Assembling your cloud orchestra

A field guide to multicloud management IBM Institute for Business Value

Executive Report
Cloud

In this report

How multicloud environments are

proliferating in surveyed organizations

Benefits of multicloud management

An approach to managing multicloud

environments

How can IBM help?

The IBM Cloud provides a faster, more secure journey to the

cloud, enabling seamless integration across public, private and
hybrid cloud environments. From bare metal servers to
serverless computing, IBM Cloud offers resources for any
workload. The IBM Cloud is built for your applications, is AI
ready and provides industry-leading security capabilities.
Optimize your multicloud environment using the IBM Cloud with
tools that integrate, broker and give you greater visibility across
your vendor clouds and proprietary IT infrastructure to optimize
new and existing investments. For more information, please visit
ibm.com/cloud.
1

Setting a tempo for Cloud proliferation

multicloud management
Operating in a multicloud environment is a reality for It’s no secret that innovative technologies, empowered consumers and digital disruptors
most enterprise functions today, though too often it are inexorably changing the business landscape, including instigating the proliferation of
happens in silos. Whether it’s human resources cloud-based services. Whether it’s accessing streaming entertainment or collaboration
recruiting candidates, manufacturing tracking tools, consumers and businesses alike have been quick to adopt cloud-enabled services,
shipments or marketing enticing customers, business enjoying lower costs, added convenience and enhanced experiences.
units often circumvent their own IT departments to
Cloud-based services help product developers speed proof-of-concept development,
directly access services on the cloud. Instead of
facilitating the creation of new products and revenue streams. And clouds also assist
ignoring or attempting to stifle organizational forays
marketers enticing buyers, sales teams managing leads and customer service reps
onto multiple clouds, IT needs to get better at
responding to customer inquiries.
facilitating, orchestrating and optimizing enterprise
multicloud footing. Enterprises that assemble Given their benefits, it’s no wonder that the use of clouds and cloud services has
harmonized multicloud platforms now can position proliferated across most organizations – sometimes with and sometimes without IT’s
themselves for greater competitive advantage and knowledge or guidance. In 2018, to learn more about the current state and future plans
lower costs. But it won’t be easy. Here, we provide a for multicloud management, we surveyed 1,106 executives across 19 industries and
field guide outlining challenges, benefits and a clear 20 countries. (For more details, see “How we conducted our research” near the end of
path to successful multicloud management. this report.)
2 Assembling your cloud orchestra

98% Our survey reveals that 85 percent of companies are already operating in multicloud
environments. Adding to the complexity, the majority of these environments are
of surveyed organizations plan to
comprised of multiple hybrid clouds. Hybrid clouds can connect one or more public,
use multiple hybrid clouds within
private or hybrid clouds to on-premises systems and can network one or more clouds to
three years.
other clouds. Seventy-six percent of organizations report they are already using at least

Two-thirds two to 15 hybrid clouds and 98 percent forecast they will be using multiple hybrid clouds
within three years (see Figure 1).
of surveyed organizations say
an actively managed multicloud Figure 1
environment is crucial to reduce The upsurge in complex multicloud environments

operating costs. Today In 3 years

59% Percent of companies Percent of companies

85% 98%
of organizations report that operating in a forecasting using
multicloud multiple hybrid clouds
independent cloud adoption by environment today within three years
business units has already created
a de facto multicloud environment.

Source: How would you characterize your cloud environment? How many cloud services and platforms are
you planning to use across your entire business in the next three years?
 3

Notably, these statistics include only the clouds that executives know about. The
proliferation of shadow cloud services throughout most organizations makes the actual
number of clouds used by typical enterprises inevitably greater than reported numbers.

