Networking and security as a service provider GTT recently released a white paper based on survey research, showing that the demand for private cloud-based workloads continues to rise.
Hanover Research surveyed 283 IT, infrastructure, networking, security, and other enterprise leaders across the United States and Europe, representing various industries, including retail, hospitality, manufacturing, food and beverage, healthcare, financial services, technology, and more. Each respondent represents an organization with at least six locations and annual revenues of $200 million or more.
Channel Insider spoke with Bastien Aerni, GTT’s VP of strategy and technology adoption, to learn more about the findings and how partners can tap into the growing demand while addressing related needs.
Compliance with privacy and security requirements pushing orgs away from public cloud
GTT’s analysis of the study points to a trend we have covered several times this year: organizations are starting to sour on public cloud.
High-level insights from the research suggest several key trends in spending and where workloads are likely to head over the next few years, with private and hybrid deployments outpacing public options.
The research projects that private cloud spending of over $10 million per year will increase from 43% in 2024 to 53.6% in 2025 – a 24% growth rate. That’s twice the growth rate of public cloud spending among the same cohort, which is expected to grow by just 12%.
Additionally, GTT’s whitepaper asserts that more than half of all AI workloads already reside in a combination of private cloud and on-premises environments, driven primarily by enhanced security (56%), compliance and regulatory demands (51%), AI workload requirements (50%), and cost (35%).
“The results of the study weren’t really a surprise, and were maybe more of a confirmation that we have been seeing isn’t just us, it’s a much wider trend in the market,” said Aerni.
There are likely myriad reasons why organizations have set their sights on private cloud options. Still, Aerni highlights compliance with regulatory frameworks and data protection as key factors influencing decision-making this year.
“I see regulations and compliance as a key reason why organizations are looking at private cloud, and it’s a huge opportunity for partners, too,” Aerni said. “There are layers of complexity within regulations by country or by region, and sometimes they contradict each other, and sometimes they supersede each other. It’s more important now than ever to know where your workloads are and what the controls are around them.”
Aerni also believes organizations are having more educated and nuanced conversations around building the best workloads for the best use cases, with optimizing cost and other factors as a crucial goal for many.
“Public cloud was exciting a few years ago, but too many organizations don’t know how to predict their spend with it. If you have a really successful month or a few months as a business, you might end up stuck with a higher bill, and that’s difficult,” Aerni said.
What partners need to keep in mind for customers in 2025 and beyond
The ongoing search for migration and the general rethinking many organizations are undertaking of their entire environment may be a perfect opportunity for channel partners to prove their value to existing and new customers.
According to the study, concerning public cloud deployments, challenges related to the migration of apps and data, as well as technical skills and feasibility, are the highest ranked at 43%. When migrating workloads to private clouds, the top challenges – each cited by 38% of respondents – are managing apps post-migration, securing hybrid environments, and, once again, a lack of technical skills or feasibility.
“The opportunity here as a provider and a wider channel is to develop the blueprints and frameworks for doing this work that we can take to customers to ensure they migrate or add capacity in the best way possible,” Aerni said.
“As a provider, we position our conversations around how, while we cannot predict the future, we can build a solid foundation for the future,” he continued. “We don’t believe in adding vendors, we believe in organizations leveraging the right platform to get to the outcomes we all want.”
In April, Kyndryl announced private cloud services to meet AI-related demands. Catch up on what those services offer and why Kyndryl thought the offering was necessary for the market.