IT leaders dial back cloud-first strategies as hybrid IT becomes more of an investment priority

Cloud-first IT strategies seem to be falling out of favour with technology decision-makers and business leaders, suggests data from the TechTarget/ESG 2024 Technology Spending Intentions study.

More than 1,400 technology decision-makers and business leaders participated in the study, which aims to shine a light on the IT investment priorities of enterprises around the world over the coming year.

The data shows that just over a third of the study’s EMEA participants (36%) are taking a cloud-first approach to new application deployments, which is slightly down on a similar study carried out by TechTarget in 2023.

Back then, around half of the participants indicated that their organisation was favouring a cloud-first approach when choosing the best environment to deploy new applications and workloads.

This is in keeping with IT spending trends being seen across the wider IT industry, with public cloud firms, such as Amazon Web Services (AWS), tracking a shift in customer cloud spending, with enterprises focusing more on optimising their existing environments – rather than ramping up their migration plans.

Jon Brown, senior analyst for cloud and IT operations at ESG, said this trend is one of the reasons why organisations are adopting FinOps to help “eliminate waste” within their IT estates and to bring their cloud expenditure under control.

“Adopting FinOps is one way to achieve this,” he said. “With FinOps, individuals and teams can make informed, data-driven and cost-optimising decisions for IT resource consumption and demonstrate the business value of those expenditures.”

FinOps is a collaborative methodology that is focused on helping enterprises maximise the value of their cloud investments through the formation of cross-functional teams, made up of people from the cloud, technology and finance teams within an organisation.

As well as the concept of FinOps gaining ground within enterprises, there is anecdotal evidence mounting about enterprises taking less of a broad-brushed, cloud-first approach to IT deployments, and instead focusing on running new workloads in the environment best suited for them, which could be on-premise or in the cloud.

This is perhaps why hybrid cloud emerged as the second most significant technology investment large enterprise participants in the TechTarget/ESG poll plan to make over the next 12 months. Incidentally, the first most significant technology investment area was cloud security tooling.

When the EMEA respondents were asked elsewhere in the report about “the most significant investments” in compute infrastructure and management technologies their organisations plan to make over the next 12 months, hybrid cloud came out top with 32% of the vote.

Along similar lines, the joint second most popular choice among EMEA respondents were investments in off-premise cloud computing infrastructure, with 29% of the vote, along with multicloud software.

As recently reported by Computer Weekly, enterprise attitudes towards hybrid cloud have evolved compared with previous years, when adopting a hybrid infrastructure was seen as something of a temporary stopping-off point for companies that were seeking to migrate all of their infrastructure to the public cloud in the long term.

As part of the previously talked about cloud cost optimisation trend already playing out in enterprises, some firms are realising now that some of the more predictable, less peaky workloads they had moved to the public cloud work better on-premise from a cost and performance point of view.

This means hybrid cloud is now becoming the desired endpoint for some of their applications, workloads and data – rather than a temporary holding place.

With some enterprises looking to move applications and workloads back on-premise, the study also saw respondents asked about their plans to modernise their datacentre over the next 12 to 18 months.

The top response to that question, from 40% of EMEA respondents, was that they were planning to increase their use of IT applications and infrastructure monitoring and observability tools to get a better understanding of how their on-premise estate is behaving.

Meanwhile, 31% of respondents said they planned to deploy more datacentre infrastructure service management, orchestration and automation tools to make their infrastructure easier to manage.

According to Brown, this is indicative of the fact that enterprise infrastructure estates are becoming more complex.

“The task of IT operations is becoming simultaneously more critical and complex due to a whole list of factors: modernisation, distributed cloud computing, staffing, cost pressures, digital transformation, security, remote work and tool sprawl, among others,” he said.

And this, he added, is why IT departments are having to deploy more tools “to get more done in less time with fewer people”.

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