CEOs admit majority of cloud environments were ‘built by accident rather than design’ – and it’s coming back to haunt them

The cloud is inescapable in 2025. It’s a $750 billion industry that underpins the vital applications, services, and platforms that power the digital economy.

Yet after more than a decade of enterprise migration and innovation in the cloud, analysis from IT infrastructure firm Kyndryl suggests many spent that time building sprawling, splintered architectures without a clear cut end goal in mind.

In the company’s annual Cloud Readiness Report 70% of CEOs admit they built their current cloud environment “by accident, rather than by design” – this often entailed periodic upgrades aimed at addressing short-term needs, rather than focusing on longer term strategic improvements.

Kyndryl said this shows that many lacked a “deliberate strategy” when pursuing cloud transformation projects, and the effects of this are starting to show with huge workload pressure placed on cloud environments, as well as growing security threats and evolving regulatory requirements.

“If companies benefitted from happenstance in the past, those days are over,” the report states. “Cloud success is no longer a matter of luck but design. The enterprises that thrive now are those that approach cloud as the foundation for intelligence, adaptability, and trust.”

AI is among one of the key factors bringing this lack of clear cut focus to light in 2025, according to Kyndryl. Organizations have increased cloud spending by 30% on average so far this year in a bid to supercharge AI adoption and build out infrastructure capacity to meet demand.

89% said these cloud investments have “made it easier to use AI” and have proved beneficial in underpinning adoption projects. Poorly designed, piecemeal cloud environments are hampering innovation on this front, however, the study added.

Indeed, 35% cited integration challenges as a top barrier to delivering a return on investment (ROI) with the technology.

Hybrid and multi-cloud in the spotlight

According to Kyndryl, hybrid and multi-cloud represent the light at the end of the tunnel for many enterprises locked in monolithic, rigid cloud setups.

Both these approaches have gained significant traction in recent years, the study found, with 84% of IT leaders revealing they now “intentionally use multiple clouds”.

Meanwhile, 41% are switching to a hybrid approach, repatriating data to on-premises environments while still hosting non-critical workloads on public cloud. This enables enterprises to balance control, compliance, and performance, the study noted.

“The gap between a reactive and deliberate cloud strategy has never been more consequential,” said Nicolas Sekkaki, global cloud practice leader at Kyndryl.

“With AI demanding seamless data access and governance requirements rapidly evolving, a hybrid cloud model is the differentiator that enables successful AI adoption,” he added.

AI-related considerations aren’t the only driving factor behind the shift to hybrid cloud, however. Kyndryl noted that geopolitical concerns and a concerted focus on data sovereignty, spurred on by regulatory requirements, are also influencing the trend.

75% of leaders said they were concerned about “the geopolitical risks associated with storing and managing data in global cloud environments”, for example, while 65% revealed they’ve “made changes to their cloud strategies” because of compliance concerns.

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