Many businesses we surveyed are employing various cloud services to drive innovation
and aid business agility. Forty-nine percent of them are establishing a multicloud
architecture to develop new and enhanced products and services. Forty-six percent say
they need a multicloud environment to support agile business processes. Fifty-one
percent use multiple clouds to cultivate a flexible, modular infrastructure that quickly
absorbs and leverages technological advances. Sixty-two percent of surveyed companies
require multiple clouds to create innovative business models, 52 percent need them to
produce new revenue streams and 66 percent need them to enhance margins. Because
of such wide-ranging and valuable potential advantages, multicloud environments are
essential to survival and success in today’s digital era.

Like a symphony that unites an orchestra’s combination of performers and instruments,

organizations need harmonized multicloud environments. To do so requires constructing
and synthesizing the right portfolio of public, private and hybrid clouds with proprietary
IT infrastructures.
4 Assembling your cloud orchestra

Gathering storm clouds

Even though the overwhelming majority of enterprises are, in effect, operating multicloud
Swiss Re saves 250 work days per architectures, relatively few grasp how to manage these environments. By 2021, 98
month with a cloud orchestration
percent of organizations expect to be embracing multicloud architectures. But only 41
solution1
percent currently have a multicloud management strategy and just 38 percent have the
To meet business demands, Swiss Re – a procedures and tools in place to operate a multicloud environment. For example, only 30
global wholesale provider of insurance and percent of enterprises have a multicloud orchestrator or other multicloud management
insurance-based products based in Zurich, platform that can choreograph workloads.
Switzerland, needed to enhance the respon-
Other tools are lacking as well. Fewer than 40 percent of organizations have cloud
siveness of its IT infrastructure. To eliminate
configuration management tools that provide information about resource configuration
organizational silos and automate manual
and relationships between resources. What’s more, only 39 percent have implemented
processes, it adopted a cloud orchestration
DevOps that supports agile builds and deployments.
solution. The orchestration platform executes
45,000 processes per month, reducing the
task burden of the IT operations team, saving
250 work days per month.
 5

The merits of fine-tuned multicloud performance

Fifty-nine percent of organizations report that business unit cloud adoption has already
created a de facto multicloud environment. The potential benefits of actively OSRAM embarks on a multicloud
orchestrating these multiple clouds are clear across three key business dimensions strategy to enable transformation2
– strategy, operations and infrastructure – where cost-cutting takes center stage (see OSRAM, an international lighting manufacturer
Table 1). based in Munich, Germany, provides state-of-
the-art solutions for fast-evolving markets such
Table 1
Benefits of multicloud management as autonomous driving, facial recognition and
entertainment. To nimbly launch new products
Strategic drivers and enter innovative markets, it adopted a
Reduce operating costs 66% multicloud environment. Moving to multiple
Improve customer experience g 62% clouds has enabled OSRAM to adapt rapidly to
Create/support new business models 62% changing market conditions by scaling capacity
Operational drivers up and down as demand fluctuates. As
Reduce operating costs 66% important, its multicloud environment has
Deliver a self-service customer experience 68% freed up IT personnel to focus on continued
innovation while yielding a seven-digit annual
Provide executives with visibility, governance and control 57%
cost savings.
Infrastructure drivers
Cut infrastructure costs 65%
Avoid vendor lock-in 59%
Improve latency 59%

Source: Respondents rated the importance of strategic reasons, operational drivers and infrastructure
drivers in establishing a multicloud environment. Percentages reflect respondents who consider a driver
to be important or very important.
6 Assembling your cloud orchestra

Multicloud harmonization

As an organization’s cloud use expands to multiple cloud providers, developing a

Who are the “multicloud maestros?” multicloud management plan is vital to reducing technology redundancy and promoting
We have dubbed the most proficient operators business agility. For your multicloud environment to optimally address business needs,
of multicloud environments multicloud first determine which business processes should be in the cloud. Then identify which
maestros. Making up 20 percent of our global technical building blocks and management tools best support business objectives,
survey sample, our multicloud maestros state keeping in mind that employing cloud-native standards offers the business flexibility to
that they are already using multiple clouds to use assorted cloud vendors.
smoothly and routinely deliver one or more 1. Workloads in the cloud multiverse
business functions. To help determine which business activities should be considered for a move to the cloud,
we developed a value chain “heat map” analysis of our survey results (see Figure 2). This
analysis provides a blueprint that shows the degree to which the proficient multicloud
maestros expect to use cloud services across their value chains within the next three years.

