The debate is over. Cloud has moved past the early adoption phase as two-thirds of enterprises now use cloud technology, according to the most recent “Verizon State of the Market: Enterprise Cloud” report.
However, a new survey from Harvard Business Review Analytic Services, “Cloud: Driving a Faster, More Connected Business,” finds that organizations are shifting their focus. Broader adoption of cloud solutions is setting a new benchmark for business performance, creating a sense of urgency for companies to use cloud to unlock new opportunities and drive business transformation. The report, sponsored by Verizon Enterprise Solutions, surveyed 452 business and IT executives from around the world to gain insights into cloud adoption and its business value. I recently sat down with the author of the report, Angelia Herrin, to discuss how businesses can stay a step ahead of the competition by using cloud to drive growth and profitability.
As cloud increasingly becomes a standard part of a company’s IT infrastructure, how does its use drive competitive advantage?
Angelia Herrin: Eighty-four percent of respondents said their cloud usage has increased. As adoption grows and cloud matures, organizations need to identify more strategic ways to leverage cloud for business transformation, which is both an ongoing process and a pain point. Compared to a decade ago, businesses are in a constant state of adjustment and must continuously reinvent themselves to meet customer and market demands. While the early days of cloud created data silos, companies are now using it to collaborate and share data across the organization, creating transparency and a single view of data that aligns the organization so they can truly be customer centric.
In the past, IT departments have feared shadow IT. How has the relationship between IT and business units changed?
Angelia Herrin: Despite early fears that cloud would disenfranchise the IT organization, this has not been the case. Only 16 percent of respondents said they usually purchase cloud services without IT involvement. In contrast, 43 percent of cloud purchases are made by central IT with another 39 percent made together. IT oftentimes functions as the interface between customers and partners, elevating its role within the business. The majority of the respondents we spoke to were positive about the benefit of partnering with IT. For example, 80 percent said involving central IT in purchasing decisions has increased the security and reliability of their cloud efforts.
What are the key benefits of using the cloud?
Angelia Herrin: Forty percent of respondents credited cloud use for increased revenue and 36 percent said it increased their profit margins. But the value of cloud doesn’t come from cost savings, it comes from speed and operational improvements. While business agility has been a key driver of cloud adoption for the past few years, this year, respondents said collaboration was the number one benefit (72 percent). While the push to connect everyday devices remains in its infancy, the Internet of Things is already having a direct impact on the future of business. As data becomes the basis for business decisions, companies will increasingly rely on partnerships with other companies to innovate. With cloud, companies can establish a channel to share data not only internally, but externally at breakneck speeds and provide a single view of data.
What matters most when evaluating cloud providers?
Angelia Herrin: Security still tops the list of evaluation criteria for cloud vendors. Three in 10 respondents ranked security in their “top 3 qualities that matter most in a cloud provider” (followed by interoperability with IT systems — 26 percent). Also, cloud providers have addressed security concerns. In fact, most respondents who use cloud (73 percent) said security increased or stayed the same, whereas only 10 percent said it decreased.
Are there any challenges hindering cloud adoption?
Angelia Herrin: Despite the benefits, cloud still faces a perception problem. One IT executive said his CEO cited the Target breach for not migrating to the cloud despite the fact that the breach wasn’t via a cloud-based system. The cloud is no more or less secure than other models. If policies and procedures aren’t robust, data will be vulnerable wherever it’s hosted.