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.
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.
18 percent of cloud-using mid-market firms surveyed report that they have currently deployed all three of public, private and hybrid cloud. This is not the case in the small business segment, an issue of size: respondents in the “all three” are on average smaller than those in the other segments, and for the most part, have about the same number of locations. This leads us to believe that the move from two to three delivery models is not a result of business scope, but rather, of IT finding that the best way to use cloud across a wider range of business requirements is to deploy a wider range of clouds.
When we look closely at small businesses, we see that the highest proportion of cloud using small businesses are currently using only private cloud – meaning that their cloud journey to date has consisted of using internal resources to deliver on-demand services. Less than 10 percent is using only public cloud, and a small percent is using only a hybrid approach connecting public and private clouds.
Then there are small businesses that are using more than one cloud approach. Here, we find that a tiny percent is using both public and private cloud, for discrete purposes, and not configured as part of a single delivery infrastructure – else, this group would identify as users of hybrid. 8 percent of small businesses are using private and hybrid. The really interesting overlap, though, is where small businesses are using all three of public, private and hybrid. They have an average of 51 employees and four locations, making them noticeably larger than average companies located in any of the other segments.
HPE has made some nice inroads into the SMB segment with its hybrid in a box approach and has several offerings for hybrid environments, including HPE OneSphere, HPE ProLiant for Azure Stack and Cloud-Ready Storage. Specifically, for SMBs, HPE has a set of five hybrid cloud solutions: 1/ Hybrid File and Backup, 2/ Hybrid Web Hosting, 3/ Hybrid Virtualization, 4/ Hybrid Development and Test, 5/ Hybrid Database. To further its goal of providing hybrid cloud options to its customers, HPE recently announced an alliance with Google to adopt Kubernetes in hybrid cloud environments and extend reach of its software-defined infrastructure for building private clouds to legacy ProLiant servers, HPE Nimble Storage dHCI and HPE Cloud Volumes Block.
Final Techaisle Take
By and large, data shows that Microsoft Azure is the clear leader for hybrid cloud deployments in not only small businesses but across the SMB segment. The channel partners are using Azure tools to deliver many business outcomes for SMB customers. Some of the targeted successes are increasing productivity, lowering cost of operations, reducing risks, managing compliance needs and augmenting scalability.
Techaisle believes that these findings contain an important – and fascinating – message for cloud vendors. Selection of a cloud delivery strategy is not a “religious issue” – the results do not indicate that buyers identify primarily as private, public or hybrid users. Instead, they select the best approach for the task at hand, with few qualms about changing approaches in response to changing needs. Techaisle urges cloud suppliers to carefully consider the use cases for whichever of public, private and/or hybrid they are promoting, and to stress the ways in which the approach is optimal for the requirement – our data does not support the idea that SMB and Midmarket buyers commit first to a delivery approach, and secondly to workloads that will be enabled via that approach.
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