RightScale was recently acquired by Flexera, a provider of technology asset management solutions that help enterprises gain insights on how to optimize spend and reduce risk. The same RightScale cloud industry research team that has been producing the State of the Cloud Report for the past eight years joined Flexera and has again conducted the annual State of the Cloud Survey and prepared the resulting analysis for the RightScale 2019 State of the Cloud report from Flexera.
In January 2019, RightScale conducted its eighth annual State of the Cloud Survey of the latest cloud computing trends, with a focus on infrastructure-as-a-service and platform-as-a-service.
Public cloud adoption grew in 2019 while private cloud use declined. Companies of all sizes are increasing their investment in public cloud, with a greater number of enterprises using Azure this year to close the gap with leader AWS. Managing cloud costs is at the top of companies’ 2019 priority list for the third year in a row, yet fewer than half are taking advantage of cloud provider discounts. New to the survey this year is data on the challenges that companies face with managing software licenses on the cloud.
The State of the Cloud Survey is the largest survey on the use of cloud infrastructure that is focused on cloud buyers and users, as opposed to cloud vendors. Their answers provide a comprehensive perspective on the state of the cloud today.
The survey asked 786 IT professionals about their adoption of cloud infrastructure and related technologies. Fifty-eight percent of the respondents represented enterprises with more than 1,000 employees. The margin of error is 3 percent.
We highlight several key findings from the survey in this blog post. For the complete survey results, download the RightScale 2019 State of the Cloud Report from Flexera.
- 84 percent of enterprises have a multi-cloud strategy.
- Enterprises with a hybrid strategy (combining public and private clouds) grows to 58 percent in 2019 from 51 percent in 2018, while the number of organizations with a strategy of multiple public clouds or multiple private clouds declines slightly.
- Public cloud adoption is 91 percent and private cloud adoption is 72 percent.
- 69 percent of respondents use at least one public and one private cloud.
- Public cloud is the top priority of 31 percent of enterprises.
- Many companies are taking a balanced approach with 28 percent prioritizing hybrid cloud and an additional 17 percent prioritizing public and private cloud equally.
- Respondents are already running applications in a combination of 3.4 public and private clouds and experimenting with 1.5 more for a total of 4.9 clouds.
- Companies plan to spend 24 percent more on public cloud in 2019 vs. 2018.
- 13 percent of of enterprises spend more than $12 million a year on public cloud, while 50 percent spend more than $1.2 million annually.
- Public cloud spend is growing 3x faster than private cloud usage ( 24 percent vs. 8 percent).
- 66 percent of enterprises already have a central cloud team or cloud center of excellence with another 21 percent planning one.
- For enterprises, the top responsibilities of central IT are managing and optimizing cloud costs (68 percent), deciding or advising on which applications to run in which clouds (62 percent), and setting policies for cloud use (59 percent).
- Cloud cost management and cloud governance are top challenges regardless of cloud maturity.
- Among enterprises, optimizing cloud costs (84 percent in 2019 vs. 80 percent in 2018) and cloud governance (84 percent in 2019 vs. 77 percent in 2018) are growing challenges.
- Managing software licenses that are running in public cloud environments is also becoming a top-of-mind issue. Key challenges are understanding the cost implications of licensed software running in the cloud (52 percent), ensuring that they are following the rules (42 percent), and the complexity of license rules in public cloud (41 percent).
- Optimizing existing cloud use for cost savings is the top initiative in 2019 for the third year in a row, increasing to 64 percent from 58 percent in 2018.
- The challenge of managing cloud spend grows as cloud use increases. While 64 percent of all respondents cite optimizing cloud spend as the top initiative, that number is even higher among among intermediate and advanced cloud users at 70 percent and 76 percent, respectively.
- Other top initiatives include moving more workloads to cloud (58 percent), expanding the use of containers and adopting a cloud-first strategy (tied at 39 percent), and implementing automated policies for governance (35 percent).
- Cloud users underestimate the amount of wasted cloud spend. Respondents estimate 27 percent waste in 2019, while Flexera has measured actual waste at 35 percent.
- Despite an increased focus on cloud cost management, only a minority of companies have implemented automated policies to address this issue, such as shutting down unused workloads or rightsizing instances.
- Cloud users are not fully leveraging the various cloud provider discounting options. Among AWS users only 47 percent use AWS Reserved Instances while Azure users only leverage Reserved Instances 23 percent of the time.
