• February 2, 2016

The Great Cloud Takeover

Migration to the cloud has gone from a stream to a flood.

In 2014, workloads in the cloud surpassed workloads in traditional IT environments for the first time. Since then, there has been a flurry of unplugging and replugging into the cloud. Last August, Netflix announced it was shuttering the last of its data centers, making it one of the first large enterprises to run all of its information technology in the cloud. The Netflix shift has been in the works for more than seven years, triggered after the media streaming giant was hit with a major hardware failure in 2008.

In October, General Electric announced that 70 percent of its enterprise workloads would migrate to the cloud by 2020. GE bills the move as the biggest transformation in the company’s 130-year history. The objective? To position GE as the premier digital industrial enterprise. Moving to cloud applications, GE contends, frees up vast resources it can use to focus on differentiating itself from competitors. It’s a smart strategy for the enterprise looking to thrive on its way from traditional to new.

The Great Cloud Swell

This stream to the cloud is quickly becoming a swollen river. Indeed, traffic to the cloud will swell 33 percent annually over the next five years. By 2019, 86 percent of all workloads will be processed in the cloud. Just 14 percent will be performed in traditional data centers.

Internet traffic to the cloud is surging exponentially. Information flows between data centers are expected to grow at a much faster rate than traffic to end-users. And while the index projects overall cloud workloads are poised to grow at an annual rate of 27 percent between 2014 and 2019, public cloud growth is expected to top 44 percent annually. Private cloud (cloud services delivered to enterprises by their IT departments) workload growth will tick up at a much slower rate: 16 percent annually.

The Great Cloud Challenge

However, this flood to the cloud is not without challenges. Because cloud environments function fundamentally differently from the way enterprise IT typically runs—with different feature sets and management protocols—they introduce a layer of complexity. One solution is to integrate cloud and on-premise data center services—the hybrid cloud solution—under a single architecture supported by a single vendor.

The potential benefits are worthy of the journey. Migrating workloads to public or hybrid clouds delivers vastly more business value; value that manifests in terms of cost savings, flexibility, efficiency, and scalability. Yet, enterprises typically realize just 35 percent of this potential value, leaving 65 percent untapped.

Cloud is fast becoming a critical enterprise component. In this age of digital transformation, cloud means enterprise IT can focus on competitive differentiation, not digital plumbing. Ignore it at your peril.

Like this story? Read more about the value of cloud migration here.