The Multicloud Maturity Report
How to Control Data Costs and Scale Innovation for Business Success A Seagate Technology Report Powered by Data from ESG
01 Jun, 2023
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Table of Contents:
Seagate Technology partnered with ESG to develop custom research to make sense of the growing multicloud complexity and the challenges it poses to business data. The goal of the research was to provide insight to business leaders about how their cloud-savvy peers are using cloud infrastructure to drive innovation while also controlling costs in the cloud—and to gauge the resulting business benefits.
The insights provided by The Multicloud Maturity Report come from a global survey administered in February 2022. The number of survey respondents was 500. Respondents comprised senior leaders in IT (71%) and software development/data analytics (29%). The leaders have influence over their organization’s storage, cloud, and/or data management technology decisions. Their organizations store at least some of their data in the public cloud. They work for small/midmarket (less than 1,000 employees, 24%) and enterprise (1,000+ employees, 76%) organizations—all with at minimum 1PB of unstructured data under management. Multiple industry verticals are represented, including technology, manufacturing, communications and media, and business services among others. The respondents live in Australia, Canada, India, New Zealand, Singapore, the United Kingdom, and the United States.
Enterprise Strategy Group, or ESG, is an integrated technology analysis, research, validation, and strategy firm that provides market intelligence, actionable insight, and go-to-market content services to the global IT community. ESG is recognized as one of the world’s most influential technology analyst firms.
Practice Director Scott Sinclair, Senior Analyst Rob Strechay, and Senior Director of Custom Research Adam DeMattia led the survey project and analysis at ESG.
Seagate Technology crafts the datasphere, helping to maximize humanity’s potential by innovating world-class, precision-engineered, mass-data storage and management solutions with a focus on sustainable partnerships. A global technology leader for more than 40 years, the company has shipped over three billion terabytes of data capacity.
Learn more about Seagate by visiting www.seagate.com.
Multicloud is a mess—and, more likely than not, your organization’s data must make the best of it. At a time when IT organizations are extra concerned about their budgets, it’s crucial to both minimize costs and maximize innovation. This report provides a plan for how to do it.
Drawing on an original global survey of senior IT and business leaders, the report constructs a unique Multicloud Maturity Model depicting the growing multicloud complexity. More importantly, it equips business leaders with specifc steps they can take today to navigate the mix of clouds in a way that controls data costs and accelerates innovation. The survey reveals that following these steps results in tangible benefts: companies that score high on multicloud maturity see greatly improved valuations, faster time to market, and the ability to beat revenue goals.
We live in a world of accelerating innovation, much of which depends on business leaders wielding dizzying sets of new tools, services, and cost models. Not to mention the ecosystem in which data, the currency that powers innovation, moves—the multicloud.
If you ask Seagate CIO and EVP of Storage Services Ravi Naik, he’ll say that “in ideal terms, the multicloud is the ability for data workloads to be migrated on and off clouds and among different clouds in a frictionless manner and as needed—with no lock-in, no concern of throttling, and no penalties for pulling data off and moving workloads around.”
“But,” he’ll caution, “this world doesn’t exist today.”
In this sense, there is no such thing as the multicloud—yet.
There are only multiple clouds. The various cloud repositories of the multicloud ecosystem raised tall walls around them. Data can get in easily; leaving is another story. The clouds do not freely talk to each other. This system makes it diffcult for organizations to choose one platform today and a better platform tomorrow.
Ironically, the resulting lock-in paralyzes the very thing for which a multiplicity of clouds are built—data. And it impedes the business value that this data contains.
The multicloud ecosystem too often alienates business leaders from their own organizations’ data.
Today, a variety of approaches are used to ascertain multicloud complexity. A report like this could concern itself with the full stack or end-to-end benchmarks of multicloud maturity. There are other industry leaders that take such strategies and do it well.
For over four decades now, Seagate has been a data-centric company. It should not be a surprise then that this report and the survey we commissioned apply a data-centric lens. The survey is designed to refect the too-often missed primacy of data to modern enterprise business strategy.