- The use of Docker containers continues to grow with adoption increasing to 57 percent from 49 percent in 2018.
- Kubernetes, a container orchestration tool that leverages Docker, achieved faster growth, increasing from 27 percent to 48 percent adoption.
- The AWS container service (ECS/EKS) has 44 percent adoption in 2019 (flat from 2018), while Azure Container Service adoption reaches 28 percent (up from 20 percent in 2018) and Google Container Engine grows slightly to reach adoption of 15 percent.
- Among all respondents, Ansible has 41 percent adoption, followed by Chef and Puppet at 37 percent adoption.
- Ansible has an even higher adoption rate among enterprises (53 percent), as do Chef and Puppet, tied with 50 percent adoption each.
- Terraform shows the strongest growth since last year, up by 55 percent from 20 to 31 percent adoption.
- Overall Azure adoption grew from 45 to 52 percent to narrow the gap with AWS. As a result, Azure adoption has now reached 85 percent of AWS adoption, up from 70 percent last year.
- Azure continues to catch up with AWS overall especially among enterprises, where Azure adoption increases slightly from 58 percent to 60 percent while AWS adoption in this group is relatively flat at 67 percent. This puts Azure with 89 percent of the AWS adoption level based on the overall number of respondents using each cloud.
- Google maintains its third-place position, increasing slightly from 18 to 19 percent adoption.
- Among other public cloud providers that were included in the survey last year, all saw increased adoption this year especially among enterprises with VMware Cloud on AWS growing from 8 to 12 percent (50 percent growth rate), Oracle from 10 to 16 percent (60 percent growth rate), IBM Cloud from 15 to 18 percent (20 percent growth rate), and Alibaba from 2 to 4 percent (100 percent growth rate).
- Serverless is the top-growing extended cloud service for the second year in a row with a 50 percent growth over 2018 (24 to 36 percent adoption).
- Stream processing is tied for fastest growing, increasing from 20 to 30 percent adoption.
- Machine learning, container-as-a-service, and IoT are the next fastest growing.
- In 2019, adoption of private cloud is increasing slowly across most providers.
- Overall, VMware vSphere continues to lead with 50 percent adoption, flat from last year.
- OpenStack (28 percent), VMware vCloud Director (27 percent), Microsoft System Center (25 percent), and bare-metal cloud (24 percent) all show small increases compared to 2018.
- Azure Stack is in the sixth slot, but shows the highest growth (22 percent in 2019 vs. 17 percent in 2018).
- AWS Outpost was announced in late 2018 and showed strong adoption out of the gate (12 percent) and strong interest for future use (29 percent).
- Among all respondents, 13 percent of respondents have more than 1,000+ VMs in vSphere as compared to 11 percent in AWS and 6 percent in Azure.
- AWS leads in respondents with more than 100 VMs, (33 percent for AWS vs. 27 percent for VMware and 25 percent for Azure).
- Year over year, Azure showed the largest increase in percentage of users with more than 100 VMs from 17 percent in 2018 to 25 percent in 2019.
Cloud Computing Trends: Key Findings for 2019
In the year since the last State of the Cloud Survey, the percentage of enterprises that have a multi-cloud strategy grew to 84 percent vs. 81 percent in 2018. Those planning a hybrid cloud strategy grew to 58 percent from 51 percent in 2018. However, there was a slight decrease in the number of enterprises with a strategy of multiple public clouds or multiple private clouds.
The number of respondents now adopting public cloud is 91 percent, while the number of respondents now adopting private cloud is 72 percent,. As a result, the overall portion of respondents using at least one public or private cloud is now 94 percent.
Among enterprises, the central IT team is typically tasked with assembling a hybrid portfolio of clouds. This year, while 31 percent of enterprises see public cloud as their top[f] priority, a combined 45 percent of enterprises see hybrid cloud or a balanced approach between public and private as the biggest focus.
Organizations Leverage Almost 5 Clouds on Average
On average, survey respondents are using 4.9 clouds across both public and private. Respondents are already running applications in 3.4 clouds and experimenting with 1.5 more.
As use of public cloud has grown, so has the amount of spend. Public cloud spend is quickly becoming a significant new line item in IT budgets, especially among larger companies. Among all respondents, 23 percent spend at least $2.4 million annually ($200,000 per month) on public cloud while 33 percent are spending at least $1.2 million per year ($100,000 per month).
