Unlocking the cloud - Oxford Economics


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Last year, Oxford Economics conducted a survey of 200 senior executives across 11 countries about the cloud’s function in their businesses. The resulting papers and our presentation explore key findings and their implications as they relate to cloud adoption, security, mobility, and integration.

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Unlocking the cloud - Oxford Economics

  1. 1. Unlocking the Cloud How cloud platforms help companies compete in a changing global marketplace January 2014
  2. 2. The Platform Imperative Build a better platform, and you will have a decided advantage over the competition. —Mark Bonchek and Sangeet Paul Choundary in a January 2013 blog post for Harvard Business Review
  3. 3. What is a cloud platform? A cloud platform, sometimes known as Platform-as-aService, is a system that delivers easy-to-deploy infrastructure to help develop applications. The pre-built infrastructure reduces the time needed to make applications ready for use (e.g., server administration, managing OS patches). In this way, cloud platforms maximize developers’ time and allow them to work solely on coding innovative applications.
  4. 4. Survey Profile
  5. 5. Survey profile: Title We conducted a survey of 200 senior business and IT executives across several industries. What is your job title? CEO CIO 25% 30% IT Infrastructure Manager Business Unit head 13% 15% 19% Other (Includes COO, Chief Innovation Officer, Chief Architects, EVP/SVPs, and Developers)
  6. 6. Survey profile: Country The survey spanned 11 countries. 18 Canada 25 UK 32 USA 25 Mexico 20 Germany 5 Saudi Arabia 7 Japan 12 China 25 India 25 Brazil 6 Australia
  7. 7. Survey profile: Industry and Size What is your firm's industry segment? What is your firm’s annual revenue (US$) for the most recently completed fiscal year? $25 million - $99 million Banking 13% 12% 25% 19% $100 million - $499 million Capital Markets 10% $500 million - $999 million Consumer Products 29% 7% 18% Retail 28% $1 billion - $4.9 billion 28% 14% $5 billion - $9.9 billion Telecommunications Over $10 billion
  8. 8. Research Output: Four papers based on survey results and executive interviews
  9. 9. Paper 1: Unlocking the Cloud This paper provides an overview of the shifting cloud landscape, including case studies and an analysis of how leading companies use cloud platforms. “We are witnessing a major shift in the way computers and IT are used.” —Feargal O’Sullivan, Head of Sales—Americas, NYSE Technologies
  10. 10. Paper 2: Unleashing the Cloud This paper looks at the ways cloud platforms support mobile applications and strategies to improve customer experience, worker capabilities, and bottom-line results. “Mobile is going to take over in the next couple of years, and companies will have to pay attention to that fact.” —Shawndra Hill, operations and information management professor at University of Pennsylvania’s Wharton School
  11. 11. Paper 3: Protecting the Cloud This paper shows how firms are meeting this challenge—one that dwarfs any of the other challenges of cloud computing, such as regulatory compliance, the fragmentation of information, and data migration problems. “The question isn’t whether to be in the cloud—this is inevitable. It’s how to build the best security possible into a cloud environment.” —Roger MacFarlaine, VP of Technology and Systems at Mövenpick Hotels & Resorts Management
  12. 12. Paper 4: Connecting the Cloud This paper examines the shifting cloud landscape and its impact on business. “[Using cloud networks,] we are able to use the cloud to manage infrastructure and human capital far more effectively.” —Lincoln Wallen, Chief Technology Officer at DreamWorks Animation SKG
  13. 13. Who are the cloud leaders? Cloud leaders are the 16% of survey respondents with the most sophisticated strategies in adopting cloud platforms and managing cloud risks. These leaders are:  More bullish on cloud’s potential to drive revenue and cut costs.  More likely to prioritize virtual collaboration as a goal of mobile strategy, to have a BYOD policy, to have launched a managed service offering, and to use a cloud-based mobile app platform in production.  More concerned with operational risk than with IP/security risk.
  14. 14. Unlocking the Cloud
  15. 15. Paper 1: Key findings 1. Investment in cloud is booming. 2. Businesses are using cloud platforms across a growing range of functions. 3. Benefits of cloud adoption already are clear, and bigger payoffs are expected in the next 3 years.
