In March 2017, Quest International Users Group commissioned Forrester Consulting to conduct a study of 100 organizations that run core business applications in a hybrid cloud environment, ones whom are highly satisfied with the value they receive. The survey explored skills and strategies critical to success when running business applications in hybrid cloud, as well as challenges yet to be overcome. In this survey, the top five industries were industrial manufacturing, high technology, financial services, manufacturing supply chain and engineering and construction.

The companies surveyed are currently run in a hybrid cloud today, with expectations to move even more of their core business applications to the cloud within the next three years. This trend of moving away from on-premises in favor of public cloud and SaaS deployments is expected to gain strength over the next few years. Currently, on-premise deployments comprise just under one-third of the core business application portfolio. The bulk lives in the cloud in the form of traditional licenses running on public cloud platforms, SaaS and external private cloud. In three years, on-premises deployment’s share of the hybrid portfolio will shrink further to just over a quarter. Core business applications will be found on the public cloud platforms and SaaS. External private cloud’s share will stay where it is today.

Application deployment strategy is fast evolving. Although the overall business application portfolio will move steadily to the cloud, deployment strategy is forming differently, depending on the category of application. Today, financial management applications are run on public cloud platforms in 66% of firms. In two years, the public cloud’s share of these applications will fall to 42%. Meanwhile, governance, risk and compliance will see the greatest percent increase ( 9%) of any application now run on the public cloud. The number of firms running financial management systems as SaaS will increase over 20% in two years.

Privacy, compliance and security dominate the list of challenges for firms running a hybrid cloud environment, but data integration and skill challenges also pose a threat. Forrester’s survey found that privacy and compliance issues and security concerns are the biggest challenges for almost half of firms, while data integration requirements challenge over one-third of firms. It is important to note that skills availability poses the major challenge for 31%, as firms, for example, work to staff and maintain integrations. Forrester Consulting maintains that challenges can be mitigated by better strategy and planning upfront.

Although companies can leverage certain skill sets using current internal resources, they recognize that the massive new skills demand requires a three-pronged approach that incorporates partners to achieve the greatest hybrid cloud return on investment(ROI). Forrester found that most firms feel most comfortable leveraging internal resources for security and business analysis skillsets and, to a lesser extent, architecture design and business process design. However, firms are expanding existing skills gap initiatives to achieve the best ROI in a hybrid cloud environment. For example, the survey found 38% of firms are working with services partners or contractors who bring skills which the firm is lacking, 37% are training their internal technology staff on new skills and 33% are hiring new employees to bring in new skills the firm is lacking.

When done correctly, the hybrid cloud approach is not focused on cost savings. Though cost savings may be there, the real win is the impact to the business—especially the greater flexibility created to better adapt to changing customer needs and market conditions. Increased flexibility (52%), greater business agility (48%), increased security (47%) and better scalability (47%) are the top four cited benefits of hybrid cloud versus traditional on-premises deployments. Cost efficiency—often a top reason for moving to the cloud—is outweighed, but still considerable at 44%. Technical concerns are addressed with hybrid cloud as well. Firms report increased performance (43%) and availability (42%) over traditional on-premises.

Companies find the greatest ROI from prioritizing the areas to invest in new along with empowering the business to take more control of their technology. The Forrester survey revealed firms plan to invest in security, business process and business analyst skills through either training, additional hiring or a combination of both. In addition to skills, firms plan to give more decision power over to the business and increase budget available for new technology. For example, 77% of firms currently seek to empower the business to take on more responsibility for their core applications.

Hear more about running core business applications in a hybrid cloud at COLLABORATE 18, April 22 – 26, 2018. Register before March 8 to save up to 40%. Stay up to date with the latest conference new by following @QuestUserGroup on Twitter and look for the official COLLABORATE 18 hashtag, #C18LV!