The trends driving cloud migration today may surprise you. Cloud first has supplanted cloud-only as the leading strategy. Meanwhile, tailored hybrid cloud approaches continue to gain popularity, allowing firms to combine legacy infrastructure with more agile cloud components. This flexibility will be key, particularly in the financial sector, argues Terry Storrar, Managing Director, Leaseweb UK.

In the modern corporate landscape, data has arguably become the most essential asset to maintain, analyse, and keep secure. That means most big businesses manage data centres 24/7 as a critical data platform. However, recent years have seen the rise of cloud computing, with many companies migrating core business services to public cloud hyperscalers, such as Microsoft Azure, AWS, and Google Cloud. And yet, as part of this transition to the cloud, we are also beginning to see other trends emerge.

The rise of the hybrid approach

The idea behind a hybrid cloud strategy is to get the best of both worlds: combining the scalability of public cloud options with the customisation and control associated with privately hosted cloud platforms. And this approach is gaining in popularity, Gartner predicts that 85% of infrastructure strategies will integrate on-premise, co-lo, cloud and edge delivery alternatives by 2025, in comparison to the mere 20% investing in such an approach in 2020.

The reason behind this popularity is that a hybrid approach offers enhanced efficiency, lower costs and improved scalability, which together provide increased business agility. On the other hand, companies that depend only on public cloud solutions risk overspending due to ineffective tracking of resource usage.

Costs linked to scaling cloud services from scratch are also rising fast and becoming difficult to sustain. By not locking themselves into limited on-premise infrastructure or the potentially unknown costs of a hyperscale approach, IT managers introduce much more freedom to create personalised data solutions that cherry-pick the best elements of public, private and in-house models. This leads to increased cost-effectiveness, improved agility and the ability to build a robust architecture while minimising the disruption to business operations.

The implications for the financial sector

There are many benefits to finance in using hybrid cloud – for example, easy integration between finance applications, secure data sharing, meeting compliance requirements, and collaboration across locations. It also allows for the ongoing use of valuable legacy platforms. However, there are many challenges data managers must be aware of:

• Security

Security is a priority concern for every business but is particularly important for companies working in financial services. The ‘always on’ style favoured by cloud providers unfortunately also provides a critical attack surface for DDOS attacks, ransomware and many other cyber threats which are growing in volume and methodology at a startling pace. Staying one step ahead of bad actors by integrating robust inbuilt security, including detailed notifications, reporting and dashboards is therefore the best course of action.

Companies should always begin by assessing the current threat levels before deploying to the cloud to ensure defences are secure. It is also important to consider a multi-level approach to security which enables data and users to be classified according to hierarchical security levels.

• Cost

Getting to grips with the cost ramifications linked to any potential hybrid approach is key. Unclear ownership and governance can lead to badly calculated public cloud resource utilisation, which in turn leads to costly resource sprawl. To avoid this, organisations need to effectively track, analyse and monitor resource usage from the outset. Ensure that potential cloud partners can provide a transparent TCO calculation before signing any contract. This should include detailed financial planning and predictable cost models.

Real-time analytics and access to relevant data will optimise cloud usage on a needs-basis, allowing teams to allocate and monitor ownership for each project while maintaining measurable KPIs and regular reporting. From a financial services perspective, such transparency is key.

• Hosting the infrastructure

Deciding where to host your cloud platform will shape how much control you will have over its design, deployment and operation. If it is outsourced, make sure your potential cloud partner shares your approach to performance and reliability. A service model may well also improve security and reduce the burden on often overstretched internal teams.

Although many companies have well-resourced management teams that ensure systems run seamlessly, others prioritise areas such as cloud-native development. Either way, poor decisions about IT and data management can become a primary obstacle to business growth. Bear in mind that the option of advanced virtualised servers and storage make systems easy to run, wherever they might be hosted.

The rise of financial department involvement

Recent research suggests that cloud applications are becoming less dependent on the IT department and, instead finance functions are taking on more responsibility – and budget – for using cloud in the way that works best for their specialist area. This is a trend that is gaining momentum, with 24% of respondents indicating that accounting and finance are taking a proactive role in cloud management. We can hope that this growth in involvement leads to more fully rounded approaches being developed.

Ultimately, it is all part of an ongoing process, not just a single one-off decision. IT Managers and service providers alike must regularly review their architecture to ensure maximum efficiency is always top of the agenda. Hybrid solutions are best placed here because they can be continually monitored and modified to accommodate changing business demands across multiple project lifecycles. This ensures the right capacity at the right time.

So, it’s not about a simple migration to the cloud, instead, it is the connection of several clouds in the most efficient configuration. By adhering to a clear and well-understood business model, taking the considerations we looked at earlier into account, organisations will be able to design and deploy a hybrid cloud strategy that will help them achieve their objective today and many years hence.