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The Cloud Migration Survey: What will move, what will stay, and why?
The next few years will see a sizeable increase in the uptake of cloud services, but there are a number of reasons why enterprises are still resistant to the idea of placing their core, mission-critical IT systems out in the cloud. We surveyed 312 enterprise IT professionals in the UK, Europe and North America to find out why.
Cloud On The Rise
Enterprise adoption of cloud services is still fairly low in terms of their share of the overall IT estate. But the data suggests many, indeed most, plan on moving a greater portion of their IT systems over to the cloud over the next two years.
Currently, 61.6 per cent of the IT professionals we surveyed claim to have up to 30 per cent of their IT applications and platforms hosted in the cloud, and about 24 per cent claim to have between 30 and 70 per cent of their IT estates in the cloud. Just 10.33 per cent claim to have 70 per cent or more of their IT systems hosted in the cloud.
But when asked what proportion of their IT systems would be hosted in the cloud in the two years’ time, just under 40 per cent of respondents anticipate between 30 and 70 per cent – or nearly double the number who have roughly this proportion of their systems in the cloud today. The number of respondents who see 70 per cent or more of their IT systems and platforms moving to the cloud nearly trebled to 28 per cent.
Marketing, Collaboration, Productivity Apps The Easiest To Cloudify
Across the broad systems and platforms landscape it’s clear some of these applications, for a combination of reasons, make more sense to move to the cloud than others. Often, it’s simply a case of finding suitable cloud-based alternatives – software that can do the job as well as if not better than their on premise equivalents.
The data suggests marketing, collaboration and productivity applications are currently viewed as the easiest product segments in which organisations can find suitable cloud-based alternatives. We asked respondents to rank product/software segments on a scale of 1 to 7, with 7 being the most challenging, in terms of difficulty finding robust cloud-based solutions. Marketing applications were scored either 1 or 2 b y 46.32 per cent of respondents; 44.98 per cent of respondents gave collaboration platforms either 1 or 2 in terms of difficulty; and 38.67 respondents scored productivity applications like Google Apps and Microsoft Office 365 a 1 or 2.
On the other hand, applications that are traditionally bulkier or multi-tiered are seemingly viewed by the IT decision makers we polled as the most challenging in terms of finding suitable cloud-based alternatives. This is where enterprise resource planning (ERP) software really stood out. Nearly 29 per cent of respondents scored ERP platforms a 6 or 7, suggesting that it’s still quite challenging to move to cloud-based ERP offerings from incumbents like SAP or Oracle as much as it is to replace them with nimbler (and younger) cloud-based alternatives.
The other area where IT professionals seem to be struggling is in vertically specific application offerings—for instance, Internet of Things applications in manufacturing, or OSS / BSS for the
telecoms sector. Nearly 21 per cent of respondents ranked these a 6 or 7, implying that it’s still quite difficult to find cloud-based alternatives for niche applications specific to an industry vertical. This is to be anticipated to some extent, as there’s typically less competition among independent software vendors in highly specific product categories (for instance, shared IT infrastructure software for airports) and thus less of a drive to create cloud-based alternatives for those applications; in some cases, this would require significant re-architecting.
Which platforms will move?
We polled IT decision makers to see which of their platforms and systems would likely shift over to the cloud, which they already have running in the cloud and which, for whatever reason, they plan to keep on premise.
The survey results suggest that in terms of IT systems and platforms, enterprises have already largely migrated most of their low-hanging fruit over to the cloud – that is, applications that aren’t tightly integrated with other systems across the business, and where cloud-based alternatives are readily available.
About 35 per cent of respondents claimed to already be using cloud-based collaboration platforms, followed by marketing applications and productivity applications (both with 30 per cent respectively). It is also clear that enterprises are going to continue migrating these applications to the cloud for the foreseeable future, suggesting strong continued maturation in these product segments and increasing confidence among enterprises. 38 per cent of respondents said they plan to migrate their marketing applications to the cloud sometime over the next two years, ever so slightly ahead of the number of respondents (37.45) that plan to move their collaboration platforms.
