But 73% of financial companies are moving applications off the cloud and back on premises.
With security as the guiding factor, financial services companies are ahead of all other industries in deploying hybrid clouds, but they lag behind others in their use of multi-public cloud services, according to a newly-released report.
Nearly 18% of 2,650 global IT decision makers are now running hybrid clouds, according to the second annual 2019 Enterprise Cloud Index Report by cloud provider Nutanix. But less than 7% said they had deployed multi-cloud services, ranking them at the low end of the adoption spectrum along with the professional services and construction/property sectors, the report said.
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The report was focused on cloud deployments and planning trends in the financial services industry. Nutanix defines private cloud as a cloud-enabled IT infrastructure running in a corporate data center or privately hosted by a third-party service provider.
Public cloud is defined as infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) offerings from third-party cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud platform.
Hybrid cloud is a combination of private and public cloud environments with some level of interoperability between them.
Multi-cloud is an IT environment that uses multiple public cloud services with some level of interoperability between them.
A traditional data center is a centralized location housing computing, storage, and networking equipment for the purpose of running applications and for collecting, storing, and processing large amounts of data without the benefit of cloud technology.
Security driving cloud deployment decisions
More than 60% of financial services respondents said security is the main factor driving cloud deployment decisions, and they also cited data security and compliance as top considerations when deciding among infrastructure options for hosting a particular workload, the report said.
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“Financial services companies are clearly under pressure to modernize their IT infrastructure in order to remain competitive and innovate,” said Wendy M. Pfeiffer, CIO of Nutanix. “However, they need to balance that with the security, regulatory, and compliance demands in the industry.”
Balancing all three is what is prompting the financial services sector, “more than any other industry, to embrace hybrid cloud as a solution that offers both the flexibility necessary to keep up with market demands, and control needed to ensure the safety of their data,” Pfeiffer said.
In terms of the types of clouds they deploy, financial companies cited hybrid cloud as the most secure 27% of the time, followed by on-premises, non-hosted private cloud (21%) as the next most secure infrastructure, and on-premises, private cloud (also 21%), according to the report.
Respondents indicated multi-cloud infrastructure was the least secure, with only 6% choosing it as the most secure option, according to the report.
Because so many organizations struggle to migrate workloads between environments, financial services companies have the highest percentage of traditional data centers (59%) delivering key applications, the report said. Yet, given the prevalence of digital transformation, the financial services sector faces mounting pressure to modernize IT and to make services more convenient for end-users, Nutanix noted.
That could explain why nearly 18% of financial companies have deployed hybrid cloud today, while 51% plan to shift investment to hybrid cloud in just three to five years, the cloud provider said.
Cloud repatriation underway
Additionally, nearly two-thirds (73%) of financial companies surveyed said they are moving applications off the cloud and back on premises, the report said.
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“The need for flexibility, as well as waning cost benefits of public cloud over time are … likely reasons for 71% financial services companies’ plans to repatriate one or more applications away from public cloud and back on premises,” Pfeiffer said.
Globally, nearly 83% of respondent companies in the IT, tech, and telecom industries said they have moved or plan to move applications from the public cloud to on-premises infrastructure, the report said.
Another notable finding of this year’s Cloud Index Report was that “support for remote/branch office users” was cited by respondents as a motivator for cloud decisions nearly 30% of the time, a significantly higher percentage than cross-industry averages, Nutanix said. This points to the increasingly remote workplace landscape and the role of digital transformation in customer experience, the company said.
In the short term, respondents listed lack of adoption based on concerns around nascent tools for managing hybrid environments (66%), a lack of hybrid cloud skills (30%), and a lack of cloud-native development skills (23%).
The 2019 respondent base spanned multiple industries and business sizes from the Americas; Europe, the Middle East, and Africa (EMEA); and the Asia-Pacific (APJ) region, Nutanix said.