Technology

The rising prominence of hybrid cloud in the Nordics

Joen Meier Olsen, senior manager of strategy advisers in EMEA for Apptio, says: “The hybrid cloud conversation in the Nordics focuses more on a cloud-if-it-makes-sense principle, rather than a cloud-first principle. Companies are moving to the public cloud if it makes sense from a financial or operational perspective compared to the existing setup, whereas the rest of EMEA is probably more a cloud-first approach.” 

Nordic organisations were early adopters of private cloud, developing the skill set and the operational intelligence to run clouds in their own datacentres or in a co-location arrangement. But as is often the case, early adopters of one technology become laggards when faced with a subsequent innovation. 

“Because so many Nordic companies have been using private clouds with local vendors for such a long time, public cloud offerings were not immediately attractive in that market,” says Margaret Dawson, vice-president of portfolio strategy for Apptio, which was acquired by IBM in August 2023. 

According to Olsen, who is based in Denmark, until recently, the public cloud offered the same service as what customers already had. “The only change was that you got it from a different vendor,” he says.  

But public cloud is much more mature now, offering many of the things that were previously seen as lacking in the Nordics, including better regional sovereignty. Public cloud has also become the best way for most organisations to access the latest generation of technology, including artificial intelligence (AI) and remote work tools.

For these reasons, more enterprises in the Nordics are subscribing to public cloud services. But when they do, they usually end up with a hybrid cloud environment, because they like to also keep their private cloud. 

“The main reason companies in the Nordic want hybrid is to do the right thing for the right application and the data in the right place,” says Dawson. “They aren’t going to make a knee-jerk reaction to any one infrastructure.” 

Hybrid cloud offers agility, allowing organisations to make choices based on a given set of needs and removing the risks associated concentrating too much on any one type of infrastructure or location. 

“It helps you to manage your risk,” says Dawson. “It helps you with business continuity and disaster recovery. Another benefit is cost, but only if you have visibility. You can take the cheapest infrastructure when you need it, and you can optimise all of your environments.” 

Making hybrid cloud work 

According to Dawson, cost could be viewed as both a positive and a negative, depending on how the hybrid cloud environment is managed: “If you’re not using the right tools, you probably aren’t optimising cost because you can’t look at everything you need to see – your applications, infrastructure, labour, and different data sources. If you are using the right tools, managing cost becomes a benefit because you have more visibility, which allows you to make optimal choices about where to put your assets.” 

Rationalising where you put applications and data is what Dawson advises people to do. Start out by developing a set of processes and criteria to determine what goes where. Once this is in place, break down the silos inherent to a hybrid environment, then focus on where you put your data and how you keep it under control. 

Maintaining the different skillsets needed to manage the different environments is one of the difficulties inherent to hybrid cloud. “Very few enterprises are doing this in a way that I would call strategic and intentional and cross siloed,” says Dawson. “They have centres of excellence, but they are not enterprise excellent.” 

In some of the larger enterprises a competitive stance arises between the part of the organisations that is being told to optimise applications by moving to the cloud and the datacenter infrastructure people. But business processes need to be consistent – and this can only occur when standardised architectural layers are present across the hybrid environment. Setting up such layers requires cooperation. 

According to Dawson, the effort it takes to get teams to work together pays off. “When you standardise key infrastructure components and orchestration and management layers, you can more easily manage costs,” she says. “You can also minimise the number of vendors you work with, which gives you less work just keeping things updated. Security and compliance also become much easier.”  

Another challenge with hybrid cloud is where to put the data. All too often, people make that decision without really thinking it through. When this happens, they wind up with very little control. “They have dirty data,” says Dawson. “They have data everywhere. They are struggling to just control it, because that is often more difficult with hybrid could. Now that we’re bringing in AI, it’s going to become even more complex.” 

“If you are dependent on data sources that are highly compliant or highly security sensitive, you cannot move everything to the public cloud,” says Dawson. “You may develop a really cool web front end, but you’re going to keep the application and data source on the mainframe because it works fine where it is. You don’t have to have everything in one place. But you do have to be aware of those dependencies and of the integration and security challenges.” 

Because hybrid cloud is on the rise in the Nordics, organisations in that part of the world are among the first to address the challenges. For this reason, it will be worthwhile for IT leaders in other regions to look for best practices gained by their northern counterparts. 

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