As companies migrate their IT to the cloud, a follow-up question often arises.

Should we be in more than one cloud?

The answer is frequently yes, cloud experts say. Advantages of being in clouds rather than a cloud include agility, risk management and cost — which happen to be rationales for moving to the cloud in the first place. So a multi-cloud strategy essentially amplifies the advantages of cloud.

But, industry isn’t there yet.

Multi-cloud is a high-level, incipient strategy, more conceptual than feasible for many firms currently, noted Ian Tivey, Associate Partner at IT advisory firm Citihub Consulting. “Most are struggling to even get the first one up and running,” Tivey said. “To think about a second one right now is three times the problem, not twice the problem.”

But once a firm is comfortably 10,000 feet up, multi-cloud offers distinct advantages, vendor leverage primary among them. “If you are fully coupled with one vendor, especially as you start using their APIs and then more proprietary services, it will be costly to move out of that arrangement,” Tivey told Markets Media. “At that point the vendor has more leverage over you than you would like.”

Then there are considerations pertaining to adverse events such as data breaches and operational failures. “If there is a massive cyber breach or something goes down, what is the blast radius of that?” Tivey said.

In a March blog post, Tivey highlighted the business case as one of 10 focus areas in financial services cloud for 2018. Another focus area for firms is portability and exit management, without which a multi-cloud strategy would not be possible.

Tech providers are building strategies to ‘containerize’ applications, partly to enable moving between clouds, Tivey said in the blog. “Topics receiving increasing attention, particularly where the business case for public cloud is being built around cloud providers’ proprietary services, are lock-in, exit management and portability,” he said.    

Options Open

“You can put your code into a cloud provider, but you may not want to be tied into that cloud provider permanently,” said Bill Fenick, Vice President Enterprise at Interxion, a provider of co-location and data-center services. “If at some point you want to shift that workload, you’ll need to be able to pick up and migrate to another cloud provider.”​

In short, a multi-cloud strategy provides agility by enabling a firm to procure different benefits from different clouds; risk management by diversifying and reducing exposure to an outage or data breach; and a cost advantage by preserving pricing leverage with cloud providers. “Multi-cloud allows you to keep your options open, so to speak,” Fenick said.

Amazon Web Services and Microsoft Azure are the two largest public cloud providers, followed by Google, IBM, and Oracle. Of companies that are in the cloud, 68% have at least some applications in AWS and 58% are in Azure, according to cloud-management provider RightScale.

To be sure, multi-cloud is not all upside; or as the late great economist Milton Friedman said, there’s no such thing as a free lunch. For all its potential advantages, migrating to more than one cloud brings complexity, which can be especially vexing given that some firms aren’t entirely comfortable with cloud computing to begin with.

Just 9% of European organizations are multi-cloud ready, while 81% are moving toward being so, according to an IDC survey conducted earlier this year. “Virtually all European enterprises will soon use multiple cloud services,” IDC stated in a May release.

As a prudent portfolio is one with securities diversified across asset classes, so might a prudent cloud portfolio be considered one that doesn’t have all eggs in one basket. Financial market participants and observers expect regulators such as the U.K.’s Financial Conduct Authority and the U.S. Securities and Exchange Commission to follow this issue as cloud adoption ramps up.

“As regulators start to see more usage of these big cloud providers, they’re going to ask questions about how easy it is or how hard it is for banks to move workloads out of one provider and into an alternative,” said Tivey of Citihub.

Kip Compton, Senior Vice President at Cisco’s Cloud Platform and Solutions Group, said complexity of multi-cloud presents the need to manage differences in data domains, networking, security, and different management. But that is not insurmountable and more than offset by the advantages of multi-cloud.    

In a recent Cisco Live! Presentation, Compton said cloud users “are finding that by leveraging the capabilities in multiple clouds, they get more innovation, more tools, (and) they can place applications where they run best and where they’re easiest to develop.”