Mastering the Cloud Cliff

When public cloud services began to catch on rapidly in 2009, many executives saw the potential for saving money on licensing, support, hardware, and management.

Others saw opportunities for innovation without the burden of on-premises infrastructure. Attracted by promises of IT power, flexibility, scalability, and simplicity, many companies considered or committed to going all-in on the cloud. With this rush to the cloud has come tremendous market growth: According to Gartner, the Infrastructure as a Service (IaaS) market grew from about $4 billion in 2011 to about $22 billion in 2016.

Many enterprise-level companies are choosing Hybrid IT solutions—when an organization provides and manages some IT resources in-house but uses cloud-based services for others. Hybrid IT has become the new normal, with on-site IaaS growing significantly in recent years. In fact, Synergy Research Group estimated that private and hybrid cloud infrastructure services spending rose 45 percent in 2015.

The challenge is finding the right blend of IT environments to meet workload needs. Consider
Dropbox: To lower business costs, the company recently completed one of the largest reverse
cloud migrations ever undertaken, moving about 600 petabytes of data from the public cloud to
its own data centers. Although Dropbox still uses Amazon Web Services to provide new services
in Europe, the company hit a “cloud cliff”— performance, cost, or control problems that occur
because because of over-reliance on the public cloud.It’s a scenario that HPE has seen play out
repeatedly for nearly a decade.

More and more companies are finding that the on-prem IT experience has dramatically improved
in recent years, with significant advances in functionality, performance, cost, and control. There’s
an increasing sense that although managed and public commodity clouds have their place in
IT infrastructures, there will always be applications that work better in a physical environment,
especially applications with data-intensive and/or latency-sensitive requirements. As a result,
Hybrid IT is expected to be a key IT strategy for years to come.

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