Like it or not, multicloud strategy is often imperative to enable data-centric business value. It is the context in which business data lives, the air that data breathes.
Much as the idealists among us may wish for one single cloud, for most companies that is far from reality. The muliticloud is not going away anytime soon. (When we use the term muliticloud in this report, we mean the multiplicity of clouds that aren’t great at communicating and tend to lock in data.) Our investigation takes this messy multicloud reality as a given. We fnd it useful to ask how enterprises can best support their underappreciated business currency—data—in its current context.
The survey on which this report is based shows clearly that what businesses do with their data matters. It makes a difference to outcomes, such as revenues, profts, net promoter score, the ability to meet budgetary goals, and even the valuation of a company.
Invariably, companies that scale successfully are the ones that put data at the core of all they do. The most mature multicloud strategies are data-centric strategies.
Business data moves and lives among a mess of clouds and is subject to the friction brought by poor communication among them.
Data costs further exacerbate the ecosystem’s complexity.
The survey points to a way out.
The higher the total multicloud maturity, the better the business rewards.
The higher the total multicloud maturity, the better the business rewards.
The survey ties the data cost and innovation stories to forward-looking valuation.
Last but not least, the survey also asked: What are the multicloud maturity leaders doing with their data that others can learn from? The report lists specifc steps that companies can take no matter where they place on the multicloud maturity spectrum.
It makes sense to follow industry convention in speaking about the multicloud in the singular (as if it were a coherent whole). Equally it makes sense to be realistic: as we noted earlier, there is no such thing as a unifed, well-functioning multicloud (yet). There are only multiple clouds—a jumble of clouds that, frankly, have a hard time communicating. This reality, as this report will show, poses risk to the value businesses can derive from their data.
The survey underpinning this report gives testimony to the growing friction that data moving among the clouds encounters: multicloud complexity. To say that the complexity of the multicloud ecosystem is intensifying these days is an understatement.
Before delving into the survey results illustrating the complexity, let’s briefy acknowledge the context for all this: data is, of course, growing at an astounding rate. Any and all available sources confrm this. According to ESG’s Multicloud Maturity survey, the median three-year compound annual growth rate (CAGR) for unstructured data under management is 39.4%. Seagate’s 2020 Rethink Data report noted that enterprise data, which grows faster than consumer data, was expected to have an average annual growth rate of 42%. This corresponds to other research documenting the staggering growth of the datasphere (that is, the totality of data created, consumed, and stored in the world).
“The Global DataSphere is expected to more than double in size from 2022 to 2026,” according to John Rydning, research vice president of IDC’s Global DataSphere program. “The Enterprise DataSphere will grow more than twice as fast as the Consumer DataSphere over the next fve years, putting even more pressure on enterprise organizations to manage and protect the world’s data while creating opportunities to activate data for business and societal benefts.” According to the 2022 Global DataSphere forecast report by IDC,
in 2022 enterprises were on track for generating 59 zettabytes (ZB) of data. In 2026, they are forecast to generate 155ZB. All this is part of 221ZB of data that IDC predicts will be generated overall in the global datasphere in 2026.
The world is awash with data. And masses of data need to be going places—at times resting for the short term, and at others coming to stay for good. In many cases, these locations (momentary or long-term) are part of the multicloud ecosystem. And so we arrive at our conundrum.
The Multicloud Maturity survey conducted by ESG renders a reality dense with communication issues. And business leaders are feeling the pain of this friction. The survey fndings detail the swelling complexity:
Both data and troubleshooting intelligence about the data get lost in the multicloud fog. The most frequently reported challenge is the inability to pinpoint the root cause of problems when they are detected (30% of respondents). And 64% of respondents report service-impacting issues on account of intercloud application integration failures at least once a month.
As the next section shows, the complexity of infrastructure results in the often inscrutable and volatile data- related costs, which further intensify friction.
