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In January 2018, RightScale conducted its seventh annual State of the Cloud Survey of the latest cloud computing trends, with a focus on infrastructure-as-a-service and platform-as-a-service.

Both public and private cloud adoption grew in 2018, with larger enterprises increasing their focus on public cloud. AWS is no longer the runaway leader as Azure has grown rapidly and is now a close second, especially among enterprise users. New to the survey this year is data on the large and growing spend on public cloud, which has driven cost optimization to the top of companies' 2018 priority list. To gain control of growing spend, enterprise cloud teams are taking a stronger cloud governance role, including managing costs.

The State of the Cloud Survey is the largest survey on the use of cloud infrastructure thatis focused on cloud buyers and users, as opposed to cloud vendors. Their answers provide a comprehensive perspective on the state of the cloud today.

The survey asked 997 IT professionals about their adoption of cloud infrastructure and related technologies. Fifty-three percent of the respondents represented enterprises with more than 1,000 employees. The margin of error is 3.08 percent.

We highlight several key findings from the survey in this blog post. For the complete survey results, download the RightScale 2018 State of the Cloud Report.

Multi-Cloud Is the Preferred Strategy Among Enterprises

96 Percent of Respondents Use Cloud

More Enterprises Are Prioritizing Public Cloud in 2018

Organizations Leverage Almost 5 Clouds

Serverless Is the Top-Growing Extended Cloud Service

Enterprise Public Cloud Spend Is Significant and Growing Quickly

Enterprise Central IT Teams Shift Role to Governance and Brokering Cloud

Significant Wasted Cloud Spend Makes Optimizing Costs the Top Initiative

Container Use Is Up: Docker Is Used Most Broadly While Kubernetes Grows Quickly

Use of Configuration Tools Grows, with Ansible Showing Strongest Growth

Azure Continues to Grow Quickly and Reduce the AWS Lead, Especially Among Enterprises

Private Cloud Adoption Grows Across the Board

AWS Leads in Users with 50+ VMs While Azure Grows Its Footprint Faster

How AWS, Azure, Google Cloud, and IBM Cloud Stack Up Among Enterprises

In the 12 months since the last State of the Cloud Survey, a multi-cloud strategy remains the preference among enterprises even as the percentage of enterprises who use multiple clouds dropped slightly to 81 percent vs. 85 percent in 2017. Those planning a hybrid cloud strategy fell to 51 percent (from 58 percent in 2017). However, there was a slight increase in the number of enterprises are using multiple public clouds or multiple private clouds.

Both public and private cloud adoption have increased in the last year. The number of respondents now adopting public cloud is 92 percent, up from 89 percent in 2017, while the number of respondents now adopting private cloud is 75 percent, up from 72 percent in 2017. As a result, the overall portion of respondents using at least one public or private cloud is now 96 percent.

Among enterprises, the central IT team is typically tasked with assembling a hybrid portfolio of supported clouds. This year, many more enterprises see public cloud as their top priority, up from 29 percent in 2017 to 38 percent in 2018. Hybrid cloud still leads the to-do list, but has decreased as a top priority for enterprises, declining from 50 percent in 2017 to 45 percent in 2018.

Only 8 percent of enterprises are focusing on building a private cloud, and 9 percent see their top priority as using a hosted private cloud.

On average, survey respondents are using 4.8 clouds across both public and private. Respondents are already running applications in 3.1 clouds and experimenting with 1.7 more.

A significant number of public cloud users are now leveraging services beyond just the basic compute, storage, and network services. Year over year, serverless was the top-growing extended cloud service with a 75 percent increase over 2017 (12 to 21 percent adoption). Container-as-a-service was the second highest growth rate at 36 percent (14 to 19 percent adoption). DBaaS SQL and DBaaS NoSQL were third and fourth (26 and 22 percent growth rates, respectively), but achieved this growth starting from a much larger base of use, with 35 and 23 percent adoption, respectively, in 2017.

