Cloud’s Coming of Age
It is no longer a question of if organizations will adopt cloud in some way(s), but how. As the options continue to grow, cloud environments continue to evolve, and in some cases, grow more complex. Enterprise organizations (1,000+ employees) are further ahead with 77% having at least one application, or a portion of their computing infrastructure in the cloud, compared with 69% of SMBs (<1,000 employees), so what is next?
Cloud Investments Continue to Grow
The percent of IT budgets allocated to cloud computing has remained relatively consistent with 30% in this year’s study, compared with 28% in the 2016 study. As anticipated, enterprise organizations are investing more in cloud, but SMBs are looking to catch up with a large spending swing.
With “improving the speed of IT service delivery” as the #1 business goal driving investments in cloud computing, followed by “greater flexibility to react to changing market conditions” – which also equates to speed to adapt, change direction, etc. – cloud is being looked to as the solution for the need for speed within IT organizations. When we look at differences by company size, we see that SMBs are more focused on investing in cloud computing to enable business continuity (62%), than enterprise organizations (46%), which perhaps speaks to the fact that business continuity is baked into everything at this point for those enterprise organizations – they cannot afford any downtime because the financial impact at that scale is just too much.
As noted previously, the average percent of IT budget allocated to cloud computing is 30%. To understand spending patterns we examined the differences in goals and objectives by whether an organization spends more or less than that average. Those who spend more than the average allocation are significantly more focused on achieving greater flexibility to react to changing market conditions (76%) compared with those who spend under that average (57%). Conversely, those who spend under the average amount are more focused on leveraging cloud to reduce resource waste (38%) than those who spend more (28%).
Internal Pressure to Migrate to the Cloud
As cloud adoption continues to evolve, more than one-third of respondents (38%) shared that the IT department feels pressure to migrate 100% to the cloud. The pressure is coming from executive management (25%) and individual lines of business (21%). Overall, 8% say they feel pressure coming from both groups. Enterprise organizations are feeling that pressure more so than their SMB counterparts. Forty-four percent of enterprise organizations, compared with 31% of SMB organization, feel pressure from individual lines of business or executive management to migrate 100% to the cloud.
Again, looking at organizations who allocate more than the average amount (30%) of their IT budgets to cloud initiatives, they are feeling more pressure (49%) to migrate 100% to the cloud, than those that are spending less than the average (29%). This tells us that this pressure from individual lines of business or executive management is driving investment levels (or helping them internally to get the funding they need).
It might seem intuitive that the business goals or objectives driving cloud investments would differ depending on whether an organization felt pressure to migrate 100% to the cloud. However, this is not the case. The only significant difference was with “faster return on investment” where 29% of those who felt pressure to migrate 100% to the cloud place that among their top 5 objectives, compared with 21% of those who were not pressured for 100% cloud migration.
Understanding where an organization is in their cloud adoption, as well as the goals driving their investments, will allow cloud providers to partner more effectively with their customers. To get more insight into the IDG Cloud Study results so that you can partner more effectively, download the executive summary, or contact us for a research briefing on the right.