This week we’ll be showing you what assets companies are migrating to the cloud. As shown in the chart below, almost two-thirds of companies expect their disaster recovery systems to be cloud based in two years.
Click to enlarge
Government/education companies are significantly more likely to have disaster recovery in the cloud, both today and in two years.
Cloud-based supply chain systems are set to experience 41% growth. Smaller companies with revenues less than $500 million will lag in that area, with little more than 40% of companies expecting to have cloud-based supply chains by 2016.
As our survey results have shown, larger and more profitable companies are significantly more likely to have cloud-based assets today and expect to retain a comfortable lead.
Our survey findings have shown us what business functions are moving to the cloud, how companies are measuring cloud success, and how companies choose cloud vendors. But what specific assets are moving to the cloud?
The short answer is a lot, and that will only increase over the next two years. Development, storage, and management have experienced the strongest cloud migration so far, as you can see in the chart below. (Click to enlarge)
Smaller companies will be much less likely to use cloud for data warehousing and application development in two years, but will be more likely to have proprietary applications in the cloud by then.
Next week, we will explore more applications that are moving to the cloud, including disaster recovery, supply chain, sales and service, and core business functions.
Choosing a cloud vendor is one of the first steps in the migration to the cloud. We’ve looked at what companies expect from their cloud services providers, but what sets one apart from the rest of the pack? While price is an obvious point of differentiation, we found that companies with more mature cloud migration strategies have different priorities than their peers.
Which of these qualities differentiate a provider from others in your decisions regarding service providers? Rank the top three.
Price is much more of a concern for smaller companies—41% list it as their top priority versus 5% of the largest companies. Instead, large companies are much more likely to choose a provider based on brand reputation and portal capabilities.
We also identified a group that is further along the path to value than other survey respondents. Trailblazers, as we call these companies, are more likely to value pre-sales engineering that aligns a solution with business needs, as well as portal capabilities and additional services like network application and support. We will be exploring what sets Trailblazers apart in future posts.
We asked our 350 survey respondents what they expect and value from their cloud service providers (you can click on the chart below to enlarge it).
Please indicate your agreement with the following statements about cloud and managed services providers. (“Agree” and “Strongly Agree” responses)
As you can see, larger firms expect more from providers, like pre-sales technical consultations and tailored offerings.
Other key variances show a correlation between profitability and the vendor relationship:
- Companies with profit margins over 10% are also more likely to say their service providers add measurable value (72%, compared with 44% of firms with negative or flat profit margins).
- Companies with smaller profit margins are also significantly less likely to say their service provider adds measurable value to operating processes, works to tailor solutions to their needs, and to say those tailored offerings are a core value proposition for providers.
Despite encouraging numbers about cloud adoption and functionality, companies are running into issues when it comes to defining metrics such as KPI and ROI.
Please indicate your agreement with the following statements about the maturity of your company’s cloud and managed services strategy.
More profitable companies are more likely to have defined metrics—55% of higher-profit companies have defined metrics for ROI, as opposed to 33% of least-profitable companies.
A migration to the cloud is an increasing necessity in today’s world, but without a clear plan or metrics, you may get lost.
How do companies measure cloud success?
We’ve already seen the wide range of business functions that companies are moving to the cloud. But once that migration is complete, how are these companies quantifying cloud success? The 350 business and technology executives we surveyed cited a variety of metrics.
How do you quantify success in the cloud? Select all that apply.
We saw in another question that respondents see collaboration among business units as a major benefit to cloud adoption, both today (63%) and in two years (83%), yet collaboration is not described here as an important measure of success. While companies may be sophisticated in migrating business functions to the cloud, they may not have a fully mature view of the benefits and successes a cloud migration can bring.
In our last post, we explored the connections revealed by our national survey between company size and cloud adoption. Today, we’re examining what business functions companies are moving to the cloud. As you can see in the chart below, there are healthy levels of cloud adoption across many parts of the enterprise, with even more adoption on the horizon.
Q17. To what extent do the following business functions operate using cloud-based services now? Two years from now? (“Partially functional” and “Fully functional” responses)
The sales, purchasing, and finance functions will see the most growth, but only around half of companies will have migrated these functions to the cloud in two years. Meanwhile, nearly three-quarters of firms will have partially or fully functional engineering, operations, and management functions in the cloud by then (90% of larger companies expect their engineering/development and management/board functions to be in the cloud in two years).
Businesses are placing their bets on a variety of business functions in the cloud, and plan on sticking with it for a while.