The survey driving this report makes a unique contribution to the existing multicloud explorations by linking data-driven costs and data-driven innovation in the multicloud context. For this purpose, ESG analysts constructed the Multicloud Maturity Model. Organizations were appraised based on specific inputs in areas of multicloud cost maturity and multicloud innovation. The two sets of inputs were then combined into one macro Multicloud Maturity model. This section deals with data cost maturity; the next one examines innovation maturity; and the ensuing section contains insights on the aggregate model that combines both cost and innovation maturities.
In the area of data-related costs, respondents were placed into one of three groups based on the steps they’ve taken to more effectively manage cloud storage costs.
ESG employed a point-based scoring system. Organizations could earn up to 50 maturity points based on how they answered five questions related to how they manage cloud storage costs:
ESG then segmented organizations based on the total number of points earned. The breakdown of organizations in the research is as follows:
Stage 1 (least mature organizations): 25 or fewer points—30% of organizations represented.
Stage 2 (moderately mature organizations): 25.5-35 points—52% of organizations represented.
Stage 3 (leaders): More than 35 points—18% of organizations represented.
When it comes to multicloud cost control, a variety of challenges loom. The 2020 Seagate report Rethink Data found that only 32% of data available to enterprises is used. We wondered: Were business leaders unaware of the lost opportunity? The Multicloud Maturity survey signals that they are aware of it, but—at least in part—multicloud’s data-related costs get in the way of data value.
Business leaders aren’t as in charge of their organizations’ own data as they should be:
The numbers in this section paint a picture of an immensely valuable business currency—data—whose potential is nowhere near reached.
High egress fees and existing commitments lock data in with a provider and prevent easy movement between environments. It makes it harder for data to go where it is needed, or where it can render its insights.
Splitting data between environments limits workload portability and increases compliance risks.
Exponential data growth, high costs, and hidden fees substantially increase storage TCO.
Fragmented systems require companies to double-down on security and resiliency to minimize weak links.
Does greater multicloud maturity around data costs matter all that much? In what ways?
It does pay to be a leader. The survey found that:
How do non-leader organizations inch closer to full multicloud maturity? The good news is that no matter where an organization places on the maturity model, there are steps it can take to improve its cost- related multicloud prowess. The following spider web chart shows how leaders differed from less mature organizations, providing some clues.
To gauge how your organization would score on multicloud cost control maturity, ask yourself the following questions.
Do you use third-party cloud cost estimation tools?
Which requirements do you carefully evaluate before determining where to store data?
Which characteristics does your organization monitor continuously over time?
Which investments has your organization made in the last 12 months to help effectively manage cloud storage costs?
How automated are each of the following tasks for cloud storage at your organization today?
To compare your answers with how maturity leaders did, take a look at page 15, including the spider web chart. And for ideas on how your organization can do better, see the advice in the following section.
Leverage tools that help measure the cost of cloud resources for every deployment decision. Leaders were 12× more likely to utilize third-party cloud cost estimation tools every single time when making a data placement decision. Stage 1 organizations were far more likely to either say they do not leverage third-party cloud cost estimation tools or that they do—but only for some of the time.
Prior to deploying applications, evaluate multiple requirements—such as performance, availability, data mobility, API, and user network bandwidth—to ensure that your application will be able to deliver the expected user experience. Leader organizations not only evaluated twice as many deployment criteria as Stage 1 organizations on average, but they were also far more likely to look at availability and API requirements in their evaluation. Moving applications is costly and complex. Do sufficient upfront analysis to ensure that your app will deliver as expected.
Once applications are up and running, continue to monitor the environment to ensure that the requirements or capabilities do not change over time. Leader organizations monitored almost twice as many application characteristics—such as performance, availability, data mobility, API, and user network bandwidth— than Stage 1 organizations on average. Leader organizations were also 2.3× more likely monitor the user network capabilities than Stage 1 organizations. This suggests that in order to ensure the right user experience organizations need to monitor both the application environment and the user environment.
