The most recent statistics from the ABS show that organisations using public cloud services in Australia rose from 19% to more than 30% in the 2015-16 financial year, and all the major research firms point to this trend continuing through to 2020 and beyond.
This should spell good news for channel partners who have invested in and bet big on hosting cloud services for their customers, particularly as they look towards new more IT-intensive digital services such as VR and AI.
Conflicting with this rapid growth, however, is a small faction of channel partners who are starting to pull back from the cloud. This isn’t happening by chance – it’s driven by a wider trend of businesses taking the same approach.
Commonwealth Bank of Australia, for example, recently announced how it had moved to a private cloud approach, despite it being an early advocate for the public cloud.
So, what’s driving this trend, and how should channel partners react to ensure they can stay relevant and in business?
Hidden costs When it was first launched, one of the most highly-anticipated benefits of the public cloud was its fulfilment of businesses’ desire to move away from capex to opex models. This forced major hardware partners to change tack and reinvent themselves to focus on services within the public cloud model.
As time has gone on, many partners and businesses have realised that the cost benefits aren’t exactly what they seem. The increasing run-rates over time add up to a recipe that just doesn’t work for all workloads, particularly those that are more predictable and can be easily run on-premises.
Throwing away the key Aside from bill shock, another common grievance with the public cloud is ‘lock-in’ rules.
When ‘data gravity’ sets in and partners and customers realise they might have too much happening in the public cloud and the rising costs that go with it, they’re often met with unexpected costs when they try to move anything back.
Only realising these costs at such a late stage can be incredibly damaging, and it’s something all partners working in the public cloud space or considering it need to be aware of.
Increased governance Another issue cloud partners face is governance, how can they keep control of where all the potentially sensitive data customers trust them with goes to avoid any issues here?
Data can move all around the world in the blink of an eye. The very nature of the public cloud means data and workloads stored in it easily become a part of this process. The channel has a responsibility to ensure that sensitive data does not end up in jurisdictions that break countries’ or customers’ governance policies, particularly as these policies become more stringent.
Making the cloud work
The public cloud will continue to grow, and with it great opportunities for channel partners. But I firmly believe we’ll see less in the way of ‘all-in’ public cloud strategies, and businesses and partners who have gone down that road continue to come back from it.
What we need is hybrid cloud – not as it is known now – but hybrid cloud that really works and creates the right balance between public cloud and modern on-premises solutions like hyperconverged infrastructure and enterprise cloud.
If we can get that right, channel partners will be able to provide the right infrastructure and services to help customers take advantage of all the benefits technology can bring.
Technology vendors are starting to play a part in making this a reality – traditional public cloud providers are working with modern on-premises providers to develop hybrid solutions that work for businesses. At Nutanix for example, we’ve announced a partnership with Google to help achieve this and also launched our Calm service, which will help partners in Australia and New Zealand easily move apps across different environments.
As opportunities in the public cloud space continue to expand, partners need to be mindful of its limitations, risks and pain points, and find a balance that enables them to make infrastructure work for customers and help them create digital services that benefit the business at hand.
By Jacob Pereira, Channel Director Asia Pacific and Japan, Nutanix