Financial services firms flocking to private cloud

The COVID-19 pandemic is prompting half of financial services companies to increase their investment in hybrid cloud, according to the latest annual Enterprise Cloud Index Report from Nutanix.

The 2020 respondent base spanned multiple industries, business sizes, and the following geographies — the Americas; Europe, the Middle East, and Africa (EMEA); and the Asia-Pacific including Japan.

In the industry’s five-year outlook, hybrid cloud is the only IT model showing positive growth among financial company respondents, and it is expected to increase by 39% in that timeframe. 

Also, 43% of financial services companies plan to increase their investment in private cloud over the next year, 10 percentage points higher than the global average of 33%. This shows that private cloud adoption is crucial to creating a modern hybrid cloud.

The report finds that financial services firms ranked security, privacy, and compliance issues as the most concerning when running applications within public cloud solutions (62%). 

Financial services respondents were less concerned with public cloud capacity (30%), showing that while public cloud has the capabilities to support IT infrastructures, the security of sensitive data is non-negotiable, and organisations are looking for alternative solutions.

Also, nearly half of respondents say they’ve either fully deployed hyperconverged infrastructure (HCI) or are in the process of doing so, while 38% report they will be deploying HCI within the next 12 to 24 months. 

This investment is directly aligned with increased private cloud adoption, as HCI reduces the time it takes to build the software-defined, scalable infrastructure necessary to support private cloud.

The sector’s top motivations for modernising its IT infrastructure is to gain greater control of IT resource usage (59%) and to gain the speed (58%), and flexibility needed (55%) to meet business requirements.

Further, more than a third (36%) of financial services respondents said they were short on skills needed to manage mixed private/public cloud environments, while 34% said they lacked expertise in cloud-native technologies and containers, including Kubernetes. These issues have contributed to organisational struggles to fully adopt hybrid cloud.

“Hybrid cloud delivers the benefits and convenience of the public cloud, while offering the security of a private cloud, without compromising efficiency and cost,” said Ho Chye Soon, country manager of Nutanix Singapore. “We can expect hybrid cloud to become the industry norm over the next few years.”