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May 31, 2017

Cloud-native app development proves its value but barriers hinder adoption

Capgemini suggests that those which don't adopt now will struggle to make up the ground lost to early adopters.

By James Nunns

A dramatic shift in the way enterprises are adopting cloud is happening, with more using cloud-native applications.

These cloud-native applications, which are apps and services that have been built to perform optimally in the cloud by leveraging Platform-as-a-Service (PaaS), are helping businesses to move faster.

According to new research from Capgemini, around 15% of new enterprise applications are cloud native today, a figure that is expected to hit 32% by 2020.

Read more: The great data myth: Is cloud really less secure than on-premise?

The reason for the shift is most often due to wanting to improve business agility (74%), increase collaboration with external partners (70%), and to deliver better customer experiences (67%).

Franck Greverie, Cloud and Cybersecurity Group Leader at Capgemini, said: “This is an exciting shift in our industry. We predict that cloud-native architectures will become the default option for customer-facing applications by 2020, driven by a need to continuously deploy innovations at an accelerated pace and enhance the customer experience. Businesses that delay adopting this approach will struggle to make up the gap with cloud-native competitors.

“Organizations need to listen to their CIOs and understand the huge potential of cloud-native technology to deliver business benefits and innovation. CIOs must also address culture and skills gaps within their own organizations on the road to being cloud-native leaders.” 

According to the research the shift to cloud-native applications is already benefiting some businesses. Capgemini found that a small group of ‘leader’ organisations, with more than 20% of their new enterprise apps developed in this way, were twice as likely to report increases in organisational revenues attributable to cloud-native apps as slower adopters – 84% vs 44%.

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This leader group is also more likely to describe their approach to software as agile (69% vs 37%), deployment as automated (78% vs 46%), and DevOps teams as integrated (69% to 38%).

Although there is plenty of research to back up the value of cloud-native applications, and the increasing importance of IT when it comes to supporting business ambitions, there’s a whole host of barriers that CIOs are having to battle against.

Many are fighting against an ingrained culture that is opposed to cloud-native working (65%), a lack of skills (70%), and then more technical challenges such as integrating with legacy infrastructure (62%) and being locked in to vendor contracts (58%).

Read more: Oracle Cloud: Standing tall against AWS and Microsoft Azure

While challenges hinder the cloud-native efforts of some companies, there is progress being made across a number of industries. High-tech (26%) and manufacturing firms (29%) are leading the way while at the other end of the table are banking providers with just 11%.

Capgemini suggests that there should be a clear roadmap to the cloud which includes the move to cloud-native application development. This can improve IT’s reputation across the business and the CIOs.

With this in mind, the consultancy makes six recommendations for turning into cloud-native leaders. Along with looking at the app portfolio and identifying priorities for cloud-native development, it is also suggested that a roadmap should be demonstrated before starting small and scaling it up – which will also help to build a skilled team.

Organisations should also adapt the IT operating model to support both business agility and stability, whilst being pragmatic to selecting technologies and incubating a culture of innovation, collaboration, testing and learning.

The report is based off the responses of more than 900 senior professionals working in both IT and the wider business from across 11 countries in Europe, the America’s, and Australia.

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