Cloud use is ubiquitous, well almost. The majority of companies are using the cloud, but the technology isn’t being used for everything and some applications are much more likely to be in the cloud than others.
Customer support applications are much more likely (68%) to be moved to the cloud in the next two years than distribution apps (38%), while finance apps (55%), are more likely to move than sales and marketing (40%) and application development and testing (39%). According to IBM Institute for Business Value analysis.
What this shows is that businesses are being highly selective over what applications they are happy to move to the cloud. Realistically this is a sensible decision and suggests that businesses have a plan of action that will see apps move to the cloud if it is suitable and not just for the sake of it.
The success of a cloud initiative is often based upon how fully integrated they are into the business, this is highlighted by research from IBM which revealed that 78% of respondents say their cloud initiatives are coordinated or fully integrated, this is up from 34% in 2012. Among high performing organisations this number climbs to 83%, however, nearly half of workloads (45%) are expected to remain on-premises with dedicated servers.
The study, “Tailoring hybrid cloud: Designing the right mix for innovation, efficiency and growth”, found several benefits to using cloud:
- Companies undertaking cloud initiatives are able to expand into new industries – 76%
- Are able to create new revenue sources – 71%
- Can support new business models – 69%
The top reasons for using the cloud in the first place are the typical reasons that are often given:
- Lowering total cost of ownership – 54%
- Facilitating innovation – 42%
- Enhancing operational efficiencies – 42%
- Enabling them to more readily meet customer expectations – 40%
Marie Wieck, IBM, said: "Enterprises are moving to the cloud, especially hybrid cloud, faster than anyone expected to support their digital transformation, drive business model innovation and fuel growth.
"As clients continue to reap the benefits of integrating their on-premises infrastructure with the cloud, we see them increasing their investments in new workloads on public clouds. Successful clients have integrated plans to place workloads where they fit best, and IBM's hybrid cloud strategy provides this on-ramp for flexibility and growth."
Despite the obvious benefits that cloud offers there are the traditional challenges to adoption and some applications are less likely to be moved to the cloud than others.
Business strategy isn’t the only reason for not moving wholesale into the cloud as traditional cloud adoption challenges still remain:
- Security of compliance risks and requirements – 47%
- Cost structure: CapEx versus OpEx considerations – 41%
- Increased risk of operational disruption due to new cloud-based solution – 38%
Based on the findings of the study, IBM recommends three actions to help drive sustainable competitive advantage through cloud adoption.
Firstly it is necessary to have a deeper understanding of business implications and financial cases of cloud, then use the knowledge to steer future cloud initiatives. This means that it is necessary to make sure to combine insights from business and IT at each stage of cloud adoption.
Businesses should also strengthen their ability to manage the complexity of multiple cloud ecosystem partners, which IBM says will require a, “new mind set and new skills within an organisation.”
Finally, businesses should extend the limits of complying with security and regulation through new internal capabilities and external solutions. This will require the establishing of strict control policies internally and to verify that providers will adhere to the same standards an organisation would impose on-premises.
Businesses should also be, “instilling discipline” in order to help avoid human risk.
The study is based on in-person interviews and surveys of more than 1,000 C-suite executives from 18 industries.