Techaisle Analyst Insights

The rigor in data collection, the depth in data analysis and the accuracy in forward looking insights that Techaisle brings in its small business & midmarket research has extended to enterprise. Techaisle’s US Enterprise Cloud Adoption Trends provides an in-depth and definitive look into the state of cloud adoption within large businesses.

1. Only 18% of US enterprises have mature cloud adoption and are optimizing usages; 36% have a cautious approach to cloud. Smaller size large enterprises have reached maturity stage whereas larger sized enterprises have ad hoc approach to cloud
2. In 92% of US enterprises, IT has a voice on the Board and helps drive the direction of the business rather than business deciding IT needs
3. Top IT challenge is implementing new strategic IT applications to improve organization’s competitiveness; 74% believe that investments in cloud increases their competitiveness
4. Greatest benefit of cloud is the ability to launch new products and services
5. 61% want seamless integration with on-premise systems
6. For 65% of US enterprises, security and regulatory compliance is the biggest challenge in developing strategies for cloud adoption
7. In 60% of enterprises data sovereignty and privacy are preventing acceleration of cloud
8. 75% of US enterprises have adopted Hybrid cloud but the largest penetration growth is expected in the use of public cloud
9. 74% are using Amazon AWS but Microsoft Azure is not far behind at 65%
10. 20% of US enterprises use all three types of cloud deployment – private, public and hybrid but the future looks very different

The research deliverable covers several topics including:

• Top 10 Enterprise IT challenges & business issues
• Enterprise Cloud adoption maturity – ad hoc to mature
• Greatest benefits of using Cloud
• Factors driving cloud adoption strategy
• Key attributes of a good cloud solution
• Challenges in developing strategies for cloud adoption
• Factors preventing Enterprises from accelerating cloud adoption
• Current & Planned adoption of services, type of deployment & workloads
• Current & planned cloud applications
• Enterprise cloud best practices - hybrid cloud, hybrid IT
• Enterprise cloud security best practices
• Use of public cloud within enterprises
• Benefits of Public Cloud adoption
• Top drivers of Public Cloud adoption
• Key challenges in implementing public cloud
• Workloads being transferred to Public Cloud
• Key Industry segments using Public Cloud services to derive its benefits
• Types and brands of public Cloud platform being used - Amazon AWS, Microsoft Azure, Google Cloud, IBM SoftLayer
• Comparative analysis of AWS, Azure, Google, SoftLayer
• Influencing the Cloud buyer, mapping the buyer’s journey
• Influencing the C-Suite

The Techaisle research contains a wealth of data that marketers can use to understand cloud adoption within the US enterprises and build IT buyer-centric marketing initiatives.

There is no doubt that Amazon AWS has been a cloud leader since 2006. Channel partners are an essential cog in the wheel of success. The AWS Partner Network (APN) is the umbrella under which its global community of partners builds solutions and services for their customers. Over the years, APN has evolved to include an MSP program, distribution program, marketplace channel program, and partner transformation program, amongst many others. Despite the evolution, AWS is not particularly well-known for its partner program, except if the partner is a significant consulting partner such as Accenture, Deloitte, Mphasis, and several others or a technology partner of size, stature, and brand recognition. However, the AWS Partner Network (APN) does include more than 100,000 Partners from more than 150 countries, with almost 70% headquartered outside of the US.

Over the last decade, there has been an industry-wide change in engagement models to support smaller channel partners. Except for top-tier partners, vendors have distanced themselves from direct oversight of channel marketing initiatives, relying on distributors to manage market development resources. The changes have made it more difficult for channel organizations to maintain predictable operational arcs. They have also made it more difficult for vendors to build and nurture high-performance partner networks. As a result, almost every week, we field two questions from the channel partner community. 1/ Does AWS have a partner program for the midsized to smaller partners? 2/ How does its program differ from Microsoft's (and increasingly from Google Cloud) channel partner initiatives?

The questions and reality are on parallel tracks. The overwhelming majority of AWS partners are smaller businesses. AWS has intentionally designed the entry point of its programs to be inclusive of small businesses. For example, consulting or SI partners only need four trained employees, two certified employees, and three engagements with customers. ISVs only need to complete a Foundational Technical Review.

