By 2016, cloud will matter more to business leaders than to IT, according to research from the IBM Center for Applied Insights. This study – involving more than 800 cloud decision makers and users – shows that cloud computing can deliver far more than just efficiency. Forward thinkers are using cloud to gain significant competitive advantage – through strategic business reinvention, better decisions and deeper collaboration. And they have the business results to show for it.

1. © 2013 IBM Corporation
October 2013
Under cloud cover:
How leaders are accelerating competitive differentiation

2. © 2013 IBM Corporation
Respondent distribution (spanning 13 countries and 24 industries)
To learn how cloud is impacting organizations, we surveyed more than 800
cloud decision makers and users from around the world
2
*Growth markets surveyed: Brazil, China, India, Poland, South Africa, Australia, Singapore. Mature markets surveyed: Canada, France, Germany, Japan, UK
and USA. To smooth possible geographic distortions, responses were weighted based on an IBM assessment of each country’s total IT spend.
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy
CIO
Other IT
Geo
40%
60%
Growth
markets*
Mature
markets
28%
22%38%
12%
Other LOB
Role
C-Level LOB 21%
15%
19%
26%
19%
Organization size
(# of employees)
2,500-
4,999
5,000-
9,999
10,000+<1,000
1,000-
2,499

3. © 2013 IBM Corporation
Pacesetters say they’re gaining competitive advantage through cloud
computing, according to 2013 IBM Global Cloud Study
 Think cloud is just an IT obsession? Business leaders disagree. Line of business’ (LOB)
strategic interest in cloud will soon surpass IT’s.
 Pacesetters are using cloud to build competitive advantage – through strategic reinvention,
better decisions and deeper collaboration.
 They have the business results to show for it.
3
136% more likely to use
cloud to reinvent
customer relationships
170% more likely to use
analytics extensively via
cloud to derive insights
79% more likely to rely on
cloud to locate and
leverage expertise
anywhere in ecosystem
Strategic reinvention Better decisions Deeper collaboration
Pacesetters
Chasers
Pacesetters
Chasers
Pacesetters
Chasers 34%
61%
25%
59%
20%
54%
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation that surveyed 802 cloud decision
makers and users, spanning 13 countries and 24 industries.
For more info, visit: ibm.com/ibmcai/globalcloudstudy

4. © 2013 IBM Corporation
Think cloud is just an IT obsession? Business leaders disagree
4
Cloud is extremely important to overall business success
LOB’s strategic interest in cloud will soon surpass IT’s and it spans virtually every area of the business
(finance, operations, sales and marketing, product development).
“Cloud” was defined as encompassing application, platform or infrastructure as a service as well as private, public or hybrid delivery models.
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy
IT 18% increase
Today In three years
LOB 112% increase
58%
49%
72%
34%

5. © 2013 IBM Corporation
Not only do business leaders believe cloud is crucial – they’re getting
hands-on with their organization’s cloud initiatives
5
Who manages cloud services in your organization?
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy
IT IT/LOB
partnership
Line of business Other
52%
45% 16% 36% 3%

6. © 2013 IBM Corporation
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy
As cloud aspirations grow, pacesetting enterprises are out ahead driving
competitive advantage, not just efficiency
6
Pacesetters have deployed cloud on a broad scale
and are gaining competitive advantage through cloud.
Top cloud driver: Market responsiveness
Challengers are on par with Pacesetters in achieving
greater efficiency through cloud, but still lag on
differentiation and market responsiveness.
Top cloud driver: Collaboration
Chasers are more cautious about cloud. They’re in
early stages of adoption and are not yet using cloud to
drive competitive advantage.
Top cloud driver: Workflow optimization
Pacesetters
18%
High
agreement
High
Low
Adoptionlevel
Low
agreement
Gaining competitive advantage
through cloud
Challengers
51%
Chasers
31%

7. © 2013 IBM Corporation
The competitive advantage Pacesetters are gaining through cloud
correlates with stronger business results
7
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy
Gross profit
2009-12 CAGR
Revenue
2009-12 CAGR
2.4x
Pacesetters
Chasers
Challengers
12.7%
6.6%
6.8%
12.7%
9.5%
6.4%
15.3%
1.9x
Pacesetters vs.
Chasers

8. © 2013 IBM Corporation
Pacesetters use cloud to differentiate – through strategic reinvention, better
decisions and smarter engagement
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy8
Strategic
reinvention
But what's different about their cloud approach?
Competitive advantage through cloud
(% using cloud to achieve)
Chasers Challengers Pacesetters
% Pacesetters
surpass Chasers
Collaborate across organization
and ecosystem
46%
51%
44%
44%
51%
49%
45%
Reinvent customer relationships
Innovate products/services rapidly
Build new/improved business models
Better
decisions
Use analytics extensively to derive insights
from big data
Share data seamlessly across
applications
Make data-driven, evidence-based
decisions
Deeper
collaboration
Make it easier to locate and leverage
knowledge of experts anywhere in
ecosystem
Improve integration between development
and operations
+136%
+70%
+73%
+71%
+79%
+170%
25%
30%
30%
20%
34%
34%
34%
59%
52%
51%
54%
61%
59%
58%
62%30% 65%
+119%27% 51% 59%
+74%
+117%

9. © 2013 IBM Corporation
Pacesetters are leading the charge toward enterprise-wide strategies –
to guide experiments and increase agility
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy
Differences in management approach and deployment
9
Has enterprise-wide cloud strategy
Prioritizes open-source cloud platforms
Uses hybrid cloud
Encourages cloud experimentation through executive support
+270%
+83%
+176%
+39%
34%
40%
34%
57%
10%
21%
24%
38%
37%
58%
44%
53%
Chasers Challengers Pacesetters
% Pacesetters
surpass Chasers

