A survey of 283 IT leaders in the U.S. and Europe at organizations that generate more than $200 million in annual revenue finds the pace at which organizations are investing in private clouds is now occurring at a faster rate than investments in public cloud services.
Conducted by Hanover Research on behalf of GTT Communications, the survey finds that 93% of respondents are using multiple public clouds, with 43% using a mix of both public and private clouds. Just over a third (36%) primarily rely on a public cloud but are using private clouds to run specific classes of workloads for applications that typically require higher levels of security.
Overall, the survey finds workloads are roughly evenly distributed across public clouds (41%), private clouds (37%) and on-premises IT environments (22%).
However, the survey finds that while the percentage of companies that spent over $5 million on public cloud (75%), the number of organizations spending more than $10 million has grown to 57%, which is projected to increase to 64% in 2025. In comparison, the number of organizations spending more than $10 million on private clouds is expected to grow from 43% in 2024 to 53% in 2025 for an estimated growth rate of 24%, or almost twice the growth rate of public cloud.
Bastien Aerni, vice president of strategy and technology adoption for GTT, said that while investments in public clouds remain steady, there is clearly an increased reliance on private clouds underway, with security (56%), compliance (51%), artificial intelligence (50%) and customization and control (50%) all cited as major drivers of adoption. In fact, the survey makes it clear that IT leaders are no longer automatically defaulting to the public cloud as their default preference for deploying workloads, he added.
In general, IT organizations will deploy workload public cloud services to take advantage of scalability and reliability while private clouds are selected to ensure security and meet compliance requirements. In the age of AI, the number of workloads that have security and compliance workloads that warrant a private cloud appears to be now growing at a faster rate, noted Aerni.
As a result, hybrid IT environments are now the new normal, with more organizations making decisions based on the type of data that needs to be processed, stored and secured versus a commitment to one style of computing versus another, he added.
Interestingly enough, the survey also finds that enterprise IT organizations are relying on a mix of providers that includes Google (66%), IBM (64%), Amazon Web Services (AWS) (61%), Oracle (51%) and Microsoft (49%) for public cloud services and Oracle (55%), AWS (48%), Google (48%), Cisco (45%) and Microsoft (45%) for private clouds.
Regardless of service provider, the challenges being met for managing public and private clouds are myriad, with technical skills (43%), migrating applications and data (43%), introducing AI enhancements (41%) and compliance (41%) being the top public cloud challenges. In contrast, the top private cloud challenges are managing applications post-migration (38%), technical skills (38%), managing hybrid IT environments (38%) and managing container-based workloads (37%).
It might be a little premature to conclude that private cloud adoption will soon surpass reliance on public clouds, but the one thing that is certain is that enterprise IT teams will be managing a mix of both for the foreseeable future.
