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The State of I&O: Navigating Architectural Sprawl, Security Risks, and Budget Evolution
HyperFRAME Lens: State of Infrastructure and Operations - 1H 2026 highlights a pragmatic enterprise landscape where risk-averse technology procurement has created a gap between hybrid cloud strategy and workload deployment, forcing organizations to navigate intense multi-cloud sprawl, rising security anxieties, and tool fragmentation.
06/30/2026
Key Highlights
- Pragmatic, ROI-Driven Adoption: A 40% plurality of organizations act as conservative Mass Market Adopters, demanding verified business cases and clear financial metrics that slow down the deployment of experimental technologies and AI initiatives.
- The Hybrid-Strategy Execution Gap: While 55% of firms target a hybrid cloud strategy, only 23% of active workloads run in hybrid environments, resulting instead in fragmented multi-cloud architectures and intense management complexity across multiple vendors.
- Compute Resilience and Capital Realignment: Public cloud dominates data compute workloads at 47.5%, but legacy anchors remain strong with 52% of companies relying on mainframes, prompting a budget shift over the next two years to fund commercial software and extended virtualization infrastructure.
- Security and Data Defense Priorities: Security and compliance rank as the most severe deployment barriers, driving a major strategic pivot toward cyber-resilience features like immutable storage, rapid ransomware recovery, and dual-protection cloud backups.
- Operational Bottlenecks and Skill Gaps: Fragmented monitoring tools fuel severe alert fatigue for 25.5% of IT teams during outages, while a critical shortage of specialized staff holding dual expertise in AI development and regulatory compliance severely limits operational maturity.
The News
HyperFRAME Research recently released its second HyperFRAME Research Lens, an empirical look at how 520 global decision-makers are driving their Infrastructure and Operations (I&O) strategy balancing: sprawl, security, and the shifting compute mix in the AI era. The report focuses on the current state and future trajectory of enterprise I&O, highlighting how a pragmatic approach to technology adoption creates a gap between hybrid/multi-cloud strategies and actual workload deployments. It specifically analyzes how organizations are balancing architectural sprawl, cybersecurity risks, and budget reallocations across various environments, while navigating the challenges of tool fragmentation, mainframe integration, and specialized AI compliance talent. To explore the full Lens, visit https://hyperframeresearch.com/hyperframe-lens-research-2/
Topics: I&O, AI Infrastructure, Compute, Mainframe, Storage, Resilience, Observability, AI regulations
HyperFRAME View - Analyst Take
The HyperFRAME Research Lens for the second quarter of 2026 reveals an enterprise technology landscape defined by a strong emphasis on pragmatic, ROI-driven decision-making. Rather than rushing blindly into experimental technology cycles, a 40% plurality of surveyed organizations now actively operate as Mass Market Adopters. This conservative stance requires that any proposed expansion of the I&O stack be justified by validated business cases and clear financial metrics. This calculating procurement model directly influences how corporate environments are built, forcing a slower, more deliberate implementation phase even when high-level corporate strategies demand AI-driven digital transformation.
This pragmatic friction has created a stark execution gap between high-level architectural intentions and the operational realities on the ground. For instance, while 55% of organizations designate hybrid cloud as their overriding, long-term infrastructure strategy, only 23% of active workloads actually run in hybrid environments among those leveraging public or hybrid-public frameworks. Instead of a cleanly unified hybrid model, multi-cloud setups have emerged as the default operational baseline.
An overwhelming 79% of organizations outside of the strictly private cloud space now utilize two or more public cloud vendors to safeguard against single-vendor lock-in. However, this diversification often spirals into architectural sprawl, with 22% of all surveyed companies maintaining highly distributed footprints across four or more public cloud providers, layering intense management complexity onto IT teams.
Managing this distributed sprawl is severely hindered by persistent tool fragmentation and an inability to achieve true operational centralization. Nearly half of the market, 45% of surveyed organizations, cannot orchestrate their compute, storage, and network resources from a single console, relying instead on supplemental, stand-alone management utilities.
This lack of unity is further reflected in modern networking trends; while roughly 60% of enterprise environments have transitioned away from traditional on-premises setups toward modern alternatives such as Software-Defined Networking (35%) and Public Cloud networking (25%), the underlying control planes remain disconnected. This fragmentation actively fuels a distinct layer of management friction that complicates daily IT operations and limits the agility that distributed cloud ecosystems are supposed to provide.
