The FINANCIAL — Almost every company is using the cloud, but not for everything, finds a new IBM study. Seventy-eight percent of respondents say their cloud initiatives are coordinated or fully integrated, compared to just 34 percent in 2012. And, among high performing organizations, that number climbs to 83 percent. At the same time, nearly half of workloads — 45 percent — are expected to remain on-premises with dedicated servers.
“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,” said Marie Wieck, IBM. “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.”
The IBM study, “Tailoring hybrid cloud: Designing the right mix for innovation, efficiency and growth,” is based on in-person interviews and surveys of more than 1,000 C-suite executives from 18 industries. Conducted by the IBM Institute for Business Value (IBV), the study finds that the top reasons executives cite for adopting hybrid cloud solutions are: lowering total cost of ownership (54 percent), facilitating innovation (42 percent), enhancing operational efficiencies (42 percent) and enabling them to more readily meet customer expectations (40 percent).
Companies undertaking cloud initiatives found they allowed them to expand into new industries (76 percent), create new revenue sources (71 percent) and create, support new business models (69 percent).
IBM was recently named number one in hybrid cloud environments by leading independent technology market research firm Technology Business Research, Inc. (TBR). In TBR’s semiannual Cloud Customer Research survey of more than 1,800 enterprise respondents, IBM was identified as the global leader in hybrid environment adoption thanks to its large enterprise customer base, brand reputation and expertise in hybrid integration and IT transformation.
IBM leads in overall vendor adoption for hybrid cloud and in select hybrid cloud segments due to its expansive portfolio, as well as its services arm that assists customers in aligning, integrating and deploying IT resources in the cloud to meet their ongoing needs. Notable clients include 1-800 Flowers, Etihad Airways and Shop Direct.
Challenges … and Solutions
But the decision to move to the cloud must be made in a way that maximizes benefits and minimizes risk. Our study reveals that the top three challenges to cloud adoption as cited by respondents are perceived security or compliance risks and requirements (47 percent), cost structure: CapEx versus OpEx considerations (41 percent) and increased risk of operational disruption due to new cloud-based solution (38 percent).
Based on its findings, the IBM study recommends three actions to drive sustainable competitive advantage through cloud adoption:
Deepen understanding of business implications and financial cases of cloud, then use the knowledge to steer future cloud initiatives. During each stage of cloud adoption, make sure to combine insights from business and IT. A custom-made environment will be possible when there’s an understanding of what the business needs and how cloud capabilities can help.
Strengthen the ability to manage the complexity of multiple cloud ecosystem partners. Managing a dynamic and interdependent environment will require a new mind set and new skills within an organization.
Extend the limits of complying with security and regulation through new internal capabilities and external solutions. Establish strict control policies internally and verify that providers will adhere to the same standards an organization would impose on-premises. Instilling discipline will help avoid human risk, which is often the most uncontrollable.