From cost control to AI optimization: Why hybrid cloud matters

The conversation around cloud strategy is evolving fast, and financial leaders can no longer afford to think of cloud adoption as merely an IT concern.

Fresh from Finovate Europe 2025, the panel discussion on ‘Trends, Challenges, and Strategic Imperatives – Is Hybrid Cloud the Way Forward for Business Leaders?’ brought to light why hybrid cloud is cementing itself as the preferred model for enterprises balancing agility, cost control, and regulatory compliance.

The Shift Towards Hybrid Cloud

For years, companies have been told that the future is fully public cloud. Yet, as Waheed Mahmood, Financial Services Lead at Rackspace, pointed out, the reality is more complex: “One size does not fit all.”

Surveying over 1,400 global tech leaders across 10 sectors, including financial services, Rackspace found that only 16% of organizations have fully integrated cloud into their overarching business strategy.

Hybrid cloud—where businesses blend public and private cloud environments based on their specific needs—is emerging as the pragmatic choice. According to the survey, 27% of businesses still rely on private cloud, 19% use public cloud, 17% are hybrid, and 16% operate in a multicloud environment.

The trendline is clear: in the next 18–24 months, hybrid and multicloud adoption will grow to nearly a quarter of the market.

Cloud Strategy Is a Business Imperative, Not Just IT

The days of cloud adoption being purely a CIO-level decision are over. Mahmood stressed that cloud transformation must align with leadership styles, operational processes, and workforce upskilling: “This is not just an IT project.”

The best cloud strategies are integrated into a company’s broader business objectives, enabling CFOs to weigh in on cost predictability and regulatory obligations.

For finance leaders, hybrid cloud offers an advantage that’s often overlooked: cost control. “CFOs want to know what their spend is going to be,” said Matt Armstrong, Solutions Director at Rackspace.

While public cloud models often come with unpredictable egress charges and growing consumption-based costs, hybrid models allow CFOs to maintain financial visibility, ensuring workloads reside in environments that optimize both performance and budget.

Data, AI, and Compliance: The CFO’s Cloud Playbook

Data sovereignty and compliance concerns are increasingly driving cloud decisions. “Some customers need to know where their data is located—down to the physical hard drives,” Armstrong explained. With stricter regulations on data residency, many financial institutions are turning to hybrid cloud to strike a balance between flexibility and control.

The conversation also touched on AI’s role in cloud strategy. With 84% of surveyed organizations embedding AI into their business models, Mahmood underscored the importance of cloud infrastructure in ensuring seamless AI deployment: “Cloud allows organizations to ensure that workloads are in place, optimizing automation, reducing inefficiencies, and hyper-personalizing user experiences.”

For AI to deliver on its promise, data must be stored and processed in the right locations—another argument in favor of a hybrid approach.

The Road Ahead: Key Considerations for CFOs

Hybrid cloud is no longer a stopgap—it’s the backbone of future-ready financial operations. According to the Rackspace survey, 52% of cloud leaders cited optimized performance and minimized latency as key advantages of hybrid models. Meanwhile, 69% of private cloud users valued improved reliability, and 50% of public cloud adopters emphasized strategic alignment.

As companies navigate this landscape, finance leaders must work closely with technology teams to ensure cloud adoption isn’t just about migrating workloads but about driving business value. “It’s not about buying technology—it’s about finding the right location for your workloads,” Armstrong emphasized.

The takeaway? Cloud strategy is no longer an either-or decision between public or private. The future is hybrid, and financial leaders who embrace this flexibility will be better positioned to drive efficiency, manage costs, and scale their businesses in an increasingly complex digital landscape.

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