To ensure that your organization continues to effectively manage your cloud costs, invest in the right tools as well as training. Both Stage 3 and Stage 1 organizations were relatively similar in their investments in training and additional staff. But leaders (Stage 3) were far more likely to invest in tools and technology, such as automation tools, visibility tools, or storage platforms that are cross-environment compatible. For example, most mature organizations were 3.1× more likely than Stage 1 to invest in tools that offer comprehensive visibility across their multicloud environment.
Digital businesses benefit from the accelerated operations that result from the increased use of automation. Automate processes to reduce the burden on personnel as much as possible. Leaders automated more than twice as many functions—such as monitoring data flows, the provisioning and updating of end-user access permissions, the protection of data, and the enforcing data security—than Stage 1 organizations on average.
When trying to prove the connection between actions and outcomes with research, you never really know if your hypothesis will be borne out. In this case, it is clear that an organization’s actions move the needle both on cloud costs and innovation outcomes. It’s unique how the combination of both taking action on cloud costs and promoting innovation with cloud ops can lead to a dramatic impact on the health of the business.
In addition to cost control, the Multicloud Maturity survey looked at organizations’ ability to scale innovation. As part of the Multicloud Maturity Model, respondents were asked for specific inputs in areas of both multicloud cost maturity and multicloud innovation. The two sets of inputs were then combined into one macro Multicloud Maturity Model. The previous section deals with data cost maturity; this one examines innovation maturity; and the following section combines the two types of multicloud maturity into a macro model and ascertains business results.
In the area of data-driven innovation, respondents were placed into one of three groups based on the steps they’ve taken to more effectively use cloud technologies to drive innovation.
ESG employed a point-based scoring system. Organizations could earn up to 30 maturity points based on how they answered three questions related to how they leverage data in the multicloud to fuel innovation:
ESG segmented organizations based on the total number of points earned. The breakdown of organizations in the research is as follows:
Stage 1 (least mature organizations): 15 or fewer points—27% of organizations represented.
Stage 2 (moderately mature organizations): 15.5-25 points—59% of organizations represented.
Stage 3 (leaders): More than 25 points—14% of organizations represented.
The survey results are decisive: Organizations that empower data consumers to effectively use the cloud to free up their data for innovation saw meaningfully better business results.
When companies offered streamlined access to data, enabled data’s seamless movement to get data to innovators quickly, enabled self-service for data and infrastructure consumers, and frequently educated data consumers on how to provision data and infrastructure, their businesses thrived.
Here are the most significant findings:
What the survey makes clear is that it is not enough for businesses to amass data. Data alone is not insight. A non-negotiable for converting data into insight is access—easy, quick, built-in access to data for its intended users. Without access, there is no insight. Without insight, there can be no innovation.
To wit: The survey found that the most innovation-mature organizations are 3× more likely to get data in the hands of developers significantly faster than they did 12 months ago.
Finally, those working for the most innovative companies express much greater enthusiasm for their organizations as measured by the net promoter score (NPS). NPS measures customer loyalty, satisfaction, and positive impression. It answers the question, “On a scale from 0 to 10, how likely are you to recommend this company to a friend or colleague?”
We wanted to find out what kind of NPS feedback is common for the IT organization among the data users within companies that invest in the most in data-driven innovation.
The survey shows that maturity leaders’ IT organizations enjoy significantly higher NPS. Those working for the most innovative companies express comparatively much greater enthusiasm for their IT teams (see Figure 8).
Given the clear benefits of investing in data-driven innovation, what are the ways for non-leaders to punch above their weight? Much like with multicloud cost maturity, the good news is that no matter where an organization places on the maturity model, there are steps it can take to improve its data-driven innovation results. The following spider web chart depicts how leaders differed from less mature organizations.
To determine how your organization would score in the area of multicloud maturity related to scaling innovation, ask these four questions.
How would you rate the technologies, processes, and skills in place to streamline data access to innovators?
How would you rate the technologies, processes, and skills in place to activate data and seamlessly move it to where it needs to be?
What proportion of data consumers can provision data and infrastructure for their projects in a self- service manner?
How often do you conduct training and knowledge sharing with data consumers to help them understand, request, and provision data and infrastructure with a technology profile that matches workload requirements?