Sandy Carter, Vice President of worldwide public sector partners and programs at Amazon Web Services (AWS), is transforming the program to be inclusive and diversified, at least for the partners focused on the worldwide public sector – government, healthcare, education, not-for-profit, space, federal financials, and energy. Mission, modernization, and migration are the three pillars of partner enablement and empowerment. Mission is not about simply migrating something over or performing an IT function; it is about delivering a business value for the organization, agency, state, or country. There are many examples, such as digitizing a hospital, leveraging supply chain technology to get food to the right place, or leveraging AWS technology to deliver vaccines. Modernization for AWS is about using artificial intelligence, machine learning, and IoT. Finally, migration is more wide-ranging than the other two, with three converging tracks – application migration, mainframe migration, and data-led migration.

Techaisle’s SMB and Midmarket Cloud adoption survey of 3200 midmarket firms and 3000 small businesses globally shows that hybrid cloud has been gaining momentum in small businesses, and is already entrenched in the mid-market firms. Hybrid accounts for 37 percent of cloud using mid-market businesses today, up 28% from 2018, and is expected to capture a lot higher proportion of new spending in the next one year. Midmarket firms are moving from public clouds to hybrid deployments with current hybrid workload at 17%, up from 12% in 2018. The current penetration is the highest in the US but planned usage is highest in Europe and Asia/Pacific.

There is no clear trend on the types of workloads on hybrid environments which shows that most deployments are very specific to a customer’s needs and application delivery partner’s expertise. Typical hybrid workloads include ERP, HR, CRM, finance, operations, IoT, analytics, AI, Machine Learning, SAP 4/HANA deployments, disaster recovery, critical event management, mass storage, cloud security and cloud database. Both Azure and AWS are being used by over 90% of US midmarket firms. Red Hat OpenStack is the preferred private cloud platform for 74% of US firms and Red Hat Cloudforms is the most used cloud management solution by 80% of US midmarket firms followed by VMware vRealize. Hypergrid, Morpheus, platform9 and Scalr are in low single digits. Ansible is being used by most channel partners for orchestration and automation.

Corresponding Techaisle survey with partners delivering cloud solutions to SMBs and midmarket customers reveals that Azure Stack is the most popular platform because of Microsoft’s proactive engagement, powerful and extensive Microsoft ecosystem as well as deep product portfolio. Google Anthos and AWS Outposts are picking up pace. Interesting trend is being seen from AWS partners who are beginning to use Google Anthos instead of AWS Outposts. These partners are not only working with AWS native solutions, but offering cloud solutions which are based around other cloud platforms like GCP, Oracle or Microsoft. Some of these partners prefer to use Anthos because they find it to be more of an open technology and AWS Outposts and can be easily implemented across other environments. It gives them a wider approach in terms of compatibility. They have to pay a fixed amount when using using Anthos which is variable with Outposts. None of the application delivery partners are using tools and technology from only a single vendor. The use of Open Source is dominant.

Another view of the data collected in the survey provides fascinating insight into the extent that midmarket cloud users are willing to align different delivery methods with internal requirements. Detailed analysis and segmentation of data reveals that there are pockets of demand (and overlap in these pockets) that exist for public, private and hybrid models in each segment.

Mid-market businesses
Looking at the mid-market segmentation, we see that larger firms are likely to employ multiple cloud delivery strategies. Overall, 51 percent rely on a single delivery approach for cloud, for example, 31 percent use only private. 29 percent of mid-market businesses use two different delivery approaches, with the most common being a combination of private and public models (but not in a hybrid setting). Firms in these overlap areas are not, on average, larger than those using a single delivery method, but they do face added complexity in that they tend to have more locations.

Cloud is clearly established within the US SMB market, in a way that is unique in the global context: nowhere else have the vast majority of SMBs leapt into the cloud. Cloud is also gaining acceptance in Asia/Pacific, Europe & even in Middle-East, regions where Cloud is being seen by SMBs as solving real-world business problems. But most suppliers are peddling their technology assets, focusing on non-viable channel relationships & showcasing wrong-sized solutions for workloads that have very short acquisition & deployment time window.