As use of public cloud has grown, so has the amount of spend. Public cloud spend is quickly becoming a significant new line item in IT budgets, especially among larger companies. Among all respondents, 13 percent spend at least $6 million annually on public cloud while 30 percent are spending at least $1.2 million per year. Among enterprises the spend is even higher, with 26 percent exceeding $6 million per year and more than half (52 percent) above $1.2 million per year.

Enterprises are not only using a lot of public cloud, but also planning to rapidly grow public cloud spend. Twenty percent of enterprises will more than double their public cloud spend in 2018, while 71 percent will grow spend at least 20 percent.

SMBs generally have fewer workloads overall and, as a result, smaller cloud bills (half spend under $120 thousand per year). However, 13 percent of SMBs still exceed $1.2 million in annual spend.

In contrast, private cloud use will grow more slowly for all sizes of organization. Only 7 percent of each group (enterprises and SMBs) is planning to double its use in 2018. Fewer than half of enterprises (47 percent) and 35 percent of SMBs plan to grow private cloud use by more than 20 percent.

As companies adopt cloud-first strategies, they are increasingly creating a centralized cloud team or a Center of Excellence for cloud. These teams provide centralized controls, tools, and best practices to help accelerate the use of cloud while reducing costs and risk.

Overall, 44 percent of companies already have a central cloud team. Enterprises have an even stronger need for centralized governance within their larger organizations: 57 percent of enterprises already have a central cloud team with another 24 percent planning one.

In 2018 we see enterprise central IT taking a stronger cloud governance role in advising on which applications move to cloud (69 percent in 2018 vs. 63 percent in 2017), managing costs (64 percent in 2018 vs. 55 percent in 2017), setting policies (60 percent in 2018 vs. 58 percent in 2017), and brokering cloud services (60 percent in 2018 vs. 54 percent in 2017).

Even though managing cloud costs is a top challenge, cloud users underestimate the amount of wasted cloud spend. Respondents estimate 30 percent waste, while RightScale has measured actual waste at 35 percent.

With significant wasted cloud spend, organizations are focusing on gaining control of costs. Optimizing cloud costs is the top initiative for the second year in a row, increasing from 53 percent of respondents in 2017 to 58 percent in 2018.

Despite an increased focus on cloud cost management, only a minority of companies have begun to implement automated policies to optimize cloud costs, such as shutting down unused workloads or selecting lower-cost cloud or regions. This represents an opportunity for increased efficiency and increased savings, since manual policies are difficult to monitor and enforce.

Docker adoption increased to 49 percent from 35 percent last year (a growth rate of 40 percent). Kubernetes, a container orchestration tool that leverages Docker, saw the fastest growth, almost doubling to reach 27 percent adoption.

Many users also choose container-as-a-service offerings from the public cloud providers.

The AWS container service (ECS/EKS) followed close behind Docker with 44 percent adoption (26 percent growth rate). Azure Container Service adoption reached 20 percent due to a strong growth of 82 percent, and Google Container Engine also grew strongly (75 percent) to reach adoption of 14 percent.

As part of adopting DevOps processes, companies often choose to implement configuration management tools that allow them to standardize and automate deployment and configuration of servers and applications. Among all respondents, Ansible and Chef are tied with 36 percent adoption each, followed by Puppet at 34 percent adoption.

Ansible showed the strongest growth since last year, up 71 percent in adoption. Chef grew 29 percent and Puppet grew 21 percent.

In 2018, AWS continues to lead in public cloud adoption, but other public clouds are growing more quickly. Azure especially is now nipping at the heels of AWS, especially in larger companies.

And 64 percent of respondents currently run applications in AWS, up from 57 percent in 2017 (12 percent growth rate).

Among enterprises, Azure did even better. Azure increased adoption significantly from 43 percent to 58 percent (35 percent growth rate) while AWS adoption in this group increased from 59 percent to 68 percent (15 percent growth rate). Among other cloud providers that were included in the survey last year, all saw increased adoption this year with Oracle growing fastest from 5 to 10 percent (100 percent growth rate), IBM Cloud from 10 to 15 percent (50 percent growth rate), and Google from 15 to 19 percent (27 percent growth rate).

Enterprise respondents with future projects (the combination of experimenting and planning to use) show the most interest in Google (41 percent).