To compare your organization with how the leaders did, take a look at pages 20 and 21, including the spider web chart. And for ideas on how your company can level up, turn to the advice in the following section.
Leaders are 4.2× more likely to identify as “very strong” in this area. This is where measuring your perception and your internal customers’ perception of how well they access the data will be key. Take it group by group, step by step. Select, for example, the data scientists—and explore with them how you can get them to the point where they confirm that they have the access they need at least 80% of the time.
The multicloud-mature organizations are 2.6× more likely to identify as “very strong” on this front. Focus on the right data moving to the right place at the right time. This could be using multiple technologies, from very sophisticated application service mesh to orchestrated secure file transfer protocol. There is no need to jump straight into a cloud-native way of moving data seamlessly. You can make progress by looking for the data path of least resistance. And remember that you must take into consideration data governance and country regulations.
On average, leaders provide 2.1x as many of their data consumers with the ability to access data and infrastructure in a self-service manner. A significant gap exists in this area between leaders and Stage 1 organizations. Allowing different data consumers to see and use data on their own will greatly increase their ability to innovate and therefore their satisfaction, leading to higher NPS scores. Look for a tool to aid you on the self-service journey. Of course, there is not a one-size-fits-all tool. A tool effective for data scientists will not fit well for marketing groups. So, pick a persona as a starting place and build out from there.
Leaders are 16.7× more likely to offer quarterly (or more frequent) training, which highlights the importance of combining tools and tech with skills investment. Education can lead to acceptance and better usage of the data infrastructure. This might be a good first place to start by not only leveraging IT resources, but also partnering with outside departments. You will also learn from building these pieces of training some of the gaps that exist for particular data consumer groups within your organization.
NPS of data users are up to 9× higher among multicloud-mature organizations compared to Stage 1 organizations. Measure the NPS and, if it’s not high, follow up with questions and action. You can’t manage what you can’t measure. It is important to at least start with a self-assessment NPS. This means arriving at a number for each of the groups you service with data on how well they think you satisfy their needs with data. This becomes the baseline for other points of action.
Scaling data innovation takes putting together a plan to execute over time. In my experience at a major hyperscaler and several startups, I learned that you must work backward from the data user. Put a name to the persona, fully understand the needs of that persona for data, and talk to them to understand what the gaps are today. Then understand that the strategy has to unfold in stages—no “big bang” all at once—and set expectations with a roadmap that first crawls, then walks, and finally runs to data innovation.
The next section brings cost control and innovation maturities together. What business results are enjoyed by organizations that score well on both? Let’s find out.
Multicloud maturity is only as good as the benefits it offers. What good would it be, after all, if in the end the revenues and valuations of the mature organizations remained at the level of their less mature peers?
A key question driving this survey was: Do organizations scoring high on both cost control and fostering innovation see any tangible results? Adding up maturity in the areas of cost minimization and maximizing innovation rendered a macro maturity model that answers this question.
First, a word on how the fully multicloud-mature companies were identified.
Organizations could earn up to 50 points for practices aimed at managing multicloud costs and up to 30 points for fostering cloud innovation (see previous two sections). ESG analysts segmented organizations based on their total multicloud maturity points earned by adding their scores from both cost and innovation areas.
The aggregate allows us to ascertain the correlation between comprehensive cloud practices—spanning cost management and scaling innovation—and overall business performance.
The overall multicloud maturity scale breaks down as follows:
Stage 1 (least mature organizations): 50 or fewer points—59% of organizations represented.
Stage 2 (moderately mature organizations): 50-59.5 points—27% of organizations represented.
Stage 3 (leaders): More than 60 points—13% of organizations represented.
When trying to prove the connection between actions and outcomes with research, you never really know if your hypothesis will be borne out. In this case, it is clear that an organization’s actions move the needle both on cloud costs and innovation outcomes. It’s unique how the combination of both taking action on cloud costs and promoting innovation with cloud ops can lead to a dramatic impact on the health of the business.
The aggregate allows us to ascertain the correlation between comprehensive cloud practices—spanning cost management and scaling innovation—and overall business performance.