A successful multicloud environment interplays customer-facing clouds with those that

facilitate product and service development, and those that drive operations and support
functions to increase front- and back-office business agility. Analysis shows that
customer-facing activities, like those in marketing, sales and customer service, are
migrating to the cloud.

But so are mission-critical product development activities, manufacturing and operations

processes and support tasks in human resources, finance, procurement and IT. As shown
on the heat map, within three years, at least a quarter of multicloud maestros expect each
function surveyed to be in the cloud.
 7

Figure 2
Multicloud maestros planning to use cloud by 2021 for business activities

Technical infrastructure
Application dev. Website and Productivity and Infrastructure Enterprise mobility IT service Asset Security
and testing hosting collaboration tools services management management management

Finance and accounting

Asset Financial Procurement/ Transaction Treasury and General Accounting External Risk and Business
management plan/budget/ purchasing and investment investments ledger/ close and financial compliance performance
forecast financial ops consolidation reporting management management

Human resources Other administration

Payroll Travel and Performance Employee Ecosystem
ERP Benefits expense Learning and data and info Legal
processing management development management
management management

Design and production Marketing Sales Customer service

Marketing database Sales Omni-channel
management forecasting management

Inbound/ Supply chain Lead Contact Customer profile

outbound logistics management management management

Content Opportunity Social media

creation/management management management
Research and Product design and
development development Marketing data Lead Case
analysis management management

Manufacturing/production/ Digital marketing Reports and Contact

operations execution dashboards management

Agency coordination/ Order

collaboration management

25% - 49%
50% - 100%

Source: IBM Institute for Business Value analysis.

8 Assembling your cloud orchestra

If your organization isn’t already thinking holistically about placing most key business
processes in a multicloud environment, don’t be surprised if you start falling behind
competitively. Multicloud maestros outperform on key metrics, including growing
revenues, profitability, efficiency and effectiveness in achieving objectives (see Figure 3).

Figure 3
Multicloud maestros outperform their counterparts

Revenue growth Profitability Efficiency Effectiveness

+59% +44% +117% +138%

32% 51% 43% 62% 35% 76% 29% 69%

Others Multicloud Others Multicloud Others Multicloud Others Multicloud
maestros maestros maestros maestros

All industries, except

government and education Government and education

Source: Respondents rated the success of their organizations on multiple metrics compared with
competitors over the past three years. Percentages reflect respondents who report somewhat or
significantly better performance for a business process.
 9

2. Technical building blocks of multicloud management Figure 4

Key multicloud building blocks: Application development
As organizations move diverse business activities to multicloud environments, they are
example
adopting an open modular architecture. Not only does this enable workloads to move
between on-premises, private and public clouds, it also allows movement across Cloud management platform
different vendor clouds on an as-needed basis. To operate efficiently in this environment,
many organizations have begun employing key technical and management “building Application development layer

blocks.” These facilitate work and portability across multiple internal and external clouds Containers Micro-services
Virtual Serverless
machines cloud services
(see Figure 4).

Cloud management platforms. Easing the complexities of managing cloud services Source: IBM Institute for Business Value analysis.
across multiple providers, a cloud management platform provides management,
visibility, automation and orchestration across cloud providers using policy-based tools.
Effective platforms present a single, self-service interface that enables configuring,
provisioning and deploying of development environments, as well as integration of
service management and monitoring, backup and security. Today, almost two-thirds
of multicloud maestros report already using cloud management platforms.