In contrast to last years survey when we saw private cloud adoption flatten, the 2018 survey shows that adoption of private cloud increased across all providers.

Overall, VMware vSphere continues to lead with 50 percent adoption, up significantly from last year (42 percent). This includes respondents who view their vSphere environment as a private cloud whether or not it meets the accepted definition of cloud computing. OpenStack (24 percent), VMware vCloud Director (24 percent), Microsoft System Center (23 percent), and bare metal (22 percent) were all neck and neck. Azure Stack was in the sixth slot, but showed the highest percentage of respondents that were experimenting or planning to use the technology.

The cloud adoption numbers cited previously indicate the number of respondents that are running any workloads in a particular cloud. However, it is also important to look at the number of workloads or VMs that are running in each cloud. The following charts show the number of VMs being run across the top public and private clouds.

Among all respondents, 15 percent of respondents have more than 1,000+ VMs in vSphere as compared to 10 percent in AWS.

However, AWS leads in respondents with more than 50 VMs, (47 percent for AWS vs. 37 percent for VMware). In third position, Azure shows stronger growth, increasing respondents of more than 50 VMs from 21 to 29 percent.

While public cloud found its initial success in small forward-thinking organizations, over the past few years the battle has now shifted to larger enterprises. AWS has been moving quickly to address the needs of enterprises, and Microsoft has been working to bring its enterprise relationships to Azure. Google and IBM are also focusing on growing their infrastructure-as-a-service lines of business and continue to increase adoption.

The following public cloud scorecard provides a quick snapshot showing that AWS still maintains a lead among enterprises with the highest percentage adoption and largest VM footprint of the top public cloud providers. However, Azure is showing strength by growing much more quickly on already solid adoption numbers. IBM and Google are growing strongly as well but on a smaller base of users.

The 2018 State of the Cloud Survey shows that multi-cloud remains the preferred strategy. Almost every organization is using cloud at some level, with both public and private cloud adoption growing. On average, companies using or experimenting with nearly five public and private clouds with a majority of workloads now running in cloud.

However, public cloud is increasingly becoming the top focus among enterprises and, as a result, public cloud use is growing more quickly with the addition of new customers, an increase in workloads, and an increase in the number of services used.

This expansion in cloud use is driving public cloud spend higher, with large increases expected in 2018. Cost was the number one cloud challenge for intermediate and advanced cloud users. As a result, spend continues to be the top initiative for 2018 as even more organizations are turning their efforts to cost optimization efforts. There is still much room for improvement as 35 percent of cloud bills are wasted due to inefficiencies, and few organizations have yet implemented automated policies to help address these issues.

Enterprise central IT teams are taking a stronger role in cloud adoption, creating central cloud teams or a Center of Excellence. The role of these central teams is focused on cost management and governance as well as advising business units on workloads that should move to cloud. However, business units seek stronger autonomy, except in the area of cost optimization where they look to the central IT team for assistance.

The use of DevOps continues to increase, driving further adoption of container and configuration tools. Docker grew strongly again this year, and Kubernetes showed even stronger growth as a container orchestration solution. Many users are also adopting container-as-a-service offerings from AWS, Azure, and Google.

AWS still leads in public cloud adoption but Azure continues to grow more quickly and gains ground, especially with enterprise customers. Among enterprise cloud beginners, Azure is slightly ahead of AWS. Google maintains the third position, and VMware Cloud on AWS did well in its first year of availability. Adoption of Oracle Cloud is still small, but is growing well in the enterprise.

Cloud provider revenue is driven not just by adoption (percentage of companies using the cloud), but also the number of workloads (VMs) deployed, and the use of other extended cloud services.

Respondents continue to run more VMs in AWS than in other public clouds. However, Azure is growing quickly here as well to reduce AWSs lead.

VMware vSphere continues to lead as a private cloud option (both in adoption and number of VMs) followed by VMware vCloud Director. OpenStack is third, but Azure Pack (sixth place). stands out with the strongest interest level.

Download the RightScale 2018 State of the Cloud Report for the complete survey results.

Use of Charts and Data In This Report

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Cloud Computing Trends: 2018 State of the Cloud Survey