Cloud Infrastructure Powering Shift to Hybrid Work

Cloud computing is changing how organizations look at IT, moving IT away from a cost center to being an essential business function that enables a company to adapt and evolve. Today, many enterprises have already transitioned to an IT system that blends public and private and hybrid cloud systems.

Some started the shift to hybrid multicloud IT before the pandemic, but the pandemic sped up how businesses empower hybrid workforces. In 2020, TechTarget wrote that the shift to remote work wasn't temporary. According to 451 Research, 8 out of 10 organizations implemented universal work-from-home policies as a result of COVID-19, and 67% plan to keep these policies in place.

As the pandemic moved into it’s second year, many companies, like Nutanix, became a hybrid-first company, meaning IT needed to enable their workforce to work seamlessly in and away from the office. Cloud-powered services, including Zoom, Slack and ServiceNow have become integral to the IT mix.

“Today's world requires us to be good at hybrid everything,” said Wendy M. Pfeiffer, CIO of Nutanix. “The hybrid experience can be overwhelming, complex and friction-filled or it can be handled in a way that is world class.” 

Like many others, Pfeiffer said she’s adjusting her personal and work life for a hybrid world that has hybrid education for her children, more hybrid vehicles on the road and hybrid meetings, where she talks with people over Zoom from home or in the office. Everyone is learning to adapt.

“My mission is to figure out how to enable our company to be world class at hybrid,” she said. We are getting to a new way of working as a hybrid-first company. Instead of figuring out how to be better at returning to the office or how to be better at working remotely, we are looking at the characteristics of work that enable amazing productivity. Then we’ll find technologies and operational procedures to enable that productivity.”  

The pandemic accelerated many company’s shift to cloud services and technologies. Cloud spending for the first full quarter after COVID-19 became a global outbreak, rose 37% year over year to $29 billion in 2020. 

Enterprise spending on public cloud services continued to grow as companies everywhere rushed to enable their remote and hyrid workforce. It rose 18.4% to $304 billion in 2021 and is projected to make up 14% of total enterprise IT spend worldwide by 2024.

Source: SpringML

In June 2022, Synergy Research reported that infrastructure and platform cloud services grew 36% to $44 billion in the first quarter alone.

“In uncertain times the public cloud provided flexibility and a safe haven for enterprises that were struggling to maintain normal operations,” said John Dinsdale, Chief Analyst and Managing Director at Synergy Research Group.

But in their 2021 article The Cost of Cloud, a Trillion Dollar Paradox, a16z analysts Sarah Wang and Martin Casado did the math and warned that a rush to public cloud could be costly. They advised businesses to take a smart approach to using public and private cloud technologies.

“As industry experience with the cloud matures — and we see a more complete picture of cloud lifecycle on a company’s economics — it’s becoming evident that while cloud clearly delivers on its promise early on in a company’s journey, the pressure it puts on margins can start to outweigh the benefits, as a company scales and growth slows,” they wrote.

Cloud Infrastructure as a Principal Enabler of Remote Work

Remote work is arguably the single biggest factor to have an impact on IT infrastructure changes. An SWZD survey echoed Dinsdale’s claim and found that many businesses weathered the COVID-19 storm simply by enabling employees to work from home. Just three months into the pandemic, over 60% of employees across industries were working remotely, up four times from pre-pandemic levels. Later, in 2021, this number came down to around 30% – and that was the new normal when the dust settled.

Source: Spiceworks Ziff Davis

Advances in cloud infrastructure have made the near-instantaneous switch to remote work – and subsequent swings to hybrid work – possible.

“The ubiquitous availability of cheap cloud compute cycles coupled with remote desktop services has proved to be a huge enabler in mobilizing a workforce,” said Steve McDowell, VP and Principal Analyst at Moor Insights & Strategy and a columnist at Forbes.

Matt Kimball, another experienced VP & Principal Analyst, Datacenter at Moor, agreed. 