Among enterprises the spend is even higher, with 38 percent exceeding $2.4 million per year and half (50 percent) above $1.2 million per year.
Companies are not only using a lot of public cloud, but also planning to grow public cloud spend more rapidly than private cloud use. On average, respondents plan to grow public cloud spend by 24 percent in 2019, while growing private cloud use by 8 percent.
Enterprise Central IT Focuses on Managing and Optimizing Cloud Costs
This year we saw the top responsibility of central cloud teams shift to managing cloud costs (68 percent in 2019 vs. 64 percent in 2018). Central IT teams also are focused on governance, including advising on applications appropriate for cloud (62 percent), setting policies (59 percent), and using automated cloud policies (57 percent).
Managing Cloud Spend and Cloud Governance Are the Top Challenges for Enterprises
In 2019, the top 5 challenges are all very close in how often they are cited by respondents. Overall, the complexity of larger enterprises translates into a higher level of challenges across the board, with cloud spend and cloud governance tied for the top challenge at 84 percent.
Organizations are also becoming aware of the challenges of managing software licenses that are running in public cloud environments. The top challenges are understanding the cost implications of licensed software running in the cloud (52 percent), ensuring that they are following the rules (42 percent), and the complexity of license rules in public cloud (41 percent).
The #1 Priority in 2019 Is Cloud Cost Optimization
As cloud use and cloud spend grow, 64 percent of organizations will be focused on optimizing their existing use of cloud in order to save money in 2019 as compared to 58 percent in 2018. The second-place initiative for 2019 is moving more workloads to cloud (58 percent), up from 51 percent in 2018.
Even though managing cloud costs is a top challenge and a top initiative, cloud users continue to underestimate the amount of wasted cloud spend. Respondents estimated 27 percent waste, while Flexera has measured actual waste at 35 percent.
Despite an increased focus on cloud cost management, only a minority of companies have begun to implement automated policies to optimize cloud costs, such as shutting down unused workloads or rightsizing instances. This represents an opportunity for increased efficiency and increased savings, since manual policies are difficult to monitor and enforce.
In addition, cloud users are not taking advantage of all the available discounts from cloud providers. Fewer than half of AWS users (47 percent) leverage Reserved Instances, and only 23 percent of Azure users do so.
Container Use Is Up, and Kubernetes Use Is Skyrocketing
With the steep rise in the use of containers, Docker continues to show strong growth. Overall Docker adoption increased to 57 percent from 49 percent last year. Kubernetes, a container orchestration tool that leverages Docker, saw faster growth, growing from 27 percent to 48 percent adoption.
Many users also choose container-as-a-service offerings from the public cloud providers. The AWS container service (ECS/EKS) had 44 percent adoption in 2019 (flat from 2018). Azure Container Service adoption reached 28 percent (up from 20 percent in 2018), and Google Container Engine grew slightly to reach adoption of 15 percent.
As part of adopting DevOps processes, companies often choose to implement configuration management tools that allow them to standardize and automate deployment and configuration of servers and applications. Among all respondents, Ansible now leads with 41 percent adoption (up from 36 percent in 2018). Puppet and Chef are tied with 37 percent adoption each. While in fourth place, Terraform showed the strongest growth, expanding from 20 percent in 2018 to 31 percent in 2019.
Azure Continues to Grow Quickly and Reduce the AWS Lead, Especially Among Enterprises
We asked respondents to tell us which clouds they were using and whether they were running applications in cloud, experimenting with cloud, planning to use cloud, or had no plans to use cloud. Most respondents are using more than one cloud so totals will add up to more than 100 percent.
It is important to note that adoption (the percentage of respondents that use a particular cloud) is only one of the factors that influences revenue growth for the cloud provider. Other factors include the number of VMs running as well as other cloud services being used.
In 2019, AWS continues to lead in public cloud adoption, but adoption of other public clouds is growing more quickly. Overall Azure adoption grew from 45 to 52 percent to narrow the gap with AWS. As a result, Azure adoption has now reached 85 percent of AWS adoption, up from 70 percent last year.
Google maintained its third-place position, increasing slightly from 18 to 19 percent adoption. VMware Cloud on AWS moved up to fourth position this year, increasing to 12 percent from 8 percent in 2018, a growth rate of 50 percent.
Azure especially is now nipping at the heels of AWS, especially in larger companies.