Containers. Within three years, 61 percent of multicloud maestros predict that at least 80
percent of new apps will be developed using containers. Docker containers provide
optimal portability across cloud and on-premises environments. If they aren’t already,
not only will your developers be using containers, they will need a container orchestrator,
like Kubernetes, that automates deployment, networking, scaling and management
of container operations. Today, 50 percent of multicloud maestros are already using
Docker containers and 63 percent are using containers-as-a-service. By 2021, 65 percent
expect to use container orchestration.
10 Assembling your cloud orchestra

Micro-services. Micro-service architectures have emerged as the preferred way to

engineer robust, scalable cloud-native solutions. Using the micro-services model for
developing cloud apps allows developers to quickly and iteratively redesign, replace
and augment customer experience based on dynamic interaction with users in the field.
Fifty-six percent of multicloud maestros already use micro-services in their cloud
environments.

Virtual machines. Offering enhanced flexibility, virtual machines are runtime

environments implemented in software that imitate physical servers. Virtual servers
allow provisioning and scaling on demand to meet workload requirements. Within three
years, 48 percent of multicloud maestros plan to use virtual machines in their cloud
environments.

Serverless cloud services. Serverless platforms let developers quickly and easily build
feature-rich apps that respond to events. Instead of provisioning servers, manually
configuring clusters, or worrying about networking and software administration,
developers focus on writing code. Within three years, over half of multicloud maestros (59
percent) plan to use serverless cloud services in their cloud environments.
 11

Challenges to multicloud adoption and

management
Even with key management and technical building blocks in place, implementers of
multicloud environments encounter several adoption challenges. Fifty-seven percent of
all multicloud managers worry about security and compliance, and the same number
report having concerns about governance and control. Fifty-six percent report managing
and optimizing cloud costs as an additional hurdle. And then, even after a multicloud
environment is adopted, managers cited significant ongoing challenges in managing it
(see Table 2).

Because managing multicloud infrastructure is demanding, even multicloud maestros

don’t go it alone. Multicloud maestros lean on vendors more than companies who are less
adept at managing multiple clouds. Fifty-eight percent of multicloud maestros are using
cloud vendors today to help manage their multicloud environments compared to 43
percent of other organizations. By 2021, 72 percent of multicloud maestros plan to be
using cloud vendors.

Table 2
Most significant challenges to multicloud management success

Multicloud management challenges

Managing and optimizing cloud costs 63%
Meeting desired performance goals 61%
Establishing IT governance and control 55%
Ensuring security and compliance meets needs 55%

Source: How significant are the following challenges your organization faces in managing a multicloud
environment? Percentages reflect those indicating changes are significant or very significant.
 12 Assembling your cloud orchestra

A multicloud management roadmap

Figure 5 Enterprises up to the challenge of managing a harmonized multicloud environment can
The path to multicloud management
position themselves to reap significant rewards, including decreased IT infrastructure
1. Develop goals costs, less downtime, fewer application outages, reduced data loss, increased visibility,
and governance
governance and control across the entire IT infrastructure, decreased operating costs,
improved customer experience, new revenue streams and expansion into new markets.
4. Build in
the cloud But, pursuing these benefits requires a new approach to managing your multicloud
environment (see Figure 5).
5. Continually
adapt 1. Determine goals and governance. Align goals for your multicloud environment with
2. Enlist your strategic plan. Do you need a multicloud environment to enhance customer
help
engagement? Are you seeking enhanced product/service innovation? What kinds of
operational improvement are you pursuing? What types of cost reduction are you
3. Move to
the cloud targeting?

Once goals are established, set up your cloud governance. Create a multicloud
Source: IBM Institute for Business Value analysis.
steering committee that includes line of business executives, IT architects, IT
operations, application developers and multicloud management subject-matter
experts. Use this committee to break down organizational silos and build a seamless
multicloud culture.