  16. 16. Growing investment in the cloud How would you describe your company's planned investment in cloud computing over the next three years? APJ Others Only 4% have no plans to invest in cloud platforms. 60% 57% 50% 52% 40% 34% 30% 31% 20% 10% 6% 9% 8% 3% % We plan to invest heavily in cloud platforms 56% of respondents plan to invest heavily in cloud platforms over the next 3 years. We plan to make We plan to make moderate investments small investments in in cloud platforms cloud platforms We do not plan to invest in cloud platforms
  17. 17. No function is primarily cloud-based at this time… To what extent are key business functions using cloud platforms today? APJ 70% Others 60% 50% 40% 30% 20% 25% 23% 15% 10% 12% 26% 27% 27% 26% 20% 20% 14% 20% 12% 2% 0% HR Purchasing Finance Marketing Sales Supply Chain Innovation/R&D
  18. 18. …but widespread adoption is expected in the next 3 years. Most businesses plan to double cloud-based processes in their functional areas over the next three years. Marketing, sales, and innovation/R&D will see the largest increases. To what extent will key business functions be using cloud platforms in 3 years? APJ 70% Others 60% 63% 60% 58% 50% 55% 56% 56% 52% 48% 47% 48% 47% 40% 40% 30% 38% 34% 20% 10% 0% HR Purchasing Finance Marketing Sales Supply Chain Innovation/R&D
  19. 19. How the cloud pays off Has your company developed new services and lines of business or tapped new markets via the cloud? Developed new products Developed new lines of business Entered new markets 54% APJ 46% APJ 26% APJ 54% 39% 41% Others Others Others New business opportunities are proliferating in the cloud, and new markets are being tapped.  54% of respondents have developed new products via cloud.  41% have developed new lines of business.  58% collaborate with partners to create new products, and 54% build/host applications for business collaboration.
  20. 20. Unleashing the Cloud: Putting Mobility to Work
  21. 21. Paper 2: Key findings 1. Businesses are actively deploying mobile services. 2. Employees use mobile applications to connect to real-time data and internal systems. 3. Firms are using mobile applications to strengthen customer service strategies.
  22. 22. Developing mobile services Firms are taking active steps to deploy mobile applications. 61% of respondents have developed cloud-based mobile offerings. Other approaches include:  47% of respondents have launched managed service offerings.  53% have replaced on-premise systems.  40% have changed pricing.
  23. 23. Mobile strategy empowers workers What steps have you taken to give employees 24/7 mobile access to internal systems and real-time data, both internal and customer-facing? APJ 60% 56% 50% 54% Companies are providing employees 24/7 mobile access to internal systems and real-time data. Others 56%  53% of respondents provide 52% 50% workers with mobile devices. 44% 42% 40% 40%40%  44% have deployed at least one mobile app. 37% 30%  Cloud leaders are more 30% 20% 17% 18%18% 10% 0% We have We provide We have We allow VPN We have We have run We are adopted workers with instituted a connections deployed one a Proof of researching cloud-based mobile BYOD from mobile or more Concept for mobile app applications devices program devices mobile apps mobile apps platform and services options likely to have deployed a mobile app and have a BYOD policy.
  24. 24. A customer focus What is your primary area of focus regarding your mobile cloud strategy? Customers 14% 14% Internal productivity Virtual collaboration 7% 23% 8% 5% Fast time to value for business Workflows Business continuity Business partners 31% 31% of respondents say customer service is the centerpiece of their mobile strategy, more than any other category. Objectives for customer-based mobile strategy include:  Real-time customer service (67%) Mobile strategy goals Bringing customers into bricks-andmortar stores Increased revenue Increased brand loyalty Customer retention Faster response times Real-time customer service  Faster response times (59%) 8%  Customer retention (47%) 33%  Brand loyalty (43%) 43% 47% 59% 67% 0% 10% 20% 30% 40% 50% 60% 70%
  25. 25. Protecting the Cloud: Understanding Security & Risk
  26. 26. Paper 3: Key findings 1. Firms consider security the biggest challenge of adopting cloud platforms. 2. Cloud leaders assess risk differently. 3. To manage risk, businesses are taking steps to control access management and perform regular security audits.
