Kyndryl releases its 2025 Cloud Readiness Report: Key Takeaways for Businesses

Kyndryl's 2025 Cloud Readiness Report, based on insights from 3,700 senior leaders across 21 countries, highlights a pivotal shift in enterprise cloud strategy, moving from accidental adoption to deliberate design driven by the demands of AI, security, and complex regulatory environments.

The central theme is that the Hybrid Cloud Model is no longer a stopgap but the essential foundation for successful AI adoption and compliance in the modern enterprise.

The cloud strategy paradox: Accidental adoption

A staggering 70% of CEOs admit that they arrived at their current cloud environment "by accident, rather than by design." This reactive, fragmented approach has led to mounting complexity and technical debt, even as organizations continue to increase cloud spending by over 30% on average over the past year.

This lack of strategy creates barriers to scaling innovation, managing costs, and securely integrating new technologies like AI.

Data from the Kyndryl Bridge platform shows that 25% of mission-critical infrastructure (networks, storage, servers) is running on end-of-service, creating significant security vulnerabilities and hindering modernization.

AI is the ultimate driver for deliberate design

The pursuit of AI value is forcing businesses to finally rationalize their fragmented cloud environments. AI demands seamless data access and strict governance, which requires an intentional architecture.

AI Dependency: 89% of leaders say cloud investments have made it easier to use AI. However, 35% cite integration challenges as a top barrier to realizing positive ROI from AI investments.

The Hybrid AI Model: Organizations are increasingly adopting a hybrid approach for:

• AI Training: Using public cloud for the scale and computational power needed to train large models.

• Inference/Deployment: Running the trained models in private environments (on-premises or private cloud) to ensure governance, security, and proximity to sensitive data.

Sovereignty and security are reshaping the cloud map

Geopolitical uncertainty and evolving data regulations are directly influencing where and how enterprises store and process data, pushing the hybrid/multi-cloud model to the forefront.

• Geopolitical concerns: 75% of leaders express concern about the geopolitical risks of storing and managing data in global cloud environments.

• Regulatory compliance: 65% of organizations have already modified their cloud strategies in response to new data sovereignty regulations.

• The repatriation trend: 41% of leaders are repatriating at least some data from public cloud back to on-premises environments, or to regional cloud providers, to gain more control over data location and meet compliance demands.

• Cybersecurity focus: 82% of organizations experienced a cyber-related outage this year, making security a top priority. 75% are investing in AI for cybersecurity, making it the most popular AI capability investment.

What businesses need to do now

Stop accidental sprawl: Treat cloud adoption not as an infrastructure project, but as a strategic business capability. Align your IT architecture, governance, and data strategy with your core business outcomes.

• Embrace hybrid by design: Recognize that 84% of leaders intentionally use multiple clouds. Design an interoperable hybrid architecture that balances the cost-efficiency and scale of the public cloud with the control and compliance of private infrastructure.

• Prioritize workforce readiness: The report notes that cultural and talent readiness remains a huge gap. Organizations that foster a culture of adaptability are significantly more likely to achieve positive ROI from AI and scale innovation.