The Public Cloud Imperative for 2025 and Beyond

Public cloud continues to change the way organizations modernize and scale their technology footprint and business processes. The 2025 State of Cloud Report confirms that the case for adopting and scaling workloads in public cloud is stronger than ever. But the real cloud success story isn’t in the adoption rates. It’s in what sets cloud leaders apart. These are the 16% of organizations that have fully integrated cloud into their business strategy and aligned it with broader organizational objectives.

As you plan your next moves in cloud, you’ll need to ask yourself: Is your strategy driving measurable outcomes and business impact? The report data shows a clear divide between organizations that use public cloud with purpose, and those that move workloads with just a plan — only to face cost, governance and skills challenges later.

To build a cloud strategy that keeps up with business demands and fosters innovation, public cloud must play a central role. The question is how to do cloud right.

Why public cloud, and why now?

The momentum behind public cloud is undeniable. Our survey of 1,420 IT decision-makers worldwide shows that a combined 60% or respondents plan to increase adoption of public cloud platforms in the next 12-24 months:

• Accelerate multicloud and public cloud adoption: 36%
• Accelerate public cloud adoption: 24%
• No changes: 10%

The forces driving public cloud adoption

The reasons behind this momentum aren’t purely technical. They also reflect growing business demands. Public cloud adoption is accelerating because it helps organizations modernize infrastructure, scale efficiently and prepare for AI-driven innovation.

• AI integration: Incredibly, 84% of organizations are incorporating AI into their cloud strategy, and public cloud provides the scale, services and flexibility to support it.
• Agility and scalability: Public cloud helps you bring new ideas to market faster, adapt to changing conditions and expand globally without heavy infrastructure investments.
• Cost optimization: The pay-as-you-go model creates opportunities to align costs with usage, but it takes active management to avoid surprises.
• Security and compliance: Hyperscalers have made substantial investments in data security, privacy and regulatory compliance frameworks, making public cloud a viable option even for highly regulated industries.

The upside is significant, but it doesn’t come automatically. Success in public cloud starts with a workload-by-workload plan and continuous optimization, not just moving workloads to cloud and creating Data center 2.0.

Why AI makes public cloud even more valuable

AI is reshaping how organizations operate. In our survey, 84% of respondents said they’re already incorporating AI into their cloud strategies — and that number is expected to grow. Organizations advancing the fastest are applying AI in three main ways: to support strategic decision-making across the business, to optimize cloud performance and cost efficiency, and to enable specialized use cases like fraud detection, customer segmentation and predictive modeling:

• Strategic decision-making: 37%
• Cloud optimization: 27%
• Specialized use cases: 20%

Public cloud offers the flexibility and compute power that AI demands. Hyperscalers provide the advanced AI services, including machine learning platforms and pre-built models, that enable you to deploy AI solutions in an accelerated manner.

In addition to AI, leading organizations are also adopting:

• Cloud-enabled 5G services: 50%
• Cloud-native AI and machine learning services: 47%
• Autonomous cloud management platforms: 45%

These technologies will define cloud success in the future. A forward-looking cloud strategy incorporates these capabilities not as add-ons, but as foundational elements of  the ever-evolving cloud operating model.

Common cloud challenges, and how to stay ahead

The benefits of public cloud are clear, but realizing them requires focus. Many organizations still struggle with the complexity of managing modern cloud environments.

Our report ranks the top challenges organizations face in managing cloud environments, based on survey responses: services

• Data security and compliance concerns: 50%
• Budget constraints: 43%
• Integration with legacy systems: 39%
• Skills gaps within IT teams: 36%

The keys to overcoming public cloud challenges

Without a clear strategy,  an actionable plan to drive cloud success, and clearly defined success criteria, the risks of cloud adoption can quickly outweigh the rewards. To avoid cost overruns, security gaps and stalled progress, your organization should focus on these priorities:

• Establish a governance framework: Set clear policies for cloud spending, security and compliance to control costs and risks.
• Modernize integrations: Use cloud-native services, APIs and containers to bridge legacy systems and cloud environments.
• Close the skills gap: Invest in cloud training and certifications for your teams. Partners with proven patterns, landing zone expertise and security practices can also help accelerate your progress. In addition to new skills, maximizing the benefits of cloud requires a shift from project to product mindset across all levels of the organization.
• Make workload-aware decisions intentional: Evaluate each workload to determine the most suitable environment — whether public cloud, private cloud, hybrid or on-premises — to improve cost efficiency and performance.

By focusing on these fundamentals, you can move from fragmented cloud adoption to a cloud strategy that is scalable, secure and aligned with business outcomes. That’s what separates the leaders from the rest.

What public cloud leaders are doing differently

It’s easy to assume that moving workloads to public cloud will unlock all the benefits, but that’s not the reality for most organizations. What separates cloud leaders from the rest is how they prioritize and optimize workloads as core of their cloud strategy in alignment with business outcomes and not just focusing on infrastructure as part of their cloud strategy.

In our survey, the top reasons organizations move workloads to public cloud are:

• Improved reliability and availability: 50%
• Cost optimization and management: 47%
• Increased flexibility: 46%
• Enhanced data security: 43%

These benefits don’t just materialize. They result from deliberate workload-aware planning — assessing which applications are best suited for public cloud based on technical and operational requirements, compliance needs and performance goals.

Our research shows that organizations are prioritizing certain workloads as they move to cloud. The top focus areas include:

• Data analytics and business intelligence: 51%
• Financial and accounting systems: 47%
• Collaboration and productivity tools: 42%
• Customer relationship management (CRM): 38%
• Supply chain management: 33%

Organizations are also deciding whether to use one cloud provider or diversify across several. A single hyperscaler can simplify management, while multicloud strategies coupled with right organization maturity can reduce risk, improve flexibility and help you avoid vendor lock-in.

We also see multicloud strategies gaining ground:

• 36% of respondents plan to accelerate multicloud and public cloud adoption together
• 25% have chosen AWS as their primary hyperscaler, followed by Microsoft Azure (22%) and Google Cloud (20%)

If you’re expanding your cloud strategy to become multicloud, these decisions need to be weighed from organization maturity, financial, technical, and operational lens or else it will directly affect your ability to control costs, scale effectively and maintain governance.

Build your path forward to become a Cloud Leader

Public cloud success depends on more than migration. It requires alignment between your business goals, workload needs and leveraging cloud to enable innovation via emerging technologies like AI.

To get started, ask yourself:

• Which workloads belong in public cloud, and why?
• Do you have the governance and cost controls to sustain growth?
• Are your teams equipped with right skills and product mindset to improve business agility by leveraging cloud?
• How are you preparing for the AI-driven future of cloud?

If you don’t have clear answers, it may be time to revisit your strategy. A trusted advisor can help you move faster, avoid common missteps and build a strategic roadmap that’s aligned to your objectives. Hence, helping you manage data, strengthen security and advance your cloud modernization efforts using a single, comprehensive and integrated strategy.

The 2025 State of Cloud Report offers deeper insights on these trends and what cloud leaders are doing to thrive. Download the full report to explore the data and recommendations. Or contact Rackspace Technology to discuss how we can help you build or elevate your public cloud strategy designed for growth, resilience and innovation.

Download the 2025 State of Cloud Report →