The overall multicloud maturity scale breaks down as follows:
Stage 1 (least mature organizations): 50 or fewer points—59% of organizations represented.
Stage 2 (moderately mature organizations): 50-59.5 points—27% of organizations represented.
Stage 3 (leaders): More than 60 points—13% of organizations represented.
ESG analysts determined that 13% of organizations performing best on both cost and innovation fell into the most multicloud-mature category (a.k.a Stage 3 or leaders).
The formula for multicloud maturity is the following:
What do we know about the business results that this exclusive, most multicloud-mature club enjoys?
The higher the total multicloud maturity, the higher the business rewards.
Organizations that best manage cloud costs and foster innovation with the cloud outperform their peers at a business level. In particular, they:
Remarkably, the multicloud maturity leaders are 5.3× more likely than the other organizations to beat their revenue goals by more than 10%.
Given how well the top mulitcloud performers did on the revenue front, it follows that more of those organizations report greater confidence when it comes to the future of their business.
The takeaway: Taking steps to achieve higher multicloud maturity leads to better business results. The leveling- up strategies shared in sections titled “Assessing Multicloud Maturity: Minimizing Data-Related Costs” and “Assessing Multicloud Maturity: Maximizing Data-Driven Innovation” are well worth implementing.
If a company does well on one of the multicloud maturity pillars—say, cost control—is that likely to predispose it to do well in the other area—innovation? The survey identified some connections.
Companies that succeed at minimizing costs tend to do well when it comes to innovation. The reverse is also true—organizations that excel at innovation tend to be ones that know how to control costs. The correlations are clear on both fronts but are stronger for the latter. The leading innovators outcompete their peers partly because of their cost-controlling skills.
When examining top performers on innovation (only), ESG found they perform well in the area of cost minimization in the following ways:
It’s not a given that when an organization is efficient at cost control (only), it will also excel at innovation. But the survey found that a solid correlation exists between the two. Organizations that outperform others on the cost control front have great results when it comes to innovation in the following ways:
The upshot? If your company is in control of its multicloud costs, it is likely to also be good at promoting innovation. If your organization is great at innovation, it likely got there, in part, thanks to effective cost-saving practices.
Aiming for excellence on both fronts is the multicloud’s holy grail. In an ecosystem rife with impediments, it is a strategy that can free up your data from lock-in, delivering maximum business value.
Multicloud, as we know it, is a jumble of clouds.
It can be tricky for data to navigate the multicloud ecosystem swiftly, seamlessly, and without getting stuck. This reality should matter to any business leader because data is a conveyor of business value.
As this report makes clear, companies that win are ones that keep down data-related costs while scaling data-driven innovation. From consistently using cloud cost estimation tools to investing in tech that enables easy data movement, organizations can take pragmatic actions to become more mature in supporting their data throughout the multicloud. This report identifies these steps.
In many ways, innovation is about eliminating friction that slows down and locks in data—whether it’s cost- or access-related friction.
Multicloud is, for many organizations, a given. Its many sources of friction? They’re optional.
The good news is that we can reassert ownership of our business data, and win more business value as a result. Regardless of where your company scores on the Multicloud Maturity Model, it can enact the practices used by winning organizations to get more out of data.
These practices, no matter how seemingly small, will free up your data as it makes its journey from creation to insight, from insight to innovation, from innovation to market—and finally from market to greater business value.
The next section brings cost control and innovation maturities together. What business results are enjoyed by organizations that score well on both? Let’s find out.
The survey queried senior business leaders from around the globe. The respondents reside in Australia, Canada, India, New Zealand, Singapore, the United Kingdom, and the United States.
Between 91% and 100% of all respondents across every country said their organizations store data across multiple clouds today. The majority of respondents in all markets either strongly agreed or agreed that they often incur unexpected cloud costs related to data egress/ingress after a migration.
As for how they each stand out from the rest, ESG analysts called out a few statistically significant differences. (Australia and New Zealand were combined.)
Take a look:
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