To properly defend and maintain these increasingly intricate environments, enterprise financial allocations are on the verge of a significant structural shift. Currently, 52% of organizations maintain standard budget norms, dedicating between 10% and 29% of their total IT funds to infrastructure and operations software maintenance. However, over the next 12 to 24 months, a sharp invest up trend is projected, with the 30% to 39% budget allocation bracket expected to experience a major influx, rising from 15% to 25% of respondents.
This capital shift coincides with an aggressive migration away from custom-built, proprietary systems; while 49% of firms currently rely on in-house software as their primary deployment model, an identical 49% predict that Commercial off-the-Shelf (COTS) solutions will soon dominate their environments as companies prioritize vendor support and standardized integration.
The Evolution of the Compute Mix: Balancing Legacy Foundations, Cyber-Resilience, and Operational Bottlenecks
At the compute layer, the public cloud has firmly established its dominance by capturing a 47.5% share of all data compute workloads, yet the underlying architecture remains heavily anchored in legacy formats. Traditional Virtual Machines (VMs) continue to serve as the market baseline, accounting for 40% of all current workloads, followed by containers at 27.9%, bare metal at 15.1%, and serverless deployments at 12.2%. Far from phasing out virtualization, a clear 57% majority of enterprises plan to increase their spending on virtualization infrastructure over the next two years.
Furthermore, heavy iron mainframes remain foundational operational anchors rather than obsolete relics, with 52% of companies keeping them at the center of their compute strategy. Crucially, this legacy hardware is evolving; 63.4% of mainframe users agree that their current environment successfully delivers the necessary infrastructure and tooling to support modern enterprise AI strategies.
Even as compute strategies mature, security and compliance remain the most imposing barriers to successful infrastructure deployment and scaling. An overwhelming 72% of respondents identify security as a very significant challenge, and when forced to isolate their single most difficult hurdle, 31% select security and compliance—easily overshadowing operational complexity (18%) and legacy technology limitations (8%).
This anxiety is highly focused on external threats, with 56% of organizations reporting acute fears regarding external hacks and data breaches. These compounding security vulnerabilities leave IT leaders feeling exposed, resulting in a distinct confidence gap where only 30% of respondents feel very confident in their organization's ability to recover from a major cyber-attack or primary cloud provider outage with minimal downtime.
Consequently, this climate of heightened risk is fundamentally rewriting the strategic requirements for enterprise storage design and data resilience. Over the next 24 months, data security and governance will act as the primary force shaping storage planning for 62% of organizations, while 52% explicitly prioritize cyber-resilience capabilities such as immutable storage and rapid ransomware recovery.
This demand for airtight protection is also triggering a rapid decline in reliance on native-only backups for cloud software. Enterprises are aggressively pivoting toward a dual-protection framework that pairs native backups with immutable, off-site secondary copies, a strategy projected to become the dominant defense model for 41% of Microsoft 365 environments and 39% of ServiceNow deployments.
Finally, the report highlights an operational bottleneck where advanced observability goals and AI-driven operations are restricted by tool fragmentation and acute talent shortages. Centralized visibility remains incredibly rare, as 79% of firms suffer from monitoring tool fragmentation, including 46% that juggle two or three distinct visibility platforms; this direct lack of correlation causes severe alert fatigue and false positives, which 25.5% of IT teams name as their most disruptive pain point during active outages.
While interest in AIOps remains high to counter these issues, true operational maturity lags behind the hype, with only 21% having fully implemented AIOps for core functions. This maturity gap is ultimately bottlenecked by a severe compliance and talent shortage, where a 26% plurality of organizations name the inability to hire specialized staff who possess dual expertise in technical AI development and legal/regulatory compliance as their single greatest obstacle to securing a competitive technical advantage.
Looking Ahead
The HyperFRAME Research Lens provides critical baseline data that I&O decision-makers must consider to bridge the severe execution gap between high-level cloud strategies and actual workload deployments. With 40% of the market operating as risk-averse Mass Market Adopters, leaders need to shift from speculative tech cycles to producing validated business cases and proven ROI metrics to justify future stack expansions. Moreover, planning must account for the intricacies of architectural sprawl, as the report shows 22% of all organizations are currently juggling four or more public cloud vendors without unified management tools.