“It wasn't until COVID-19 that VDI was finally recognized as not just a useful tool but a critical tool for business continuity in enterprises with a global workforce,” Kimball said. “The cloud has enabled consumption-based, tailored solutions in VDI and other technologies,” said Kimball. “The HPEs, the Dells and the Nutanixes are building these readymade solutions – you just need to plug them in and turn them on.”

Desktop-as-a-Service (DaaS) – the cloud implementation of VDI – makes it possible to run centralized virtual applications and desktops in public clouds or on-prem regardless of the underlying platform, accessible with just a browser and an internet connection at the end of the user.

DaaS eliminates the need to procure, deploy, and manage hardware and software infrastructure. Organizations can simply contract their VM needs to a public or private cloud vendor, leading to optimized IT costs and a more consistent remote work experience for employees.

“It delivers the promise of the cloud without the penalty of the cloud,” Kimball observed.

Balancing the Cost Factor

While companies continue to dive headlong into the cloud in the aftermath of the pandemic, they’re running into cost overruns because of unforeseen complexities.

Source: McKinsey

In fact, public cloud services are costing these companies up to six times more than private infrastructure, according to Tim McCallum, Director, Business Value Programs and Strategy at Nutanix. That’s not all, Andreessen Horowitz estimates that the top 50 public companies currently using cloud infrastructure are collectively losing $500 billion of market value due to the cloud’s impact on their margins.

Organizations that realize this – belatedly or otherwise – are increasingly attempting to contain costs by moving workloads back to owned and co-located datacenters, building private clouds, or setting up an agile, hybrid infrastructure.

The trick lies in getting off public cloud platforms when their economic benefits start to diminish. Since enterprise software is usually tightly integrated with the cloud platform’s code, changing the infrastructure is difficult because of factors such as vendor lock-in.

This needs a complete mindset change in the boardroom. Enterprises need to turn erstwhile cost centers that supplied computing resources into innovation centers that are constantly in a state of digital transformation.

Hybrid Multicloud Provides a Workable Solution

“We’re entering an era of Cloud v2 where we’re asking, ‘What is the right architecture? How can I use the cloud in the right ways?’” said Martin Casado, General Partner at Andreessen Horowitz.

A hybrid cloud gives organizations the ability to pivot quickly in the face of changing market conditions and hybrid work environments that have become the norm amidst COVID-related restrictions and easing. No surprise then, that 86% of IT leaders now consider hybrid cloud to be the ideal operating model for their organizations.

As IT leaders take a cloud-smart vs. a cloud-first approach to hybrid multicloud, they’re looking to reduce operational complexity of migrating, extending or bursting applications and data between on-premises and public clouds. The post-COVID cloud-smart way is combining hybrid and multicloud solutions into a single, unified environment using Nutanix Clusters. IDC has predicted that by the end of this year, 9 in 10 organizations will use a hybrid multicloud operating model.

The Cloud Ahead

The one lesson COVID-19 taught the world is that the future is unpredictable. Charles Darwin is believed to have said, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

The IT world is no different. The pandemic did not just accelerate cloud migrations in companies, it also elevated IT decision-makers to the boardroom. A lot of organizations are finally starting to recognize that IT is critical to the survival, continuity and growth of their business. The next few years will see business and digital transformation running in parallel, enabled by cloud technology.

As hybrid multicloud environments mature, “industry clouds” are slated to arise as the next big thing in cloud computing. These are industry-specific applications and solutions offered by major public cloud providers in an attempt to gain higher market share in verticals. This reflects the fact that in a post-pandemic world, domain-specific cloud solutions have become even more important.

“Every company is a snowflake,” said Kimball. “The pandemic, the cloud and regulatory pressures will all force them to transform. Enterprises need to get to cloud-like operations quickly to be competitive with smaller companies that are using the cloud entirely.”

Dipti Parmar is a marketing consultant and contributing writer to Nutanix. She’s a columnist for major tech and business publications such as IDG’s CIO.com, Adobe’s CMO.com, Entrepreneur Mag, and Inc. Follow Dipti on Twitter @dipTparmar or connect with her on LinkedIn for little specks of gold-dust-insights.

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