Enterprise
Cloud Index

In August and September 2021, researcher Vanson Bourne surveyed 1,700 IT decision-makers worldwide about where they're running their business applications today, where they plan to run them in the future, what their cloud challenges are, and how their cloud initiatives stack up against other IT priorities.

This report is supplemental to the global Fourth Annual Enterprise Cloud Index master report and focuses on cloud deployment and planning trends in the public sector, based on the responses of 491 IT professionals in that market across the globe. It compares public sector and sub-sector cloud plans, priorities, and experiences to each other, as well as to other industries and the global response base overall.

Findings in this report attributed to “public sector organizations” or “global public sector” and include respondents in worldwide federal, centralized, and local government; public education; and public healthcare organizations. U.S. federal government and global public education sub-sector findings are broken out separately, where specified, for comparison purposes.

Fourth Annual Enterprise Cloud Index (ECI) research indicates that while the adoption of multiple clouds, private or public, is underway across the globe, deployment progress varies among industries and geographies. Public sector organizations appear further along in their multicloud journeys than average, reporting higher adoption rates, even though fewer overall organizations in this segment agree that hybrid multicloud is the “ideal” IT operating model for their organizations. The greatest progress with both multicloud and public cloud adoption was reported by the global public education sub-sector of this group.

1More public sector organizations have adopted multicloud as a primary IT operating model. The global public education sub-sector reported the largest usage among all global ECI respondents, with penetration nearly twice the global average.

2The global public education sub-sector also reported the greatest public cloud usage and platform diversity.

3Fewer public sector organizations said they had moved an application to a different IT infrastructure in the previous year. Those that did most often cited getting better control of the app(s) as a motivator, while the main application mobility driver globally was to improve security.

4While security persists as a universal multicloud management challenge, those in the public sector frequently cited other factors, including integrating data across clouds, application mobility, and internal management silos, as problematic.

5When adopting a cloud-smart approach to workload optimization the global public sector indicated that public cloud was its preferred infrastructure for running typical run-the-business applications.

Multicloud adoption is on the rise around the world. It's often the dominant IT architecture in ECI respondent organizations, though many continue to report exclusive use of private clouds and traditional, non-cloud-enabled datacenters at levels not far behind. Driving multicloud acceptance has been enterprises' realization that to meet each workload's specific requirements for security, performance, cost, business continuity, and other factors, they must match each application to the infrastructure best suited to it. This “cloud-smart” optimization approach requires the availability of multiple IT environments, or multicloud, and the continual adjustment of workloads among them as variables change.

Getting to this point in established organizations requires a degree of migration from older, three-tier datacenters to cloud-based IT infrastructure. Depending on how entrenched the legacy infrastructure is for supporting critical applications that the organization must continue to maintain, the time it takes to evolve to a multicloud infrastructure will vary among organizations.

In general, the deployment of public cloud services to address new use cases and cost-containment goals parallels multicloud adoption. The reason is that, by definition, a multicloud environment embodies two or more different clouds, private and/or public. Without public clouds in the mix, organizations are left with private clouds, which are less likely to be multi-vendor in nature and don’t support certain public cloud dynamic infrastructure availability and redundancy advantages.

These are early days for multicloud adoption, so it's understandable that ECI respondents cited some sticking points in their IT journeys to get there. Most respondents mentioned securing their data across multiple clouds as a major concern. Those in the public sector mentioned this issue frequently as well, but found integrating data across cloud borders in the unified environment to be a pressing issue more often (Figure 7). They also frequently cited application mobility, managing costs across cloud borders, and siloed cloud management teams as difficulties they face.

As mentioned earlier, U.S. federal organizations had the public sector's lowest level of application mobility activity during the past year. So it's no surprise that a notably above-average percentage of them (63%) identified application mobility as a multicloud challenge, as the figure shows.

Ideal but complex. Many public sector respondents (75%) agreed that hybrid multicloud was the ideal IT operating model for their companies, though the percentage was lower than the global average (83%). A larger percentage (85%) of this group agreed that to succeed, their organizations need to simplify the management of multiple clouds; 82% of U.S. federal government respondents, 94% of those in public education, and 87% of the global cross-industry ECI response pool also agreed with this statement. Similar high levels—87% of all public sector, 97% of U.S. federal, and 86% of public education respondents—reported that they lack some of the internal IT skills necessary to meet today's business demands.