Just as an orchestra needs a conductor, an enterprise needs a principal architect to

harmonize its multicloud environment. Empower IT with an enterprise-wide
multicloud oversight role. Without IT’s leadership, organizations run the risk of
constraining business advantage while incurring unnecessary costs due to inefficient
and duplicative ventures into cloud adoption.
 13

2. Enlist help. Determine where additional skills and resources are needed. Obtain them
to build and manage your multicloud infrastructure. Bring together an ensemble of
complementary cloud providers that meet your goals. Consider partnering with a
multicloud vendor to help build and manage your harmonized multicloud environment.
Today, 56 percent of multicloud maestros use vendors to help manage multiple clouds.
By 2021, surveyed organizations expect that number to soar to 72 percent.

3. Move the right stuff to the right cloud. Forty-three percent of multicloud maestros
expect that, by 2021, most existing apps will have migrated to the cloud. Identify
which workloads go into the cloud now, which go later, and whether any should not
migrate to a cloud at all.

Determine the cloud platform best suited to each workload. This isn’t just a “lift
and shift” of existing apps into clouds. It involves upgrading applications to add
cloud services while migrating them to the cloud and refactoring existing apps to a
microservice-based architecture. Be aware of geographic constraints on data location
in establishing priorities related to latency and performance.

4. Build new apps in the cloud. Fifty-six percent of multicloud maestros expect that, by
2021, most new apps will be built in the cloud. Each time your organization needs a
new app, ask if there is a reason not to develop it in the cloud. Default all new app
development to the cloud by adopting and evolving the necessary technical building
blocks, like containers and micro-services.

5. Continually adapt. Monitor and keep evolving your governance and multicloud
environment to fit your organizational priorities, competitive environment, emerging
technologies and cloud management platforms. Operate your multicloud environment
to propel a culture of unceasing improvement.
14 Assembling your cloud orchestra

How will you assemble your cloud orchestra?

Related IBV publications Which benefits will your organization pursue by actively managing your multicloud
Kesterson-Townes, Lynn, Arvind Krishna and Sanjay environment?
Rishi. “Winning cloud strategies: How leading
How does your organization’s planned multicloud management approach compare to
companies score.” IBM Institute for Business Value.
that of multicloud maestros? Which of your business processes are behind? Is your
November 2017. ibm.biz/winningcloud
organization using key technical building blocks?
Karpovich, Bill, Lynn Kesterson-Townes and Sanjay
What is your action plan for orchestrating a multicloud infrastructure? What steps should
Rishi. “Beyond agility: How cloud is driving
your organization take to mitigate barriers and accelerate your multicloud management
enterprise innovation.” IBM Institute for Business
success? Are there any lessons learned based on how your organization
Value. April 2017. ibm.biz/beyondagility
has actively managed (or not managed) multiple clouds to date?
Freese, Robert, Anthony Karimi, Julie Schuneman
What is the opportunity cost if you don’t coordinate your organization’s forays into
and Meenagi Venkat. “Tailoring hybrid cloud:
multiple clouds?
Designing the right mix for innovation, efficiency and
growth.” IBM Institute for Business Value. August
2016. ibm.biz/tailoringhybrid
 15

Authors
Steve Cowley is General Manager of IBM Cloud. He is responsible for worldwide go-
to-market activities, including sales, technical sales and solutioning, ecosystem
development, client experience, and the success of clients and partners. Steve can
be reached at linkedin.com/in/stevencowley, Twitter at @Steven_Cowley and email at
scowley@us.ibm.com.

Lynn Kesterson-Townes is Global Cloud Leader at the IBM Institute for Business Value.
She has over 20 years of expertise in management consulting, business development,
strategic planning, marketing, and mergers and acquisitions. Lynn can be reached at
linkedin.com/in/lynnkesterson, Twitter at @LynnKesterson and email at lkt@us.ibm.com.