About 36 per cent of respondents said they plan to move their productivity applications over sometime in the next two years, and 36.63 per cent plan to move their spend management software over the same period.
The results also point to some interesting trends in cloud migration that may see many cloud-based applications only continue their rapid rise within enterprises. About 37 per cent of respondents said they plan to move their application development environments over to the cloud, and 16.3 per cent already claim to be using cloud-based application development environments, or platform as a service.
This is an interesting segment because platform as a services can be extremely useful solutions for cloud-native application development in particular — and because thus far, the extent of the uptake of these has been vastly outstretched by the amount of hype that surrounds them.
The results of this survey, however, paint a slightly more nuanced picture. A slight majority (53.3 per cent) of respondents either already use some kind of platform as a service or plan to use these within the next two years, compared to 46.7 per cent that claim to have no plans to search for cloud-based alternatives. Thus, it would seem the next two years will likely see (a) the platform as a service market finally come into its own after years of vendor hype, and (b) the proliferation of a plethora of home-grown cloud-based applications and application templates—to the benefit of other organisations using these services.
There also seems to be an increased trend towards using cloud-based analytics platforms. About a quarter of respondents also claim to be using cloud-based analytics platforms instead of their on premise equivalents, and 36.2 per cent of respondents said they plan to migrate these platforms to the cloud sometime within the next two years.
This seems to be driven by two interrelated factors. A substantial amount (indeed in some cases a majority) of the data organisations today are gathering already come from social media, online registration forms, and the like—in other words, online information. And, a number of the lines of business making use of these platforms seem to be driving increased uptake of these services. When asked whether lines of businesses are driving more interest in cloud computing than 18 months ago about 82 per cent of respondents said yes; about 75 per cent of respondents said they believed lines of businesses outside IT, particularly marketing, sales and financing, in that order, have a stronger say in IT decision-making than ever before. So it’s no coincidence that marketing and analytics cloud applications have the most momentum in terms of applications which IT decision- makers plan to, or already use, cloud-based versions.
Why are some platforms kept on premise?
Deeply integrated applications are the ones enterprises are having the most difficulty migrating to the cloud, which is reflected in the survey results. A slight majority of respondents (53.1 per cent) said they had no plans to move their ERP platforms over to the cloud, and 51 per cent said they planned to keep their human capital management software on-premise, too. Indeed IT decision-makers have often struggled to find lighter- weight, cloud-based ERP and HCM system to replace older legacy versions; something highlighted by the results discussed earlier.
But one of the reasons why these cloud-based alternatives don’t live up to their on-premise equivalents is because interoperability with existing systems is a significant inhibitor to cloud adoption—not the least of which for deploy integrated applications like ERP suites. In fact, when we asked respondents to rank the top inhibitors or challenges to adoption from 1 to 7, with 7 being the most challenging or significant, nearly 45 per cent classed interoperability with existing systems a 6 or 7.
The only inhibitor or challenge more significant than interoperability with existing systems seems to be security. Close to 50 per cent of respondents ranked security a 6 or 7 in terms of its significance in putting organisations off future cloud adoption, which suggests that organisations continue to have the same concerns about placing core, mission-critical applications in the cloud.
Similarly, many of the organisations polled found data sovereignty and regulatory compliance to be strong inhibitors to future cloud adoption, with 40.68 per cent and 39.83 per cent scoring them a 6 or 7, respectively.
Interestingly, both cost and fear of vendor lock-in seem to be close behind security, data sovereignty and regulatory compliance, with 37 and 34 per cent scoring them a 6 or 7, respectively. The results suggest that, despite constant price cutting by cloud service providers over the past couple of years, many organisations still see cost as a significant barrier preventing future adoption of the services they offer. However, this is likely to decrease in significance as cloud service providers continue to race one another to the bottom on pricing.