Kyndryl has released its 2025 Cloud Readiness Report, highlighting a critical juncture in enterprise cloud strategy. The report reveals that while cloud spending has increased by over 30% on average, a significant 70% of CEOs admit their current cloud environment was arrived at "by accident, rather than by design." This lack of intentionality is becoming a major liability as organizations face the converging pressures of AI adoption, escalating security threats, and stringent new data sovereignty regulations.
Quick Intel
70% of CEOs say their cloud environment was built by accident, not by design.
Cloud spending has increased by over 30% on average in the past year.
84% of enterprises intentionally use a multi-cloud or hybrid cloud model.
75% of leaders are concerned about geopolitical risks to their cloud data.
AI adoption is hindered by integration challenges, cited by 35% of leaders.
Hybrid cloud is emerging as the key differentiator for secure, scalable AI.
The findings confirm that hybrid and multi-cloud architectures are now the standard, with 84% of leaders intentionally leveraging multiple clouds. Furthermore, 41% are actively repatriating some data to on-premises environments, signaling a strategic rebalancing of control, performance, and compliance. This deliberate approach to architecture is no longer optional; it is the foundation for interoperability and agility, which are critical for integrating AI and adapting to new regulations.
While 89% of leaders agree that cloud investments have facilitated AI adoption, 35% identify integration as the top barrier to achieving ROI. This disconnect underscores that AI's potential is gated by cloud readiness. Enterprises are increasingly turning to specialized infrastructure like private AI or "neoclouds" optimized for GPU workloads to balance computational power with cost control and data governance, making deliberate cloud design a prerequisite for AI success.
In an era where 82% of organizations experienced a cyber-related outage, security and data sovereignty are fundamentally reshaping cloud strategy. Seventy-five percent of leaders express concern about geopolitical risks associated with global cloud environments, and 65% have already modified their strategies in response to new sovereignty laws. In response, 91% state their cloud infrastructure provides the flexibility to adapt to new regulations, and 75% are investing in AI for cybersecurity more than any other AI capability.
The era of accidental cloud adoption is over. The Kyndryl report makes it clear that future competitiveness depends on a deliberate, strategic approach to cloud architecture. Organizations that design their cloud environments with principles of interoperability, trust, and agility will be the ones to successfully integrate AI at scale, meet evolving regulatory demands, and turn their cloud infrastructure from a cost center into a engine for continuous innovation.
About Kyndryl
Kyndryl (NYSE: KD) is a leading provider of mission-critical enterprise technology services, offering advisory, implementation and managed service capabilities to thousands of customers in more than 60 countries. As the world's largest IT infrastructure services provider, the company designs, builds, manages and modernizes the complex information systems that the world depends on every day.
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