This distributed footprint heightens vulnerabilities, meaning I&O leaders must proactively design storage and networking around cyber-resilience to combat the acute external fears that leave only 30% of enterprises confident in their recovery capabilities. Additionally, upcoming budgetary shifts require forward-looking planning, as a projected influx into higher infrastructure software funding brackets means alignment with COTS solutions is essential for standardized vendor support. Overall, these findings underscore why organizations need to directly address tool fragmentation, decrease alert fatigue, and critical compliance talent bottlenecks that can impact an enterprise's competitive technical advantage.
Ron Westfall | VP and Practice Leader for Infrastructure and Networking
Ron Westfall is a prominent analyst figure in technology and business transformation. Recognized as a Top 20 Analyst by AR Insights and a Tech Target contributor, his insights are featured in major media such as CNBC, Schwab Network, and NMG Media.
His expertise covers transformative fields such as Hybrid Cloud, AI Networking, Security Infrastructure, Edge Cloud Computing, Wireline/Wireless Connectivity, and 5G-IoT. Ron bridges the gap between C-suite strategic goals and the practical needs of end users and partners, driving technology ROI for leading organizations.
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Don Gentile | Analyst-in-Residence -- Storage & Data Resiliency
Don Gentile brings three decades of experience turning complex enterprise technologies into clear, differentiated narratives that drive competitive relevance and market leadership. He has helped shape iconic infrastructure platforms including IBM z16 and z17 mainframes, HPE ProLiant servers, and HPE GreenLake — guiding strategies that connect technology innovation with customer needs and fast-moving market dynamics.
His current focus spans flash storage, storage area networking, hyperconverged infrastructure (HCI), software-defined storage (SDS), hybrid cloud storage, Ceph/open source, cyber resiliency, and emerging models for integrating AI workloads across storage and compute. By applying deep knowledge of infrastructure technologies with proven skills in positioning, content strategy, and thought leadership, Don helps vendors sharpen their story, differentiate their offerings, and achieve stronger competitive standing across business, media, and technical audiences.
Fred McClimans | Analyst In Residence
Fred McClimans is a strategic leader with over 30 years in market research, tech/equity analysis, and product/market development. In addition to founding and leading competitive intelligence firm Current Analysis (now GlobalData), his career spans analyst roles at The Futurum Group, Gartner, HfS Research, Samadhi Partners, and EY. Known for his actionable analysis and market foresight, Fred has also helped drive technology innovation and market strategy at firms such as Charter Communications, Newbridge Networks (now Nokia), and DTECH LABS (now Cubic Corporation). His expertise covers AI, technology policy, cybersecurity, and business/consumer behavior, as evidenced by his numerous media appearances and publications. Fred excels in guiding businesses through market disruptions with insightful strategy and research.
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Steven Dickens | CEO HyperFRAME Research
Regarded as a luminary at the intersection of technology and business transformation, Steven Dickens is the CEO and Principal Analyst at HyperFRAME Research.
Ranked consistently among the Top 10 Analysts by AR Insights and a contributor to Forbes, Steven's expert perspectives are sought after by tier one media outlets such as The Wall Street Journal and CNBC, and he is a regular on TV networks including the Schwab Network and Bloomberg.
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Stephanie Walter | Practice Leader - AI Stack
Stephanie Walter is a results-driven technology executive and analyst in residence with over 20 years leading innovation in Cloud, SaaS, Middleware, Data, and AI. She has guided product life cycles from concept to go-to-market in both senior roles at IBM and fractional executive capacities, blending engineering expertise with business strategy and market insights. From software engineering and architecture to executive product management, Stephanie has driven large-scale transformations, developed technical talent, and solved complex challenges across startup, growth-stage, and enterprise environments.
Stephen Sopko | Analyst-in-Residence – Semiconductors & Deep Tech
Stephen Sopko is an Analyst-in-Residence specializing in semiconductors and the deep technologies powering today’s innovation ecosystem. With decades of executive experience spanning Fortune 100, government, and startups, he provides actionable insights by connecting market trends and cutting-edge technologies to business outcomes.
Stephen’s expertise in analyzing the entire buyer’s journey, from technology acquisition to implementation, was refined during his tenure as co-founder and COO of Palisade Compliance, where he helped Fortune 500 clients optimize technology investments. His ability to identify opportunities at the intersection of semiconductors, emerging technologies, and enterprise needs makes him a sought-after advisor to stakeholders navigating complex decisions.