectors such as financial services and e-commerce. Given the high volumes of data generated in a modern enterprise today, this requires appropriate data storage and analytic tools that could exist both in the cloud and on-premises. Organisations need an integrated data strategy to preserve a balance. In Neil’s view, IT professionals need to assess which applications are most in need of modernisation, and how might data be integrated before determining an appropriate cloud or on-premises model.
 

WHY MOVE TO PUBLIC CLOUD?

The notion that public cloud providers operate data centres at scale and therefore can offer the most economic solutions to compute power and storage was disputed by some of the delegates attending the event. Equally, the move from CAPEX to OPEX is not always advantageous, especially for regulated sectors.

The consensus during the discussion was that only by considering the broader business benefits of speed, agility and innovation could public cloud be justified. Examples here include:

• For a German publishing house, cloud enabled the firm to accommodate peak volumes in its USA education sector during the pandemic
• The same was true for the UK’s largest retailer who saw online customer inquiries increase exponentially in 2020
• When a delegate organisation was required to split out its operating divisions, AZURE provided the most flexible platform to support this structural change
• The adoption of a data-centric business model at board level requires all information to be stored in one place, as is the case for Deutsche Bank that has opted for Google Cloud.

Customers and service providers can also influence decisions on when and where to move to cloud. The rapid rise of Software as a Service such as Office 365, HR and CRM encourages a move to public cloud.