68% Organizations Globally have a Cloud Strategy: Study

BY Shriya Khanna
In
Aug 28, 2015
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Private cloud seems to be ahead of public cloud in terms of popularity

As many as 68% of organizations globally have some form of cloud strategy, finds a Cisco-commissioned study conducted by IDC. A whitepaper, Don't Get Left Behind: The Business Benefits of Achieving Greater Cloud Adoption, published by the research firm, says that cloud is moving into a second wave of adoption, with companies no longer focusing just on efficiency and reduced costs, but looking to cloud as a platform to fuel innovation, growth and disruption.

The study, based on IDC’s recent CloudView Survey of 3,463 executives at organizations that have adopted cloud, supplemented by a Cisco-sponsored business value extension to the CloudView Survey covering 2,378 respondents, finds that 53 percent of companies expect cloud to drive increased revenue over the next two years.

Interestingly, private cloud seems to be more popular among the organizations with 44% of respondents saying they are using it or planning to use it, as compared to 37% of respondents who have adopted or are planning to go for public cloud. “As we talk with customers interested in moving to the second wave of cloud, they are far more focused on private and hybrid cloud—Primarily because they realize that private and hybrid offer the security, performance, price, control and data protection organizations are looking for during their expanded efforts," said Nick Earle, Senior Vice President, Global Cloud and Managed Services Sales, Cisco

IDC identifies five levels of cloud maturity: ad hoc, opportunistic, repeatable, managed and optimized. The study found that organizations elevating cloud maturity from the ad hoc, the lowest level to optimized, the highest, results dramatic business benefits, including:

revenue growth of 10.4%
reduction of IT costs by 77%
shrinking time to provision IT services and applications by 99%
boosting IT department’s ability to meet SLAs by 72%
doubling IT department’s ability to invest in new projects to drive innovation.

The study found that 32% or close to half of the organizations with cloud strategy are in the lowest level, ad-hoc. In other words, 64% (32% ad-hoc level and 32% with no cloud strategy) have to cover quite a distance.

The study also quantified the economic benefits the most mature (that is the top three levels of maturity stages defined by IDC: Optimized, Managed and Repeatable) cloud organizations are realizing. Organizations studied are gaining an average of $1.6 million in additional revenue per application deployed on private or public cloud. They are also achieving $1.2 million in cost reduction per cloud-based application.

Interestingly, Latin America seems to be ahead of Europe Middle East & Africa (EMEA) and Asia Pacific, in terms of maturity of cloud strategy and adoption.

By industry, manufacturing has the largest percentage of companies in one of the top three adoption categories at 33 percent, followed by IT (30 percent), finance (29 percent), and healthcare (28 percent). The lowest adoption levels by industry were found to be government/education and professional services (at 22 percent each) and retail/wholesale (at 20 percent). By industry, professional services, technology, and transportation, communications, and utilities expected the greatest impact on key performance indicators (KPIs) across the board.

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