**Business Leaders Emphasize the Importance of a Hybrid Cloud Strategy for Harnessing the Potential of Generative AI**

Summary: As organizations face mounting pressure to digitally transform, the advent of generative AI alongside imperatives such as sustainability, labor productivity, and security has become increasingly prominent. According to the “Cloud Transformation Report,” a global survey conducted by the IBM Institute for Business Value (IBV), numerous leading enterprises have identified a clear hybrid cloud strategy as the cornerstone of their digital transformation. This approach offers various advantages, including modernization, agility, security, sustainability, and the capability to leverage the potential of generative AI. The study delves into the critical factors influencing cloud transformation and their implications for businesses navigating the modernization journey.

In 2023, organizations encounter immense pressure to digitally evolve, driven by the rise of generative AI and imperatives such as sustainability, labor productivity, and security.

**Key Findings and Implications:##**

**Adopting Generative AI**
The surge in generative AI has captured the attention of business leaders, prompting inquiries about the ideal framework for accelerating and scaling impact. Significantly, the study reveals that 68% of adopters of hybrid cloud have implemented formal, organization-wide policies to guide their approach to generative AI. Furthermore, as generative AI precipitates a surge in data, a strategic hybrid cloud approach is essential. This facilitates enhanced reliability, performance, and agility by seamlessly connecting cloud and on-premises environments, thereby streamlining AI workflows.

**Addressing Security and Compliance**
Enterprises are confronted with concerns regarding the potential exposure of sensitive data in the realm of generative AI. Approximately 45% of cloud leaders express apprehensions about cybersecurity, privacy, and data confidentiality as the primary obstacle in implementing generative AI. Notably, highly regulated industries are diligently evaluating risks such as security when embracing this technology. While such industries may exhibit a lower rate of formal AI adoption, progress is evident, with a substantial percentage leveraging a formal approach to generative AI.

**Overcoming Skills Challenges**
The report underscores persisting barriers to widespread cloud adoption, with the skills gap posing a significant challenge. Globally, 58% of decision-makers emphasize the formidable nature of the cloud skills deficit. Notably, numerous organizations have introduced new roles to fulfill the demand for cloud skills, reflecting the magnitude of this deficiency in various industries.

**Putting Sustainability Initiatives in Focus**
Sustainability has surfaced as a pivotal component of broader business objectives, assuming heightened significance for technology investments across industries. However, the expanding scope of generative AI necessitates increased data processing for AI workloads, posing novel challenges for organizations in their pursuit of minimizing greenhouse gas emissions. Here, the cloud emerges as a valuable tool for tracking, managing, and reporting on sustainability goals, with an impressive 42% of global decision-makers affirming its use for deploying, tracking, and managing sustainability goals internally.

**Looking to the Future**
As more enterprises venture into their AI journeys, the necessity of establishing the right infrastructure and talents to support these initiatives becomes paramount. Organizations pivoting to an agile, secure data structure underpinned by a hybrid cloud architecture position themselves as frontrunners poised to thrive in the AI-driven landscape of the future.

The study was conducted in collaboration with Harris Poll, an independent research firm. For the full IBM Institute for Business Value findings, refer to the official report.

**FAQs**

1. **Why is a hybrid cloud strategy essential for organizations in their digital transformation journey?**
A hybrid cloud approach offers modernization, agility, security, and sustainability, in addition to unlocking the potential of generative AI, thereby serving as a crucial foundation for digital transformation.

2. **What are the primary concerns enterprises face in adopting generative AI?**
Enterprises are primarily concerned about cybersecurity, privacy, and data confidentiality, as well as the potential exposure of sensitive data, posing a significant obstacle in the implementation of generative AI.

3. **How are organizations addressing the skills gap in cloud adoption?**
To overcome the skills deficit in cloud adoption, many organizations have created new positions to fulfill the demand for cloud skills, reflecting the magnitude of this challenge.