Techaisle’s US Enterprise Cloud survey conducted with senior IT decision makers shows that Cloud actually opens the doors to increased IT investment. For all the trepidation about the negative impact of cloud on IT budget and authority, data from the Techaisle US upper-midmarket/enterprise (1,000 employees to 10,000 employees) cloud survey indicates that advanced use of cloud actually drives higher IT spending. In 92% of US enterprises, IT has a voice on the board and helps drive the direction of the business rather than business deciding IT needs. There is also a great deal of near-term opportunity for a variety of SaaS providers in the US enterprise market: ten diverse application categories are included in near-term plans of 37%-41% of respondents.
Cloud adoption maturity & IT staffing impact
Survey data shows that cloud maturity does not correlate to reductions in IT staffing levels. The most and least mature cloud user segments have an average of 19.0 and 20.3 users per IT staff member, respectively. The two groups between the extremes have an average of 16.6 and 16.2 users per IT staff member. The roles may be different, but the survey data finds that absolute employment in IT shops does not decline with cloud use.
Only 18% of US enterprises have mature cloud adoption and are optimizing usages; 36% have a cautious approach to cloud. Smaller size large enterprises have reached maturity stage whereas larger sized enterprises have ad hoc approach to cloud. Data shows that maturity is also a function of understanding cloud benefits. Enterprises that are not committed to cloud view cloud as a cost/CAPEX strategy that has the additional benefit of enabling mobility and capabilities that are outside of IT’s delivery scope (or very far down the priority queue). Firms that are effectively using cloud point to agility and improved productivity (especially within IT) as key cloud benefits.
Shift to Public Cloud & multiple clouds
Large US firms are clearly hedging their bets in public cloud, with data showing that enterprises use an average of 2.6 of the four most prominent services (AWS, Azure, IBM SoftLayer & Google Cloud). At the same, 61% want seamless integration of cloud with on-premise systems and 20% of US enterprises use all three types of cloud deployment – private, public and hybrid but the future looks very different – getting firmly entrenched in a multiple-cloud environment.
According to US enterprise respondents, the top four drivers of public cloud adoption are agility, flexibility and elasticity, delivered via an on-demand investment model; multi-tenancy, which makes cloud a cost-effective option for enterprises; better and faster access to data and information, which results from the built-in backup, DR and IT management capabilities delivered by public cloud providers; and pay-per-use, which reduces upfront capital expenditure requirements.
Challenges associated with public cloud include a shortage of skills/talent (especially in the area of managing across multiple cloud-based delivery platforms), integration with existing systems (as a means of accommodating future growth), data security, maintaining integrity of data and processes, and regulatory compliance (including data sovereignty and tax implications).
Workloads transitioning to public cloud can be grouped into four categories: infrastructure, office applications, business services and industry vertical solutions. In each case, public cloud offers some specific benefits: it provides a resilient and secure platform for infrastructure (such as application servers or DR/BC/backup), an effective way of provisioning SaaS-based office applications like conferencing and collaboration, a flexible subscription model for business services like CRM, and a source of holistic, tailored offerings in vertical solution areas like ERP.
Enterprises in key industry segments such as financial services, automotive, e-commerce and manufacturing are proving out use cases for public cloud.
Security confidence yet cloud acceleration inhibitor
In 60% of enterprises data sovereignty and privacy are preventing acceleration of cloud and for 65% of US enterprises, security and regulatory compliance are the biggest challenges in developing strategies for cloud adoption. Enterprises consider the three essential security issues to be security framework visibility, data privacy and prevention, detection and reaction.
A relatively small majority of users believe that cloud providers do not understand the specific security needs of their businesses and that cloud usage creates higher risk of data breach. On the flip side, a stronger majority state that they have formal security protocols in place in case of a breach, that they are better prepared than other firms when it comes to IT security and that their IT security budget is sufficient to address threats. Despite these displays of confidence, nearly 70% of respondents are considering purchase of cyber insurance to protect their businesses.
Enterprises are actively combining internal and external security options. Two thirds of enterprises have internal (and growing) IT security teams, and another one-third are planning to add internal IT security staff, but this is not stopping them from working with external providers: nearly two-third use Security-as-a-Service and work with a managed service provider to address security needs. Only 46% are currently using cloud security software tools, but another 29% are planning to adopt these tools in the near future.