Digital transformation needs to stand on a solid technology foundation that enables great customer and employee experiences through innovative cloud-native applications and modernised core enterprise applications.

To build this flexible, agile and scalable — yet stable, trusted and resilient — digital platform, European organisations increasingly turn to hyperscale cloud platforms as one of the key building blocks. The mix amongst public cloud, private cloud, hosted private cloud and on-premises IT varies greatly between organisations. Some are planning to be — or already are — 100 per cent in the public cloud, whereas others continue to see their private cloud as the major part of their digital platform.

The driver for the adoption of a multi-cloud environment is the drive towards platform-based development around the major cloud platforms and by other new application platforms/communities and industry platforms. When a shared technology innovation model is deployed, including technologies such as containers and serverless computing that support more modular applications, there is a scale-up in code reuse, which ultimately multiplies innovation. Multicloud is the foundation for accelerated innovation on the digital platform.

For a business to move beyond experimentation in the cloud to taking advantage of multiplied innovation, it must first look at rationalising its current technology portfolio. The portfolio rationalisation process reduces the number of overlapping and uncoordinated applications to pave the way for more modernised digital applications. It looks at efficiency of applications, technological fit, functional and business value, business process coverage and gaps, usage and performance, and application maturity. Once the application landscape is well understood, it can be migrated to a multi-cloud environment.

Building the digital platform on a diverse set of public and private cloud environments brings many advantages, such as agility and access to innovation and ecosystems. But it also greatly increases the operational complexity. Major challenges are: cost management of the multi-cloud environment because cost drivers are not well understood; governance processes that are not adapted for the multi-cloud age; and business processes that are not optimised to take advantage of the agility of cloud. For example, if a test and development environment has been online 24×7, it makes sense to change this process to 12×5 once it has been migrated to the cloud, to save costs. Another cost driver is data flow. If the data flow to and from the cloud and between applications is badly architected, costs can spiral out of control.

To be accepted by its users, the digital platform needs to be trusted. Consequently, driving a unified security policy in a multi-cloud environment is important — but it is a big challenge for more than half of European organisations. Unified identity and access management across multiple cloud services is especially tough to achieve.

To help manage the multi-cloud environment, European organisations are starting to implement cloud centres of excellence (CCoEs). These are a natural evolution from cloud tiger teams, which are smaller change agents throughout the organisations. Cloud expertise can be bundled in the CCoE, and members can evangelise about the cloud and also provide governance and guidance to the organisation. CCoEs tend to focus on cloud-native application development first, but increasingly they are advising on — and reducing — multi-cloud operational complexity as well.