6 reasons for adopting a multi-cloud strategy

Multi-cloud simply refers to the presence of more than one cloud, sourced from different vendors. This strategy has gained significant momentum in recent years and is supporting cloud-native apps, cloud MFT, cloud EDI, and beyond with no signs of slowing.

In the Flexera 2022 State of the Cloud Report, 89% of respondents — a mix of global cloud decision-makers and users — said they had a multi-cloud strategy in place. Of these multi-cloud adopters, 80% made this transition by way of hybrid deployments that use a combination of public and private clouds.

Take Uber and Airbnb as two well-known examples of hybrid cloud adopters. At peak travel periods — rush hour in the case of Uber and spring break in the case of Airbnb — each brand has to scale up its data capabilities to ensure a positive user experience.

A hybrid cloud environment gives both companies extra bandwidth when they need it. The same can be said for streaming platforms like Hulu and Netflix that also use hybrid cloud models to support bandwidth demands when a new anticipated series comes out.

Seeing the investments that companies are making in multi-cloud strategies, it’s safe to say this trend is more than just a fad for cutting-edge companies. A multi-cloud strategy has become a smart investment that makes sense for all types of organizations, especially those that fall under the mid-market and enterprise level.

Michael Fulton, Head of Commercial Strategy at Expedient, elaborated on this point in a recent Forbes article: “Yes, cloud computing has radically transformed the way products and services get delivered, but a one-size-fits-all approach (just a pick a cloud and move everything there) doesn’t work. The complexity of managing all these applications and workloads is only increasing.”

Let’s dive deeper into what’s prompting the increased adoption of multi-cloud strategies, and explore six leading reasons it may be the right path for you.

Multi-cloud strategies: 6 reasons to make the transition

1. Proximity & data residency

Major cloud service providers (CSPs) regularly invest in data centers across the globe. Some providers may have data centers closer to your customers and key markets, meaning data has less distance to travel to power your applications. Adopting a multi-cloud strategy gives companies flexibility to work with multiple CSPs to minimize lags, delays, and buffers and, in turn, support the optimal user experience.

Alongside efforts to reduce latency, compliance with data residency requirements can also be a driving force behind multi-cloud adoption. Different countries have different policies on the location or region where specific types of data are stored. An enterprise with employees or customers spread across the U.S. and Europe, for example, must adhere to the CLOUD Act and GDPR, respectively, which are no longer cross-compliant as of a July 2020 EU ruling.

In a multi-cloud infrastructure, businesses have an easier way to meet data residency requirements as they have access to CSPs in select regions and zones.

According to a 2021 article from CPO Magazine, over 130 countries have enacted data privacy laws specific to their region. The growth of country-specific regulations, paired with the nature of the laws themselves, has made it increasingly difficult for businesses to meet global compliance standards with a single, centralized cloud solution.

With goals or pending plans to expand into new markets, companies will be more prepared to meet these challenges and satisfy cloud sovereignty requirements.

2. Access to best-in-class solutions

Not every company’s business objectives and goals align with the features of a single cloud solution. While you may value the availability of data centers with Amazon Web Services (AWS), the complete support that Microsoft Azure provides for legacy Microsoft apps may be appealing as well.

Alternatively, businesses may adopt a hybrid cloud strategy to benefit from the scalability of a multi-tenant cloud but also the control of a single-tenant cloud over sensitive data.

With multi-cloud services, organizations can combine native features from different cloud service providers to meet their business goals. Depending on the needs of your applications and workloads, you can opt for specific cloud environments to optimize individual tasks. The best part is that you can do it in an efficient and cost-effective manner.

With the competition between CSPs becoming fiercer, vendors are continuously rolling out new strategies and features to earn more of the market share — from enhanced disaster recovery solutions to better data encryption. All the while, new cloud service providers are introduced to the market regularly.

This push toward innovation is further incentive to adopt a multi-cloud strategy, as businesses can leverage these new advantages without choosing between individual vendors.

3. Resilience against future competition

The cloud vendor a business chooses could one day become a business competitor. It’s a scene we’ve observed play out between retailers and Amazon, and the competition has prompted some retailers to migrate their cloud services. In 2018, Walmart — Amazon’s largest retailer competitor — cut ties with AWS and signed a five-year contract with Microsoft to expand their use of Azure. Additional large-scale retailers like Target have also made similar moves away from AWS.

Using a multi-cloud strategy gives organizations more room to be proactive about these decisions. When multiple cloud environments serve your business, the exit process from one cloud provider to another becomes smoother. That’s because a good portion of the cloud infrastructure remains intact, and there’s also less data to move.

