With next-generation technologies like AI demanding agile, scalable infrastructure, organisations must balance preserving trusted systems and embracing hybrid cloud strategies for cost efficiency and innovation in public services amid rapid technological change

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The public cloud promised scalability, cost efficiency, speed, and accessibility of computing resources. These attributes have indeed revolutionised how organisations manage their IT infrastructure. However, as the UK public sector continues to navigate the “cloud-first” policy—which prioritises cloud services for new IT procurements—there are growing concerns that this approach may not fully align with public sector realities.

In an era where AI and next-generation technologies are rapidly reshaping the landscape, the public sector faces a pressing challenge: how to bridge the growing chasm between ageing legacy systems and the ambitious demands of modern innovation. These legacy technologies, often the backbone of critical public services, are increasingly showing their limitations in a world that demands agility, scalability, and seamless integration with cutting-edge solutions.

The question that looms large is not just how to preserve the stability of these essential systems, but how to modernise and harmonise them with emerging technologies. The answer may lie in the adoption of modern hybrid cloud strategies, which offer a path to retaining the reliability of legacy infrastructure while enabling the transformative potential of the public cloud where appropriate.

It is a delicate balance and to succeed, organisations must first determine what the right place for different workloads and data is.

Balancing Legacy Stability and Innovation

While legacy or multi-generational technology is often viewed negatively due to it being legacy in age and its perceived inflexibility, there’s a case to be made for the reliability and proven stability of these systems. Simply ‘lifting and shifting’ these systems into the public cloud in a bid to modernise is not always viable and whilst the risks and implications of not modernising is evident, it must be done with care and consideration.

Earlier this year, Gareth Davies, head of the National Audit Office, in a conversation with the Financial Times, claimed that at least £20 million could be saved through modernisation. Citing examples such as a computer system from the 1980s causing a scandal which led to more than £1 billion ($1.26 billion) of state pensions not being paid.

 It’s estimated that nearly 50% of public sector IT budgets in the UK are still dedicated to maintaining and operating legacy systems underscoring their continued importance. In the last 25 years, 11 cross-government digital strategies have launched all seeking to address the usability and efficiency of legacy systems demonstrating the need for a new approach to cloud adoption, transformation and innovation,

HPE advocates a ‘Consciously Hybrid’ strategy where the organisation intentionally aims to balance the ICT portfolio across public cloud, intelligent edge and on-premises in order to deliver an end-to-end service in the most effective way. This recognises that there is no ‘one size fits all’ solution. There is very little to be gained from ‘lifting and shifting’ a decades-old legacy system from on-premises to cloud, and conversely, new digital initiatives that can be implemented directly in public cloud need not be unnecessarily constrained by an operating model that was defined in the pre-cloud era.

Modern infrastructure innovation is bringing cloud capabilities and benefits to the edge or on-premises – such as consumption-based pricing, infrastructure automation and software-defined data centre features – while providing the security of dedicated hardware hosted in the customer’s premise or co-location facility. For those workloads that are not capable of being migrated to cloud, this addresses some of the constraints traditionally associated with on-premises hosting, such as fixed costs, over-provisioning, poor patch compliance and a lack of agility and responsiveness to change.

Perceived public cloud benefits vs the right workloads in the right place for the right reasons

We at HPE take the position that cloud is a set of capabilities, not a location. Adopting a conscious and considered hybrid approach allows organisations to fully leverage the benefits of both public and private clouds while maintaining control over their IT environment.

A misconception when it comes to the public cloud is scalability, or more so, the idea that scalability is required and optimal for all workloads and data. With public cloud, organisations can adjust their IT resources according to demand without significant capital expenditure on physical infrastructure. This flexibility can be crucial in responding to fluctuating public service needs. However, this elasticity often comes at a significant premium. To manage costs, some organisations reserve resources in advance, locking them into a fixed level of capacity.

While this may lower costs, it also reduces the ability to scale down, leading to potential inefficiencies and wasted expenditure. According to Flexera’s research, 27% of cloud spend is waste. With 90%[2] of organisations citing that public cloud costs are rising, 35%[3] of which state the rise is beyond their expectations, the need to review overspend and inefficiencies is becoming increasingly necessary.

