European companies are accelerating their adoption of hybrid cloud as a result of the diverse needs of information systems in today’s business environment. This is one of the conclusions drawn by participants at an event in May 2024, organized by IDC in collaboration with VMware, recently acquired by Broadcom. Entitled “How to regain control of your infrastructure and become your own provider of cloud environments?”, this event crystallized the ambitions and challenges facing French organizations, as they shift their complex ISs toward cloud models that need to align with multi-faceted business needs.
This complexity is at the heart of companies' concerns and captures a significant portion of IT budgets across Europe, just as in France. A recent IDC study showed that 26% of companies in Europe spend the majority of their IT budget on hybrid cloud. In France, efforts seem more distributed with a figure of 23%. However, French companies face a patchwork of cloud or on-premise technologies (see graph below), and must now find a balance, with the flexibility to respond to different use cases and innovate in their market.
The Main IT Environments that Capture the Majority of IT Budgets in France
None of the guests contradicted this finding. For example, a mass distribution specialist historically operates in a highly decentralized world where each country evolves at its own pace, with its own IT department, systems and configurations. An ultra-disparate environment could imply a loss of control that requires recentralizing IT and a cloud strategy for convergence. However, this strong decentralization requires an incremental Move-to-Cloud approach, by segment and by country. While knowing that “countries have not evolved at the same speed,” says the mass distribution specialist, “our strategy is slow but the surface area is huge.” The Move-to-Cloud approach was initiated in 2018. Eighty percent (80%) of 4,000 applications relate to GCP (Google Cloud Platform) including the Google Cloud VMware Engine, Azure and OCI (Oracle Cloud Infrastructure).
This same disparity exists at a public transport company whose global operating model means they deal with a multiplication of infrastructure technologies, aggregated through acquisitions. The move to the cloud (at AWS [Amazon Web Services]) represents a way to “rationalize and clean up,” reports their head.
The approach differs somewhat for a banking group, for which Move-to-Cloud primarily goes hand-in-hand with centralization in order to improve the scalability of applications to better serve businesses. Added to this are the constraints of an aging infrastructure. “We couldn’t update it anymore. We moved to the VMware Cloud Foundation,” the head of the banking group explains. Their vast project consists of offering a catalogue of services that can be offered by a hyperscaler, for example. In particular, the group maintains a VMware private cloud, alongside a second cloud, powered by open-source technologies (operated and maintained by a dedicated team). Today, VMware infrastructure supports the business activity of 16 entities with 40,000 VMs (virtual machines). The service is 98%-centralised and benefits from a joint offering to all internal “customers”. The VMware cloud is now used by 80% of the banking group’s businesses.
Finally, for a construction services company of 10,000 staff, the cloud approach is mainly based on SaaS, built on Office 365. For the rest, the company has 500 VMs in its own data center. Another culture and therefore another usage.
Skills and Costs as Main Challenges, Questions about Sovereignty
There are still stumbling points. Firstly, those inherent in the transition phase. The most decentralized companies suffer from disparate budget levels depending on either geography or business entities. This is the case for the specialist in mass distribution, for example. This was also highlighted by a construction services company.
The head of the major banking group points to the security of systems that impacts implementation flexibility together with the experience of customers, especially development teams. For the mass distribution specialist, the absence of specific cloud solutions further hinders the transformation of certain systems, including AS/400s or mainframes.
However, the lack of skills and the difficulty in finding the “right” talent, combined with a lack of strategy, are still the points that unite the testimonies. “Talent management and skills maintenance are what make a successful transition to the cloud,” adds a Broadcom executive. Technology should therefore only represent a means of executing a strategy.
Finally, an essential dimension, on the agenda of many participants at this event, remains to be addressed: sovereignty. This is obviously a matter of regulations. “Today, IT departments are mostly constrained by regulations. Even if it means wondering about the difficulty of ensuring a form of compliance with the cloud: “With the cloud, do we not give up the sovereignty of our data and it does not represent a loss of control of our ISs,” said the head of a major brand in the world of DIY and decoration.
Include the Cloud in a Business Governance Strategy
If there is a common thread among these testimonials, it would be the need to place cloud at the heart of a business strategy. “The cloud must be supported by all heads of a company's entities,” continues the head of a company specializing in trusted digital technology. “What are we seeking? What is the ROI? What are the uses?” asks a participant, illustrating the need for the company to secure the support of businesses within a global programme. As a rebound effect, it also requires companies to question their IT department organization and the company’s “Public Cloud vs On-premise” culture, says another VMware executive.
One of the main outcomes of the dinner is that among the strategies in place or in progress, the implementation of Digital Factory or advanced data projects contributes to a structured approach to the cloud, but also accelerates its use. This is the case for this large retail account. Especially if this is part of an expansion, or even an overhaul of the company's business model: for this specialist in large-scale distribution, the move to a model built more on the service has an accelerating effect for digital technology and its engine, the cloud.
Getting Back to Your Cloud Strategy: VMware’s Current Position
In this context, companies remain particularly sensitive to changes in the market and ecosystems they must deal with. Broadcom has therefore positioned its offering to serve as a centralized platform for all configurations selected by companies, whether private cloud, public, hybrid or not, and to be able to navigate through them. The idea is to be able to assist IT departments to regain control of their ISs in increasingly complex multi-technological environments. “Our approach of optimizing costs allows all company IT use cases (AI, modern applications, enhanced security, etc.) to be addressed while having the ability to change direction in the cloud, both private and public,” says a Broadcom executive, stressing that it is a question of regaining control over the cloud.
With this in mind, Broadcom has announced a programme to simplify its offering with significant functional changes thanks to an investment of more than $1 billion.