10. © 2013 IBM Corporation
Through cloud strategies, Pacesetters are gluing together key technologies
and scaling up to do business in an entirely new way
Leveraging cloud for the integration and application of these strategic technologies
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy10
100%
100%
50%50%100%
50%
50%
100%
Mobile
Social business
Big dataAnalytics
Pacesetters
Chasers

11. © 2013 IBM Corporation
Looking forward, how will Pacesetters continue to stay ahead?
Most valuable capabilities in “cloud of the future”
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy11
(Even bigger) big data:
Access to – and management of –
vast data stores they can’t get to now
Product/service building blocks:
Easy-to-assemble industry or business
service components they can use to
construct new products or services
Industry-specific platforms:
Cloud platforms with applications
and computing environments designed
specifically for their industry
Pacesetters
Chasers 38%
60%
Pacesetters
Chasers 50%
59%
Pacesetters
Chasers 27%
57%

12. © 2013 IBM Corporation
See how cloud can help you improve your competitive position
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy12
With prioritized differentiators and an
enterprise cloud strategy, technology
decisions can be better aligned with
business needs.
Business objectives:
Prioritize competitive
differentiators to tackle
via cloud
Given your competitive positioning,
consider where cloud could drive
greater differentiation.
• New business strategies?
• Faster product or service
innovation?
• Better ways of engaging
customers?
• Changes to your business model?
• More informed strategic or
operational decisions?
• New or broader networks of
expertise?
Cloud technology:
Align platforms to
business objectives
The broader and more strategic
your cloud initiatives are, the more
critical it becomes to have an
enterprise-wide strategy.
• How does your cloud strategy
enable mobile, social and big data
initiatives?
• Are IT and LOB collaborating
effectively to manage cloud
services and make investment
decisions?
• Is senior management on board?
What kind of governance structure
do you have in place?
• Which deployment aspects should
be more tightly controlled? Are
teams given sufficient flexibility?
Cloud strategy:
Drive enterprise
responsiveness through
holistic strategy
• Which systems should be on
open-source platforms to gain
speed, scale and access?
• Do you have the right mix of
public and private cloud to meet
your requirements? Or will you
need the flexibility of integrated,
hybrid cloud?
• Where might an industry-specific
platform supply tailored
functionality or fill an expertise
gap?

13. © 2013 IBM Corporation
To learn more about the study, please visit
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
For more info, visit: ibm.com/ibmcai/globalcloudstudy13
ibm.com/ibmcai/globalcloudstudy

14. © 2013 IBM Corporation14
Additional detail on IBM and Cloud

15. © 2013 IBM Corporation
IBM is on a similar journey with cloud – early results point to the
strategic transformation cloud can enable
15
Strategic reinvention:
Delivering innovation
faster
Deeper collaboration:
Collaborating at
IBM-scale
Situation: Testing backlog caused by provisioning challenges had become the single
biggest factor delaying IBM’s new application deployments.
How cloud transformed:
• IBM’s development and test cloud has virtually eliminated our testing backlog, speeding
new development and enabling applications to reach the market sooner
• Development teams can more quickly build and manage their own dev/test environments
based on templates available via cloud – reducing provisioning time from 5 days to as
little as 1 hour
Better decisions:
Providing centralized
analytics capabilities
Situation: Business Intelligence applications were being built separately by individual
business units, creating silos of information and massive duplication.
How cloud transformed:
•Delivers analytics as a service, making the capability universally accessible
•Supports 200K+ users globally, providing access to 100+ data warehouses and 500+
analytic applications across all key business processes (Sales & Mktg, HR, Product Dev,
Fulfillment, Finance and Sr Exec reporting)
•Added $300M+ in business value in past year
•Exploits latest technologies to process queries up to 100X faster
Situation: Portfolio of siloed social and collaborative applications constrained
collaboration. Needed ability to integrate >425,000 employees spread across 170
countries, 40% of whom work remotely.
How cloud transformed:
•IBM Connections social networking platform integrates and improves collaboration,
helping employees identify and build networks of experts
•As of October 2012, had enabled 2.1M connections among employees, 127K
communities, 825K files shared & 24M downloads

16. © 2013 IBM Corporation
Cloud computing is creating a sea change at IBM, not just in how IT
is delivered, but in how the business does business
16
“…All the emphasis (with cloud) is on cheaper and efficient ways to deliver IT. In reality, it’s
also a way of delivering new industrial value – that’s the more exciting thing.”
– Erich Clementi, IBM Sr Vice President Global Technology Services, IBM’s Hidden Cloud, Forbes.com
Business reinvention through cloud:
 Helping IBM integrate information across the operation to improve problem response and
make smarter business decisions
 Enabling work teams to tap into enterprise know-how, resources and applications that were
formerly unavailable to them economically, technically or geographically
 Putting powerful analytics in the hands of sales, marketing, finance, HR and other IBM
business groups to solve business challenges, improve efficiency and exploit opportunities
for revenue and growth
 Helping researchers accomplish in hours what used to take weeks: complex data
calculations and comparisons, modeling and simulations
 Helping the business bring new and innovative solutions to market faster by facilitating
experimentation, collaboration and social business.

17. © 2013 IBM Corporation17
© Copyright IBM Corporation 2013
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October 2013
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