Yet effective cost management in the public cloud remains a significant challenge. The pay-as-you-go model is attractive for eliminating large upfront investments, but accurately predicting resource needs can be difficult. This often results in either overspending or underutilisation of reserved capacity. Costs can quickly spiral out of control due to a variety of factors, not least the freedom to spin up resources at will, complex bills that are difficult to understand and hidden charges.

To manage the growing ecosystem of public and private clouds, organisations need tools to observe, optimise and orchestrate their workloads and data.

Tools such as HPE OpsRamp streamlines IT operations with a unified approach to managing diverse IT environments. Featuring AI-driven observability, it provides visibility and control across hybrid cloud environments. OpsRamp helps in monitoring and managing workloads, providing insights that help optimise resource utilisation and reduce unnecessary spend.

Couple this with a hybrid cloud model, and a more cost-effective way to manage expenditures is achieved. By maintaining the stability of legacy infrastructure, routine operations and data storage on-premises or in a private cloud, where costs are typically lower, and only expanding to public clouds for compute-intensive tasks as necessary, organisations can optimise resource usage.

Data sovereignty – sovereign jurisdiction should be your choice

Another consideration when it comes to where workloads should exist is sovereignty.

Data sovereignty—the principle that data is subject to the laws and governance structures within the nation it is collected—is a critical concern for public sector entities. This issue is particularly acute in the UK, where government departments manage sensitive data related to national security, public safety, and citizen welfare. The movement of this data across international borders, potentially subjecting it to foreign laws and jurisdictions, can lead to compliance challenges and increased vulnerability to surveillance by foreign entities.

The UK government’s Cloud First policy encourages public sector organisations to adopt cloud services where possible. However, this policy also underscores the need for these bodies to ensure data security and compliance with UK data protection laws, including the Data Protection Act 2018, which incorporates the General Data Protection Regulation (GDPR). These regulations mandate stringent controls on data handling, including the location of data storage and the legal jurisdictions under which it falls.

Hybrid cloud means your data can remain in a data centre within the sovereign jurisdiction of your choosing yet still contribute to your organisation’s objectives and transformation projects.

The promise and potential of AI

When it comes to cloud strategies, there has never been a more important time to take a step back, take stock of current challenges and embark on a considered, cloud appropriate approach.

Artificial Intelligence (AI) holds significant promise for public sector organisations, offering the potential to enhance service delivery, streamline operations, and make data-driven decisions. However, to fully harness the benefits of AI, robust and flexible IT infrastructure is essential.

A consciously hybrid or hybrid by design approach to cloud adoption supports this AI potential by ensuring that the right workloads are placed in the appropriate environment. With data the lifeblood of AI, a hybrid approach enables data to be available anywhere and everywhere. There’s no need to consolidate data in a single data centre or fully transition to a hyperscale public cloud. Instead, data can be kept at  the edge and be seamlessly integrated into a hybrid cloud architecture. This setup enables AI models to effectively access and use the data as soon as it enters production, allowing data to be readily available to the teams that need it.

This approach supports public sector organisations in innovating with AI by providing the versatile, scalable infrastructure needed to deploy Al solutions that can adapt and evolve in line with strategic business needs. It enables organisations to manage data effectively, ensuring governance and minimising bias while offering the computational power necessary to process large datasets swiftly.

Moving forward: A hybrid approach

As a leader in developing hybrid cloud strategies, HPE is committed to providing tailored solutions that address the specific requirements of public sector bodies. Our approach focuses on helping organisations place the right workloads in the right environments, whether that means utilising public, private, or on-premises infrastructure, ensuring optimal performance, security, and cost efficiency. HPE supports in modernising even the most complex technology estates, ensuring the stability of legacy technology whilst providing an ecosystem to embrace next-generation technology.

Through our comprehensive range of services and workshops, we work closely with public sector organisations to shift mindsets towards a more strategic, workload-centric approach. It’s time to optimise and orchestrate your data and workloads to modernise and innovate to improve citizen outcomes and services.

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[1] Flexera report https://info.flexera.com/CM-REPORT-State-of-the-Cloud-2024-Thanks?revisit

[2] HPE Alletra Storage research

[3]  HPE Alletra Storage research