Arvind Krishna is Senior Vice President for Hybrid Cloud and Director of Research at IBM.
He leads the IBM hybrid cloud business, including strategy, product design, offering
development, marketing, sales and service. Arvind can be reached at linkedin.com/in/
arvindkrishna, Twitter at @ArvindKrishna and email at arvindk@us.ibm.com.

Sangita Singh is General Manager of Global Cloud Consulting Services for IBM Global
Business Services. She is responsible for the IBM portfolio of cloud consulting services
and leads a global team focused on helping clients harness cloud computing technology
to drive business innovation across their value chains. Sangita can be reached at linkedin.
com/in/sangita-singh-64ab3927, Twitter at @sangitasingh101 and email at sangsi08@
in.ibm.com.

Contributors
Blaine Dolph, IBM Fellow, Vice President, Offering Leader and CTO for Cloud Application
Innovation, IBM Global Business Services

Buell Duncan, Vice President Marketing, IBM Hybrid Cloud

16 Assembling your cloud orchestra

How we conducted our research For more information

To investigate the current state and future plans To learn more about this IBM Institute for Business Value (IBV) study, please contact us
for multicloud management, in 2018, we at iibv@us.ibm.com. Follow @IBMIBV on Twitter, and for a full catalog of our research or
surveyed 1,016 executives in 19 industries to subscribe to our newsletter, visit: ibm.com/iibv.
headquartered in 20 countries. Thirteen percent Access IBM Institute for Business Value executive reports on your mobile device by
of respondents held the title of CEO or Head of downloading the free “IBM IBV” apps for phone or tablet from your app store.
Strategy while 30 percent held the title of CIO,
The right partner for a changing world
CTO, Head of IT or Head of Technology.
At IBM, we collaborate with our clients, bringing together business insight, advanced
Industry Region research and technology to give them a distinct advantage in today’s rapidly changing
5% Automotive Africa and
8% Banking 20%
9%
Middle East
environment.
6% Chemicals
Asia-Pacific
5% Petroleum
5% Electronics
36% Latin America IBM Institute for Business Value
26%
6% Consumer products Europe The IBM Institute for Business Value, part of IBM Services, develops fact-based, strategic
4% Education 10% US and Canada
8% Energy and utilities insights for senior business executives on critical public and private sector issues.
5% Government/public
5% Healthcare
6% Industrial Products Role
6% Insurance CEO
6% Life sciences/pharma 13%
29% COO
5% Media and entertainment
6% Retail 14% CIO
6% Telecom CFO
4% Transportation 14% Head of
4% Travel 30% innovation
5% IT services
 17

Notes and sources © Copyright IBM Corporation 2018

1 IBM and Swiss Reinsurance industry case study. “Swiss Reinsurance Co. Ltd. IBM Corporation
New Orchard Road
Accelerating application provisioning and IT operations with an IT service
Armonk, NY 10504
orchestration solution.” 2017. https://www.ibm.com/common/ssi/cgi-bin/
Produced in the United States of America
ssialias?htmlfid=KUC12441USEN&dd=yes&
October 2018

2 Ebner, Dr. Claus, Global Head of IT Infrastructure and Operations, OSRAM and Martin IBM, the IBM logo, ibm.com and Watson are trademarks of
Daigneault, Global Head of IT Processes and Applications, OSRAM. “Working with International Business Machines Corp., registered in many jurisdictions
worldwide. Other product and service names might be trademarks of
IBM, OSRAM embarks on a multicloud strategy to enable transformation.” https:// IBM or other companies. A current list of IBM trademarks is available on
www.ibm.com/blogs/cloud-computing/2018/05/23/ibm-osram-multicloud- the web at “Copyright and trademark information” at: ibm.com/legal/
copytrade.shtml.
strategy/; IBM and OSRAM case study. “OSRAM lights the way to glittering business
This document is current as of the initial date of publication and may
transformation.” 2018. https://www.ibm.com/case-studies/osram
be changed by IBM at any time. Not all offerings are available in every
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This report is intended for general guidance only. It is not intended

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