What is the current status of Multi-Cloud Sourcing in larger organisations?
What are the problems all organisations are confronted with?
Let us first look at the provider side. We are seeing an ever-increasing number of cloud providers appearing on the market with more and more attractive cloud services. We also see the three large oligopolists Amazon, Microsoft, and Google dominating the market and massively urging enterprises to consume more cloud services. These major players are increasingly providing attractive microservices surrounding their core offerings, and this has already begun to cause considerable vendor lock-in. It is also important to understand that there is a dynamic on the offering side, meaning that many cloud services are prone to change and evolve constantly. Elements can be added to or removed from services by their providers. This can have a huge significance for clients’ use cases, and the risk assessment for every cloud use case must therefore be updated regularly.
Conclusion: There are more and more offerings, and dependency on them is increasing.
Let us now look at the demand side – the client side. It is beyond doubt that there are more and more use cases demonstrating how the employment of an increasing number of different cloud services massively supports the digital transformation. Business departments are generating countless ideas and demands, like the shift to teleworking, the better use of tools for sales and operations planning, the addressing of new customers in new markets through electronic channels, the extended use of AI-based tools for complex decision-making, and the use of tools for managing customer experience. In each of these areas, multiple cloud services with attractive value propositions exist. In addition, there is a strong dynamic on the client side as well, for the ways in which users use cloud services is constantly changing as well – which in turn changes the use cases for these services. This once again means that the risk assessment for every cloud use case must frequently be updated.
Conclusion: Many businesses will soon no longer be using ten or twenty cloud services, but between fifty and a hundred.
Where do we stand in terms of the development and adaptation of multi-cloud according to international research? Looking at the Gartner Hype Cycle, we can immediately recognise two things. The “normal” cloud is already here and productive, but multi-cloud is currently at the peak of inflated expectations. In other words, businesses are on the verge of the trough of disillusionment, and there will be some pain in the near future. One needs to be aware of this when considering what is going to happen within a company over the coming two to four years.
Consequences for IT organisations
Once we have understood that (1) there is an increasing number of cloud service offerings, and it is possible to become dependent on them, that (2) businesses will be using more and more cloud services, which will lead to a much more extensive service portfolio, and that (3) cloud services themselves as well as their usage will continually be changing, it becomes clear that insufficient cloud management and unsuitable cloud governance can quickly lead to two difficult problem areas for enterprises: Exploding costs and/or security issues.
Businesses’ IT departments need to handle a multitude of IT service management tasks. While these are essentially the same tasks as before – like provisioning, cost management, disaster recovery, monitoring, service desk operation, and change management – they now apply to more and more different services that are constantly changing and evolving, with some aspects handled by the cloud provider and others perhaps by a cloud broker.
Many IT organisations are entirely unprepared for these challenges. They often have too few resources and too little know-how within their teams.
The use of new cloud services will increase much more quickly than most businesses currently assume. And the complexity of multi-cloud governance and management within hybrid IT environments is still being massively underestimated by all organisations around the world.
SOURCING INTERNATIONAL is not an exclusively Austrian undertaking. It is a joint venture formed by the fusion of Höllwarth Consulting and 42virtual. The two companies have existed for many years and have frequently cooperated successfully on large projects.
"The consolidation of experience in a close and professional cooperation allows SOURCING INTERNATIONAL to provide high efficiency and offer a broad spectrum of services."
Mag. Oliver Lindlbauer