Worldwide spending on public cloud services and infrastructure is forecast to reach $266 billion in 2021, $52 billion of which will be spent in Western Europe, second only to the US. Great news indeed for those channel partners who have heavily invested in hosting cloud services for their customers, in particular, those set to harness the opportunity presented by IT-intensive digital services such as AI and VR.
While the outlook might appear rosy, there are in fact some ominous clouds on this horizon. In contrast to this investment in cloud services, a growing number of channel partners are now edging back and moving away from the cloud. Many enterprises have in the recent past opted for an 'all-in' strategy: a strategy which involves all applications being moved to a public cloud infrastructure - but the tide appears to be turning.
They're also beginning to realise that the public cloud isn't always the right fit for all applications, and what may have first appeared to be a cost-effective option, is no longer living up to that promise.
As organisations look to alternatives, it's important that channel partners are able to react and meet these changing demands.
Understand the impact of hidden costs
When the public cloud first came into being, its most highly-anticipated benefit was that it met the needs of businesses looking to move away from a CAPEX to OPEX spending model. The anticipation was great, but so was the need for major hardware partners to reinvent themselves in order to focus on services that fit within the public cloud model.
However, nothing remains the same in the IT industry for long, and organisations soon realised that for their mission-critical applications, the strategy of renting a public cloud was turning out to be a financial burden, not the money saving strategy they anticipated. It's not just a case of incurring higher charges - organisations are also faced with increasing run-rates that over time add up to a recipe that simply doesn't work for all workloads, notably predictable workloads that are easily run on-premises.
Pick the public cloud lock
Let's face it, nobody likes to receive a shockingly high bill from their cloud provider, but discovering you have no way out due to public cloud 'lock-in' rules can be just as nasty. It's essential that partners and enterprises are aware of the implications of these rules and the damaging effects they can have, sooner rather than later - forewarned is forearmed.
As data gravity sets in, partners and customers will soon realise that they have too much happening in the public cloud and fast become aware of the rising costs that go with it. Yet, the costs won't stop there. They will also likely be facing significant unexpected costs when they try to move anything back.
Meet the demands of governance
Governance remains a huge issue for cloud partners and this isn't going to change. As data moves all around the world in a heartbeat, how do cloud partners keep control of where all the potentially sensitive data that customers trust them with goes?
Responsibility goes much wider than the cloud partners alone. The channel also has a responsibility to ensure that sensitive data does not end up in jurisdictions that break countries' or customers' governance policies.
Harness the hybrid opportunity
The public cloud will continue to grow, and with it so to will the opportunities for channel partners. However, due to its many restrictions, it won't be the only way forward. Instead of a hell-bent move towards 'all-in' public cloud strategies, many businesses and partners who have gone down that road will look to change their path.
Their new journey will likely take them towards hybrid cloud: a hybrid cloud that creates the right balance between public cloud and modern on-premises solutions like hyperconverged infrastructure and enterprise cloud.
Such a move will provide options and the best of both worlds. Enterprises will be afforded the flexibility to choose if they wish to 'rent' or 'buy' cloud resources, depending on the needs of the business and of each application. This hybrid approach not only enables enterprises to secure the scalability and flexibility benefits of the public cloud for their enterprise, but does so at a lower cost than the public cloud.
While opportunities in the public cloud space will undoubtedly continue, partners should also consider its limitations, risks and pain points. Only then can they find the right balance that delivers infrastructure that works for their customers, and enables them to create the digital services that are required to remain competitive. Such knowledgeable and hungry channel partners are essential to provide the right infrastructure and services to help customers take advantage of all the benefits that technology can bring.
Jan Ursi is senior director EMEA for channel and OEM at Nutanix
