Firebrick’s Global Cloud Study, Part 1:

What we learned from more than 90 IT executives at some of the world’s largest companies.

If you were to believe the hype about Cloud, you would think that every company, especially larger organizations, is migrating to cloud technology with the fastest deliberate speed. But when we completed our global study of more than 90 IT executives at large multinational organizations, we learned that it’s not always the case. As you’ll see, there is Cloud hype and the reality of Cloud adoption.

The focus of the Firebrick study was to answer some key questions: What are IT buyers’ general attitudes about Cloud technology today? Where are they in their Cloud migration journeys? What are their biggest motivators and concerns in moving to the Cloud? And finally, what difficulties are buyers encountering which create barriers to Cloud migration? We discovered some compelling insights.

Methodology: Reaching the Most Influential Cloud Execs
During this multi-month study, which concluded in early 2015, we spoke with 93 senior level IT executives in focus group discussions and one-on-one interviews in the United States and Europe. There were 37 participants from the U.S, 29 from Germany, 17 from the UK, 4 from France, 3 from Italy and 3 from Spain. Every executive works at a multinational company with at least $1B in annual revenue if they were U.S. based, or $600M+ if based outside the US. We recruited only the most senior level IT executives for this qualitative study — CIOs or VPs/directors of Cloud. We also required that each participant have both a funded Cloud project at the time of the study and have direct decision-making authority over the projects. Finally, we sought a broad representation of industries, but focused primarily on Manufacturing, Energy, Financial Services, Healthcare and Government.

The Results: It’s All About Speed to Market, Data Security and Balancing Modern with Legacy
To be sure, some of the findings were not surprising for those of us following the Cloud phenomenon. For example, most companies (89%) will continue to increase their Cloud infrastructure spending over the next three years. Similarly, we weren’t shocked that nearly 100% of participants cited security as the most significant barrier to faster Cloud adoption. These are the foundational realities of the Cloud conversation, and need to be a central focus in positioning Cloud technology and how Cloud products are sold. But there were a number of other insights that were more surprising:

Increasing the speed of business — not cost-cutting — is the #1 motivator of Cloud adoption

• 69% of participants cited dramatically increasing the speed of business as the number one driver of adopting more Cloud technology. The power of Cloud enables companies to simply do things faster, staying in lock step with the speed of business. It enables faster delivery of new solutions and products to market. And, Cloud technology provides for more in-the-moment management of vast amounts of data.
• 49% of participants cited the cost effectiveness of Cloud.
• 35% felt that Cloud gave them a better ability to scale technology infrastructure, while at the same time making it more flexible. “What’s happening to my data?” It’s the #1 issue keeping IT executives up at night when it comes to Cloud.
• 74% of respondents cited data privacy and sovereignty as their top issue pertaining to Cloud technologies. Keeping company and customer data secure — and in a company’s impenetrable control — is the most important issue of the day. When you consider the critical importance of data security combined with government regulations and the global imperative of having data always available anywhere in the world, the complexities become an acute pain point when considering Cloud technology on a global scale.
• 54% cited concerns about data performance and reliability.
  IT executives appeared to have less concern about managing the complexities of global availability in their Cloud strategies (37%), while some cited complications with integrating legacy applications into their Cloud environments (24%) and the complexities of integrating outside vendors (17%).

When it comes to technology adoption, there are “Three Faces of Cloud.”
Take a look at this diagram. What’s compelling? The majority of respondents (70%) said they are more apt to be technology followers than early adopters – “or somewhere in between” – but they are not striving to be on the cutting edge of Cloud! Most enterprise-level IT decision makers do not necessarily strive for new technology adoption or leadership. Said one IT exec, “We will expand our footprint over time as the technology model matures and we get more comfortable.”

 

Though Cloud hype is pervasive and deafening, global multinationals are just beginning their Cloud journeys.

Senior decision makers are excited about Cloud but most companies are still testing the waters with SaaS and back-office solutions. The most common applications of this technology are sales, CRM, HR, analytics/data mining, and email. Customized mission-critical apps are most likely to be hosted in a private Cloud or a hybrid hosting environment. A particularly telling quote came from one exec: “Five to seven years of [the existence of] Cloud is just not enough for our core business applications to be ported [to the Cloud].”

It’s clear that IT leaders face an increasingly difficult job in a world where all roads lead to the Cloud. Cloud is viewed as an opportunity to simplify the complexity of technology for global organizations, but in many ways, still remains an emerging technology.

So what does this all mean in positioning Cloud products to IT decision makers?
Stay tuned for our next post.