  27. 27. Security breaches are a key concern 65% of respondents cite security as a major challenge to the use of cloud business networks. Other challenges include:  Consistency of data across applications and job roles (54%)  IP protection (50%) Technology presents its own challenges, such as:  Proprietary interfaces (36%)  Lack of end-to-end monitoring (33%) 66% of APJ respondents consider security a major concern, and 38% say that ensuring it is their biggest challenge.
  28. 28. Executives want to secure corporate data Security of corporate data is by far the top concern in every region but EMEA, where strong regulation may help alleviate fears. 54% North America 32% EMEA 56% Latin America 52% APJ
  29. 29. Leaders assess risk differently 80% of respondents rate Data security/IP risk as a “top 3” concern. Among cloud leaders, this figure drops to 65%. With regard to your company's adoption of cloud computing, to what extent are you concerned about the following risks? APJ 100% 80% Others 86% 86% 82% 78% 60% 59% 78% 76% 80% 77% 80% 75% 62% Top 3 concerns among cloud leaders: 40% Regulatory risk (75%) 20% Business continuity risk (56%) 0% Operational risk Business continuity risk Data security/IP risk Regulatory Brand and Financial risk and reputational compliance risk risk Brand risk (78%)
  30. 30. APJ leads in key security measures What steps have you taken to deal with security risks in the cloud? APJ Others 14% 17% We have engaged third-party security partners 44% We collaborate with cloud partners on security strategy and implementation 34% 62% We perform regular security audits 53% 54% 53% We have deployed user tracking 70% We use identity and access management 58% 56% We have embedded traditional/onsite protections in cloud applications 48% 0% 20% 40% 60% 80%
  31. 31. Connecting the Cloud: The Rewards of Integrated Platforms
  32. 32. Paper 4: Key findings 1. Integrating platforms offers the highest return on investment for cloud adopters. 2. Firms are building their own business networks and participating in networks set up by partners and technology providers. 3. In pursuit of integration, firms are building teams dedicated to cloud integration and purchasing integration tools.
  33. 33. The future will be integrated The IT rewards offered by cloud computing are only incremental gains compared with those promised by the merger of disparate clouds, whether operated by different groups within the same company or by external business partners.
  34. 34. Joining together - APJ respondents are… building their own business networks (74%) participating in networks set up by technology providers (50%) participating in networks set up by partners (54%)
  35. 35. Pursuing integration How does your firm ensure integration in the cloud, both of its own on-premise applications and those from partners and third parties? APJ Others 9% We have outsourced integration to 3rd party vendors 22% 25% 26% We only work with cloud-based service providers with built-in connectivity to other cloud-based services 49% We use integration-service providers 62% 56% We have purchased integration tools 64% 53% We have a dedicated team that is focused on cloud integration 62% 0% 20% 40% 60% 80%
  36. 36. Conclusions
  37. 37. What it takes to design a successful cloud platform strategy  Build vendor networks. Rather than taking a one-off approach, select a vendor as a core cloud provider.  Centralize controls to understand how systems and data are being used and to square vendors’ claims with TOS agreements.  Rely on KPIs. Common yardsticks include availability, workload compared to utilization, SLA response error rates, and revenue efficiencies.  Build a pool of IT talent that matches cloud requirements. Clouds present challenges different from traditional server-client environments.
  38. 38. The way forward Embrace the opportunities afforded by cloud networks. Organizations that achieve the best results engage in substantial planning when they select providers and build a platform. Cloud platforms represent a different—and far more efficient— way to collect, manage, store, share, and use data. Successful organizations acknowledge the changes needed in IT and enterprise culture. Organizations that take a holistic approach are more likely to achieve a competitive advantage than those that take a piecemeal approach. Ultimate benefits In the end, an integrated cloud network results in a more flexible, agile, and cost-effective IT department. It builds a solid foundation for the digital enterprise and unleashes business and IT gains that would not have been imaginable only a few years ago.
  39. 39. Come join the discussion! For more research on cloud technology and latest cloud news, join our blog community OR www.cloudplatformtrends.com follow us on Twitter. @SAPCloudTrends
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