What are Businesses Doing on the Cloud?

What are businesses really doing with the cloud?  According to a piece in Medium, not necessarily what you think.  Some of the numbers they cite are interesting, even fascinating.  Some are misleading or perhaps just wrong, at least according to my own enterprise data.  Can the numbers support what I think is the primary goal of the piece, which is to promote Google’s Anthos?  We’ll look at the numbers, and the value of Anthos, here.

Let’s start with some statistics from the piece.  Google says, according to the article, that 73% of “organizations” use the cloud.  What I’ve found is that’s roughly true for “multi-site businesses” (my figure is 67%), among enterprises (the large multi-site businesses with at least 7,000 employees and 15 or more sites), the number is 100% for all practical purposes.  Google also says that only 10% of companies have “moved workloads” to the cloud, and that’s a bit more difficult to parse.

My data has shown consistently that only about 23% of workloads are eligible to run in the cloud.  If 10% had been moved, that’s nearly half of all that could be moved, and I think that is high, unless we think of “moved” differently, and that leads us to what’s really the main point of the article, the supremacy of hybrid cloud.

Google, again quoting the article, says that 80% of enterprises have hybrid cloud.  Again, if we use my definition of an enterprise, 100 percent of cloud users are hybrid cloud users, and since 100% of enterprises (actually, somewhere over 99% but I’m doubtful about the remainder) use the cloud, that would mean 100% are hybrid cloud users.

Finally, according to Google as cited in the article, “80% of those who have moved to the cloud have moved workloads back on-premise because it proved to be operationally expensive to run in the cloud.”  This seems to require some qualification.  It’s roughly true that 80% of all enterprises (84%, in fact, in my data) who use the cloud have moved some things off the cloud, and unexpected operations costs is the largest reason sited.  However, in none of these cases has all the work been moved, and only 12% said they moved “a significant application” representing “more than 10% of their cloud usage” back to the data center.

The author and Google seem to be setting up a case for Anthos here, and while I find some of the data troubling, the fact is that my own data confirms what’s the basic business case for Anthos.  If you are an enterprise, you are a hybrid cloud user.  Further, as I’ve noted briefly recently, the current trend is toward much greater cloud use.  While 100% of enterprises use hybrid cloud, the cloud was actually involved in only about 34% of applications as of November 2020.  Users tell me that number will increase to about 45% in 2021.  The driver, both for “past cloud” and “future cloud” hybridization, is the use of the cloud to provide an agile “portal” to information from one or more (and, more often, multiple) applications.  “Portalization” of their applications is the largest driver of cloud growth.

What enterprises are trying to do in 2021 is create a flexible way of projecting data from multiple applications to multiple stakeholders, based on role and company security and compliance policies.  This means drawing from a set of APIs that represent connection points to legacy business applications running in the data center, or perhaps from a piece running in the cloud, or both.  Containers are the go-to strategy for both cloud and data center these days, and so this model creates a hybrid cloud but with an emphasis on the agility of the cloud in presenting composed user interfaces.

Anthos is Google’s orchestrator-of-orchestrator approach to hybrid cloud.  The challenge with hybrid cloud when applied to containers is that Kubernetes cloud and premises domains are separate, and users want them to somehow come together.  Google, like other cloud providers, has offered managed Kubernetes services (GKE, in Google’s case) to make the public cloud side of the hybrid easier, and Anthos builds on GKE to create “federated” Kubernetes domains for hybrid and even multi-cloud.

Anthos creates a cloud-resident Kubernetes control plane that’s then managing Kubernetes nodes that are deployed, well, wherever they are.  This has created some initial concern among users, because they see their hybrid cloud, which to enterprises is mostly the data center with a ring of cloudiness around it for portal creation, controlled by Google.  That seems a bad idea until you get to some other enterprise statistics that the article doesn’t include.

Remember that the thing that’s always driven public cloud use by enterprises is the creation of front-end pieces for legacy data center applications that enterprises have no intention of moving.  This trend is accelerating in response to the post-COVID realization that projecting application information through portals that are customizable and multi-application offers big advantages.  The net is that there really isn’t much “cloudiness” going on inside the data center, and there’s not a lot of cross-border migration of components.

The statistics I’ve gathered show why.  Among those enterprises who moved applications back out of the cloud for cost reasons, the underlying technical common ground was that the applications were really too tied to the data center or that the applications used a lot of fancy public-cloud technology.  In both cases, the impact of the fanciness and tight linkage was to create unexpected costs.  One or both these reasons was cited by users in 73% of cases, in fact.

Why have a hybrid cloud at all, then?  You could have a public cloud that drops transactionalized data in a queue to be serviced by data center applications without any “hybrid cloud” elements in the data center?  There are two reasons, enterprises say.  First, they have an increasing commitment to containerization of their data center applications that has nothing to do with the cloud.  Containers have a significant operational advantage in that they can package an application in deployable form, including all its dependencies, and deploy it as a whole.  That not only saves effort, it reduces errors.  Second, they are finding that a highly portalized cloud may in fact create a need for a more agile interface between it and the data center.

A simple example will serve to illustrate the final point.  If you’re going to merge multiple applications into a single virtual application to supply data to the cloud (a “storefront design pattern” in software would be an example), you might want to do the merging and apply security measures within the data center, where you have better security/compliance controls.

If we have an agile cloud framing information for users, partners, customers, and even (in a few cases) regulators and accounting firms, containers and in particular managed and perhaps even “serverless” containers, are valuable assets.  Your own agile on-ramps for those cloud elements then need to be orchestrated in harmony with the cloud pieces themselves.  Thus, Anthos may be a good idea.  I think that the Anthos story is, in fact, better than the one the article presents, and that a complete and realistic picture of cloud usage makes it even better.