Cloud And Gen AI: The Inextricable Connection

As global enterprises lay the foundation for generative artificial intelligence, access to critical services and emerging technologies unavailable on-premises are driving cloud adoption, according to a new report—Cloud Evolution: Mandate to Modernise—released by HCL Technologies Ltd.

Enterprises position the cloud as the core technology driving innovation and efficiency. Adopting cloud-native architectures and platform engineering is important for organisations aiming to build a future-proof IT landscape that supports innovation.

By refactoring applications and leveraging cloud-native disciplines and practices, businesses can potentially unlock agility, scalability, and resilience, according to the study, which was based on a survey of 500 senior business and technology leaders.

"Cloud is not just a technology investment; it is fundamental to how businesses modernise," said Siki Giunta, executive vice president and head of cloud native centre of excellence, HCLTech. “The convergence of cloud, Gen AI, and the acceleration provided by cloud-native practices is essential to how enterprises operate, enabling rapid decision-making, enhancing customer experiences, and driving competitive advantage,” Giunta added. 

While the industry is still in the early stages of maturity with regard to large language models and gen AI applications, data shows the strong appetite organisations have for customised enterprise solutions in this space. Almost all (98%) enterprises surveyed are exploring custom gen AI solutions on cloud and incorporating cloud-native practices to modernise applications.

Additionally, 55% of the enterprises said that data for custom gen AI solutions resides on-premises, leading organisations to initially run some solutions on-premise and scale to cloud over time.

Organisations have increasingly embraced multicloud—or partnering with multiple public cloud providers for their cloud infrastructure needs. Enterprises today are 2.2 times more likely to have a deliberate multicloud strategy than three years ago.

Around 87% of enterprises are now utilising more than one cloud provider, with an average of three providers forming the backbone of their multicloud strategies. This reflects a growing recognition of the importance of flexibility and redundancy in cloud infrastructure. Also, 85% of enterprises reported that within the next year, they will definitely or likely collaborate with additional cloud providers beyond their current engagements.

Despite the growing adoption of public cloud computing technologies, 81% of the enterprises acknowledged that they would maintain a significant on-premises infrastructure due to data security and regulatory needs. This highlights the importance of a hybrid cloud strategy.

Survey participants agreed that modernisation of applications during and after migration adds business value. Around 80% of enterprises said the value of public cloud can only be fully realised if applications are modernised when they are migrated (vs. just lifting and shifting them).

Of the enterprises surveyed, 73% actively refactored applications during cloud migration, signalling a strong shift towards cloud-native modernisation, and 78% agreed that cloud-native approaches drive improvements.