Market demand for containers and hybrid tools. The multicloud challenge data reflects, in part, the growing requirement for hybrid multicloud tools that unify, and, to a degree, automate processes across dissimilar cloud platforms for consistent management, access, and interoperability. A hybrid multicloud model will help address some of the key challenges of multicloud deployments, including security, data integration, and app mobility by providing a unified cloud environment on which security and data governance policies can be applied uniformly. Containers, for example, enable IT to move applications, with all their dependencies, among clouds quickly. While 82% of all global respondents across industries agreed that containers are important to their organizations today or will be within 12 months, the figure was lower in the overall public sector population (70%) and U.S. federal government (68%) sub-sector. However, 90% of those in global public education organizations said containers were important to their companies.

When adopting a cloud-smart approach to workload optimization, the global public sector indicated that public cloud was most often their preferred location for all eight of the typical run-the-business applications they were asked about (Figure 8). Public cloud was selected by particularly wide margins for big data, customer relationship management (CRM), virtual desktops, and collaboration applications.

Globally, the selections were less polarized: the cross-industry, full response base selected private cloud more often for databases and human capital applications, while they tied in their private/public cloud infrastructure preferences for big data and enterprise resource planning (ERP).

Private cloud was frequently the global public sector’s preference when it came to evaluating a given infrastructure’s ability to support a more general use case or achieve a certain business outcome, such as managing IT cost, complying with regulatory mandates, and ensuring fast application performance. Figure 9 shows the ten use cases and outcomes that respondents were asked about and the global public sector respondent preferences for using private cloud, public cloud, or a traditional three-tier datacenter for accomplishing their goals. As the chart shows, neither private nor public cloud is a slam-dunk decision for any of these functions; even three-tier datacenters garnered some votes for being the most applicable infrastructure for every use case, though in notably smaller numbers.

The COVID-19 pandemic continued to influence IT decisions and strategies last year, driving IT teams to focus on areas that more broadly empower the business. When asked what their organizations had done differently because of the pandemic, public sector respondents’ top answers were that they offered more flexible work options to employees (57%), strengthened business continuity strategies (48%), and focused on improving customer digital experiences (43%). These priorities, however, varied among U.S. federal, public education, and the remaining public sub-sector respondents.

For example, the greatest percentage of those reporting business continuity improvements due to COVID were in the U.S. federal sub-sector (57%). Substantially more in the public education sub-sector offered more flexible work options (77%). In addition, 63% of the public education sub-sector focused on the customer digital experience and 51% increased headcount, while only a third (33%) said they strengthened their business continuity plans.

Global public sector respondents also said that the pandemic spurred them to increase their IT spending in certain areas that emphasize bolstering their security posture (55%), implementing AI-based self-service technology (50%), and upgrading existing IT infrastructure (40%). Going forward, they identified improving security posture (46%), storage (41%), and both 5G implementation (39%) and improving multicloud management (39%) as top IT priorities for the next 12 to 18 months.

Generally speaking, U.S. federal government sub-sector respondents tended to be more conservative in their infrastructure goals and priorities than their counterparts. For example, the U.S. federal sub-sector expressed intentions to focus more on internally facing priorities—such as storage, security, and business continuity—compared to other public sub-sectors. The other groups more often mentioned plans to enhance customer experiences, improve remote work support, and adopt new capabilities, such as artificial intelligence, machine learning, automation, and cloud-native technologies. U.S. federal respondents also chose private cloud over public cloud more often than other sub-sectors for supporting typical run-the-business applications.

At the same time, however, U.S. federal organizations reported substantially higher-than-average current and planned adoption of multicloud as a primary IT operating model. The U.S. federal sub-sector is well ahead of the averages in multicloud adoption with 47% multicloud penetration, which notably outpaces both the overall global public sector current adoption rate of 39% and the ECI’s global, cross-industry average of 36%. Looking forward, U.S. federal respondents intend to grow their multicloud deployments to 76% penetration within the next three years, notably more ambitious than the full public sector goal of 67% and the global, cross-industry plan to increase to 64% multicloud penetration.

