Organizations worldwide are rethinking their cloud strategies, according to Rackspace Technology’s 2025 State of Cloud Report. Over 90% of 1,400 surveyed IT leaders plan to overhaul their approach in the next two years, shifting toward hybrid and multi-cloud environments for greater flexibility and resilience.

Nearly half of the respondents cited hybrid cloud as essential for IT operations. Additionally, 22% aim to fast-track its adoption, driven by a need to improve adaptability and operational efficiency. AI also plays a pivotal role, with 49% prioritizing efficiency gains and 45% focusing on better data analytics.

Private clouds remain a key focus for many companies. Two-thirds of respondents have considered moving some workloads back from public clouds. Their reasons include enhanced data security, better system integration, and cost savings. Encouragingly, 80% of those who adopted a hybrid approach said it resolved previous concerns.

Despite widespread cloud adoption, only 16% of organizations—called “Cloud Leaders”—have fully integrated cloud solutions into their strategies. These leaders are more likely to achieve success, with 62% reporting their cloud environments exceeded expectations compared to 37% of others.

AI integration continues to grow, with 84% of businesses aligning cloud and AI strategies. However, challenges persist. Forty percent cited a lack of skilled professionals, while 37% noted limited resources. Rackspace Vice President Ben Blanquera stressed the need for expertise in Kubernetes, serverless architectures, and cloud security to meet evolving demands.

Security remains a top priority, with 96% implementing data privacy policies and 42% using AI for advanced threat detection. As businesses explore new technologies like 5G and robotics, the findings highlight hybrid cloud and AI’s critical role in driving IT innovation.

With companies seeking smarter solutions, Rackspace’s report emphasizes the importance of flexible strategies to future-proof operations.