While several variables factor into the speed of cloud migration, a multi-cloud strategy can help prevent additional downtime and thus significant costs. As Gartner reports, IT downtime costs an average of $5,600 per minute — and 98% of organizations say that just one hour of downtime translates into a loss of more than $100,000.

4. Prevents vendor lock-in

The old adage, “don’t put all your eggs in one basket,” rings true in the case of cloud service provider partnerships — and it’s a reason many businesses have turned to multi-cloud. In fact, in a 2019 survey from Fujitsu, 80% of hybrid IT users labeled sourcing flexibility to avoid vendor lock-in as their most important consideration.

As the example above illustrates, reliance on a single cloud vendor can put businesses in a bind if they need to migrate away from the platform in the future. This decision may be voluntary based on company goals, or it could be involuntary if a CSP shuts down a key service, can no longer meet service-level agreements, or fails to stay afloat in the marketplace.

Whatever the reasoning behind the migration, moving all mission-critical applications from one cloud to another can be a costly, very time-intensive process that adds stress to businesses.

To this end, any organization building a business continuity plan has recognized the value of adopting multiple clouds. While getting the most out of their cloud partnerships, companies have an infrastructure that makes it faster and easier to transfer data and applications when it’s time to make a move.

What’s more, the diversification of cloud solutions can give companies a bargaining advantage in contract negotiations. If you’re not satisfied with the contract terms when it comes time for vendor renewal, you have the flexibility to move your data to another established environment.

5. The impact of Covid-19

To keep employees healthy and safe, organizations across the globe turned to a work from home model amid the COVID-19 pandemic. While some companies have chosen to remain fully remote — Twitter and Shopify are two examples — others have adopted a hybrid approach where employees can work remotely or in the office.

Research shows that 74% of U.S. companies have already implemented or plan to implement a permanent hybrid work model. Amid adjustments to these new workplace dynamics, the average IT spend at companies increased by 6.7% between 2020 and 2021.

In light of this workplace shift, the adoption of multi-cloud strategies has accelerated. With a greater percentage (and sometimes all) of a workforce being remote, businesses have needed to supply employees with scalable audio/video conference streaming services to ensure they stay connected to colleagues no matter where work takes place. To put this into perspective, Microsoft reported a 775% increase in use of Teams over a one-month period in Italy.

While this is a matter of having the proper capacity to serve employee needs, it’s also critical to think about this from the standpoint of service disruptions that can cause a lack of productivity and, naturally, frustrations. (Even top CSPs like AWS, Azure, and Google Cloud are subject to service disruptions, and some have enacted temporary restrictions and limits on free offers to prioritize current customers’ needs.)

By diversifying solutions to multiple clouds, organizations have a more sustainable infrastructure to navigate these unpredictable events and mitigate risks. Deploying applications to various clouds increases availability, redundancy, and resilience in the face of changing industry dynamics and business objectives.

6. Support for mergers & acquisitions

When it comes to mergers and acquisitions, deal activity and volumes have increased in recent years — a trend that is expected to continue. According to Deloitte’s 2021 CFOs Signals survey, more than half of CFOs anticipate that M&As will drive up to half of their company’s growth over the next three years.

As a proactive measure, more businesses are putting people and processes in place to support these consolidations. A multi-cloud strategy fits into this overall picture.

In one case, a company acquiring a new organization may want to enable connectivity between existing cloud platforms. In another case, the best option to support current and future needs may mean migrating away from an existing cloud environment to a new platform altogether.

Multi-cloud adoption gives you added flexibility in how you decide to merge your data, workloads, and infrastructure when a merger or acquisition is announced.

With M&A deals becoming bigger and more complex, technology has become a larger part of the transaction conversation. Investment in a multi-cloud strategy speaks to the business’ readiness to handle the intertwined nature of IT and business initiatives and can help move the needle in the right direction to earn stakeholders’ buy-in.

Multi-cloud strategies are the way of the future

It’s safe to say that multi-cloud strategies are here to stay. As noted in a recent survey from Valtix, 95% of companies plan to strategically prioritize a multi-cloud environment in 2022 — with 96% emphasizing security as top of mind. Yet, only a little over half of these companies said they felt highly confident in having the tools and skills to execute a multi-cloud strategy.

Many organizations are navigating their way toward modernizing IT to enable a multi-cloud strategy. They’re seeking greater flexibility, accessibility, and resilience — and many companies who have made the investment are now realizing these benefits and finding ways to innovate at a rapid pace.

With the right tools and expertise to avoid some of the pitfalls of a multi-cloud strategy, you can leverage the best capabilities from multiple CSPs and build future-proof solutions that can run across any environment.