Figure 10 provides a summary of key ECI findings across the U.S. federal sub-sector.

The evolution to a multicloud IT infrastructure that spans a mix of private and public clouds is generally underway across the globe. ECI public sector organizations are ahead of the averages in their journey and also in their three-year plans to decommission three-tier datacenters in favor of cloud-based technologies that can be private or public in nature.

The primary hurdles they say they face are integrating data across dissimilar cloud environments, application mobility, security, and managing cost across environments. Sub-sector groups within the global public sector differ in their attitudes and priorities toward cloud and advanced technology adoption, with public education organizations ahead of the curve in deploying multicloud, public cloud, and new technologies like AI/ML and cloud-native capabilities.

Movement from cloud-first to cloud-smart strategies. Generally, IT infrastructure changes are being driven by enterprise realizations, after about a decade of public cloud service availability, that optimizing IT infrastructure involves matching workloads to the environment best suited for them, even as conditions and demands change. In other words, there’s a general shift away from cloud-first strategies, which involve indiscriminately moving as many IT resources as fast as possible to the public cloud, to modified cloud-smart strategies. With the newer approach, workloads and applications move to a different cloud—private or public—to meet specific business goals associated with them. The “right” cloud for each workload or application is dependent on several factors and can change over time, and may include cost, security/compliance, business continuity, application performance, and other variables.

Public cloud as supplemental IT infrastructure helps drive multicloud. A dynamic, fluid multicloud infrastructure delivers the agility to make adjustments. It enables the use of public clouds as an on-demand, “dial-up” IT resource that’s consumed and paid for only as used. Public clouds also make data and apps easily accessible to increasing numbers of remote, geographically dispersed employees.

U.S. federal and public education sub-sectors reported greater adoption of public cloud services than the overall global public sector base and cross-industry global response base. For example, while 47% of both the global cross-industry and public sector response bases reported not using any public cloud services to date, just 35% of U.S. federal and 25% of global public education organizations said the same. In addition, 62% of public education organizations reported using two or more different public cloud platforms, compared to 26% of the total global public sector, 25% of U.S. federal organizations, and 27% of global, cross-industry respondents.

Information security remains front and center. While more respondents globally across industries cited security as their top multicloud management challenge than those in the public sector, the totals were close: 49% of all organizations, 46% of all global public sector organizations, 43% of public education organizations, and 41% of U.S. federal organizations named security concerns as a management challenge inherent to the multicloud model. One likely reason is that, at this juncture, security configuration and enforcement practices in the cloud differ greatly from traditional on-premises IT security practices (and among different public cloud providers). That means finding adequate expertise may be an issue: higher-than-average numbers of public sector respondents said they lack some IT skills to meet current business demand. Nearly all (97%) of U.S. federal, 86% of public education, and 87% of all global public sector respondents cited a skills scarcity, compared to 79% of all organizations across industries.

IT security is a moving-target issue likely to remain front and center indefinitely in all vertical markets and geographies. However, the availability of hybrid multicloud tools that enable businesses to centrally build and enforce top-down, cross-cloud security and compliance policies will eventually level the playing field to enable equally effective defenses that are independent of infrastructure.

To fully execute on this vision of flexibility, enterprises are challenged to achieve the following:

Simplified and integrated manageability and security. IT teams must have unified visibility and the ability to set and enforce security policies consistently across clouds. In the absence of on-staff skill sets that run deep in multiple different public cloud platforms (a reported 600,000 IT jobs are currently unfilled in the U.S. alone), organizations will look to hybrid multicloud solutions that deliver visibility, manageability, consistent policy-setting and enforcement, and cost control across environments.

The ability to move apps among infrastructures cost-effectively and fast. With the majority of both global public sector (76%) and global ECI respondents (80%) saying that moving apps can be time-consuming and costly, it's expected that the adoption of containers and other, AI-driven hybrid multicloud tools will rise in step with multicloud deployments to enable apps to run and move nearly anywhere. By the time most public sector respondents are ready for these tools on a large scale, they'll likely have many more options available to them than are on the market today.