Next Pathway Research: With Businesses Eager to Generate Revenue From Cloud’s Transformational Promise, They Are Demanding More Services to Accelerate and Ease the Migration Path to the Cloud
Today, Next Pathway Inc., the Automated Cloud Migration company, unveiled The State of Enterprise Cloud Migrations, a new report that highlights that businesses are under great pressure to enable digital transformation from the cloud to generate new revenue streams. Although businesses believe a multi-cloud strategy has advantages, currently they are selecting one primary cloud platform to move their enterprise legacy workloads. For this reason, Cloud Providers are in a race to bring enterprise workloads to their cloud platform. In the highly competitive cloud market, businesses are being lured to cloud platforms with industry solutions, faster migration paths and enhanced capabilities. Cloud Providers understand the benefits of first mover advantage and are using a range of tactics to gain market share, including employing their hefty balance sheets to buy business.
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The February 2022 survey of approximately 1,200 IT professionals and decision-makers also reveals that there are no clear winners in the battle for market share among the hyperscale public cloud providers, although Microsoft Azure, at 37.3%, does have a slight advantage. But Amazon AWS (32.1%) and Google Cloud Platform (29.7%) also hold a prominent share of the public cloud market.
The State of Enterprise Cloud Migrations underscores the heightened sense of urgency by businesses to move their workloads to the cloud to realize new revenue streams through digital transformation: 78.3% of IT leaders report an increase in demand for moving workloads to the cloud. However, just one-third (33.6%) of respondents have completed a workload migration, which is only slightly more than the finding from Next Pathway’s July 2021 survey, when 31% had completed the process. We are still in the early days of the move to the cloud.
“Our research reveals that companies that want to move to the cloud, need help—they want more services, industry solutions and enhanced products,” says Chetan Mathur, Next Pathway CEO. “A close examination of the cloud providers’ market share reveals that there is no clear winner. In this highly competitive market, the cloud wars are on and likely to continue for some time.”
The lack of a clear winner in the cloud wars presents both opportunities and challenges for cloud service providers. Given the effort it takes to move legacy workloads to the cloud, customers will be reluctant to switch cloud providers. Service providers realize that moving new customers to their cloud platform and turning on consumption is paramount for winning the cloud wars.
The research reveals that over the past year companies continued to run proof-of-concepts with multiple public cloud warehouse platforms, which suggests that they aren’t rushing their entry into the cloud and are assessing which platform is the most appropriate platform for specific business use cases.
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Asked which services they want cloud providers to offer, nearly half (49%) of respondents named migrating existing applications, which topped the list. Companies realize the need to expedite their migration to their cloud. They understand the revenue potential when they digitally enable their business, but moreover, they appreciate the potential revenue loss if their competitors get to the cloud first.
“We are still in the early stages of the emerging cloud market, and as this market matures and we realize that the race to the cloud rewards those that move quickly, more is being demanded from the vendors to accelerate cloud migrations,” said Clara Angotti, Next Pathway President. “Companies are eager to move to the cloud fast. Cloud Providers that move workloads to their platform will reap huge financial benefits and a long-term competitive advantage. However, companies need help. Moving to the cloud is not easy. Companies are asking for more services that will automate their migration and mitigate their risk to enable transformation.”
Additional services requested include multi-cloud strategies (45.2%), a robust partner ecosystem (41.9%), increased storage capacity (40.3%), and industry specific solutions (39.3%).
When asked what they would do differently if they were to start their migration all over again, the majority of respondents would have spent more time planning their migration and used more automation to migrate workloads faster. For 40.6%, the planning process took longer than expected, as did the actual implementation phase.
IT leaders also uncovered limitations in the cloud platform that they did not expect. Not surprisingly, more than one-quarter (26.9%) feel that data migration presents the highest risk element of a cloud migration.
A major concern of companies moving to the cloud is that they lack the automated tooling necessary for a smooth migration process. They understand that speed to market is critical to ensuring they can sustain a competitive advantage, but close to half (47.5%) of companies acknowledge that they lack the automated tooling that would expedite the translation and migration of code from on-premises to the cloud.
Looking to the future, IT leaders anticipate that more services will be provided around the area of automation and data analytics. Cloud Providers that can enhance their services to make the migration leap from legacy data warehouses to their cloud platform will differentiate themselves from their competitors and turn on consumption revenue faster.
Nearly every company (97%) acknowledged that there are benefits to a hybrid cloud strategy. More than half (55.3%) said it allows organizations to benefit from the automation of public clouds and the security and privacy of private clouds, while 41.4% said the strategy delivers more flexibility to select the right applications for the two cloud structures. However, despite the attraction to a hybrid cloud and the considerable market opportunity, only 30% have a hybrid cloud in production.
“While the urgency to move to the cloud becomes greater each passing day, challenges and fears surrounding the migration process continue to hold companies back from beginning the journey,” says Mathur. “It is a complex process. Cloud service providers that can deliver on the promise to ease the transition from on-prem to the cloud have an enormous opportunity to capture a hefty share of the market. However, most businesses are continuing to perform proofs of concept with a multitude of providers. Those cloud platforms that move customers first and keep them on their platform will be rewarded for their efforts and investments.”