A significant number of public cloud users are now leveraging services beyond just the basic compute, storage, and network services. Among the most popular extended services, relational DBaaS and push notifications continue to hold the top two positions in 2019, while data warehouse moved up significantly to the third position.
Year over year, serverless was the top-growing extended cloud service for the second year in a row with a 50 percent increase over 2018 (24 to 36 percent adoption). Stream processing was tied for fastest growing with an increase from 20 to 30 percent adoption. Machine learning, container-as-a-service, and IoT were the next fastest growing.
Private Cloud Adoption Is Increasing Slowly
The 2019 survey shows that adoption of private cloud increased slowly across most providers except for VMware vSphere.
Overall, VMware vSphere continues to lead with 50 percent adoption, flat from last year. This includes respondents who view their vSphere environment as a private cloud — whether or not it meets the accepted definition of cloud computing.
OpenStack (28 percent), VMware vCloud Director (27 percent), Microsoft System Center (25 percent), and bare-metal cloud (24 percent) all showed small increases over 2018. Azure Stack was in the sixth slot, but showed the highest growth (22 percent in 2019 versus 17 percent in 2018). AWS Outpost was announced in late 2018 and showed strong adoption out of the gate (12 percent) and strong interest for future use (29 percent).
Workloads in Azure Are Growing But Lag AWS
The adoption numbers above indicate the number of respondents that are running any workloads in a particular cloud. However, it is also important to look at the number of workloads or VMs that are running in each cloud. The following charts show the number of VMs being run across the top public and private clouds.
Year over year, the number of workloads also grew for most cloud providers. Azure showed the largest increase in the percentage of users with more than 100 VMs from 17 percent in 2018 to 25 percent in 2019. AWS grew the percentage of users with more than 100 VMs from 31 percent in 2018 to 33 percent in 2019. OpenStack, Google, and IBM all saw small increases in the number of respondents with more than 100 workloads.
Summary: As Public Cloud Grows, Organizations Focus on Governing Costs
The 2019 State of the Cloud Survey shows that multi-cloud remains the preferred strategy. Almost every organization is using cloud at some level, with both public and private cloud adoption growing. On average, companies are using or experimenting with nearly five public and private clouds with a majority of workloads now running in cloud.
However, public cloud is increasingly becoming the top focus among enterprises and, as a result, public cloud use is growing more quickly — with spend growing at three times the rate of private cloud usage, an increasing number of cloud workloads, and an increase in the number of public cloud PaaS services used.
Cloud governance and costs were top challenges for all cloud users of all maturity levels. As a result, optimizing existing cloud use for cost savings continues to be the top initiative in 2019 for the third year in a row as even more organizations are turning their efforts to cost optimization. There is still much room for improvement as 35 percent of cloud bills are wasted due to inefficiencies, and few organizations have yet implemented automated policies to help address these issues.
Enterprise central IT teams are taking a stronger role in cloud adoption, creating central cloud teams or a Cloud Center of Excellence. The role of these central teams is focused on cost management and governance as well as advising business units on workloads that should move to cloud. Cloud teams and infrastructure and operations groups are still shouldering the lion’s share of the work for managing cloud costs, but finance teams are taking a role in chargeback of cloud costs and business units are often owning cloud budgets.
The use of DevOps continues to increase, driving further adoption of container and configuration tools. Docker grew again this year, and Kubernetes use skyrocketed. Many users are also adopting container-as-a-service offerings from AWS, Azure, and Google.
AWS still leads in public cloud adoption but Azure continues to grow more quickly and gains ground, especially with enterprise customers. Google maintains the third position, and VMware Cloud on AWS moved into fourth position ahead of IBM. Adoption of Oracle Cloud is still small, but is growing well.
Cloud provider revenue is driven not just by adoption (percentage of companies using the cloud), but also the number of workloads (VMs) deployed, and the use of other extended cloud services. Respondents continue to run more VMs in AWS than in other public clouds. However, Azure is growing quickly here as well to reduce AWS’s lead.
VMware vSphere continues to lead as a private cloud option (both in adoption and number of VMs) followed by OpenStack and VMware vCloud Director. Two private cloud technologies from public cloud providers, Azure Stack and AWS Outpost, are growing more strongly and generate the strongest interest level for future use.
Download the RightScale 2019 State of the Cloud Report from Flexera for the complete survey results.
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