Unlocking the Cloud
How cloud platforms help companies compete in a changing global marketplace
January 2014
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
The Platform Imperative
What is a cloud platform?
A cloud platform, sometimes known as
Platform-as-a-Service, 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.
Survey Profile
We conducted a survey of 200 senior business and IT executives across several
industries.
Survey profile: Title
25%
13%
19%
14%
30%
What is your job title?
CEO
CIO
IT Infrastructure Manager
Business Unit head
Other (Includes COO, Chief Innovation Officer, Chief Ar-chitects, EVP/SVPs, and Developers)
Survey profile: Country
18Canada
25Mexico
32USA
25Brazil
25UK 20
Germany
5Saudi Arabia
6Australia
7Japan12
China25
India
The survey spanned 11 countries.
Survey profile: Industry and Size
25%
7%
28%
28%
13%
What is your firm's industry segment?
Banking
Capital Markets
Consumer Products
Retail
Telecommunications
19%
18%
14%
28%
10%
12%
What is your firm’s annual revenue (US$) for the most recently completed
fiscal year?
$25 million - $99 million
$100 million - $499 million
$500 million - $999 million
$1 billion - $4.9 bil-lion
$5 billion - $9.9 bil-lion
Over $10 billion
Research Output:Four papers based on survey results and executive interviews
Paper 1: Unlocking the Cloud
“We are witnessing a major shift in the way computers and IT are used.”
—Feargal O’Sullivan, Head of Sales—Americas, NYSE
Technologies
This paper provides an overview of the shifting cloud landscape, including case studies and an analysis of how leading companies use cloud platforms.
Paper 2: Unleashing the Cloud
“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
This paper looks at the ways cloud platforms support mobile applications and strategies to improve customer experience, worker capabilities, and bottom-line results.
Paper 3: Protecting the Cloud
“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
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.
Paper 4: Connecting the Cloud
“[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
This paper examines the shifting cloud landscape and its impact on business.
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.
Unlocking the Cloud
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.
Growing investment in the cloud
56% of respondents plan to invest heavily in cloud platforms over the next 3 years.
Only 4% have no plans to invest in cloud platforms.
-10%%
10%20%30%40%50%60%
52%
34%
6% 8%
57%
31%
9%3%
How would you describe your company's planned investment in cloud computing over the
next three years?
APJ Others
No function is primarily cloud-based at this time…
HR Purchasing Finance Marketing Sales Supply Chain Innovation/R&D0%
10%
20%
30%
40%
50%
60%
70%
2%
12%14%
26%
12%
20% 20%
15%
23%25%
27% 27%
20%
26%
To what extent are key business functions using cloud plat-forms today?
APJ Others
…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.
HR Purchasing Finance Marketing Sales Supply Chain Innovation/R&D0%
10%
20%
30%
40%
50%
60%
70%
34%
40%38%
58%
52%56% 56%
47% 48% 48%
63%
55%
47%
60%
To what extent will key business functions be using cloud platforms in 3 years?
APJ Others
How the cloud pays off
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.
Developed new
products
54% APJ
54% Others
Developed new lines
of business
46% APJ
39% Others
Entered new
markets
26% APJ
41% Others
Has your company developed new services and lines of business or tapped new markets via the cloud?
Unleashing the Cloud: Putting Mobility to Work
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.
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.
Mobile strategy empowers workers
Companies are providing employees 24/7 mobile access to internal systems and real-time data.
53% of respondents provide workers with mobile devices.
44% have deployed at least one mobile app.
Cloud leaders are more likely to have deployed a mobile app and have a BYOD policy.
0%
10%
20%
30%
40%
50%
60%
50%
56%
40%
56%
42%
30%
18%
54%52%
40%
37%
44%
17%18%
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 Others
A customer focus
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%)
Faster response times (59%)
Customer retention (47%)
Brand loyalty (43%)
31%
23%
14%
14%
7%
8%
5%
What is your primary area of focus regard-ing your mobile cloud strategy?
Customers
Internal productivity
Virtual collaboration
Fast time to value for business
Workflows
Business continuity
Business partnersMobile strategy goals
Real-time customer service
Faster response times
Customer retention
Increased brand loyalty
Increased revenue
Bringing customers into bricks-and-mortar stores
0% 10% 20% 30% 40% 50% 60% 70%
67%
59%
47%
43%
33%
8%
Mobile strategy goals
Protecting the Cloud:Understanding Security & Risk
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.
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.
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
56% Latin America
32% EMEA
52% APJ
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%.
Regulatory risk (75%)
Top 3 concerns among cloud
leaders:
Business continuity risk (56%)
Brand risk (78%)0%
20%
40%
60%
80%
100%
82%78%
86% 86%
80% 80%
59%62%
78%76% 77%
75%
With regard to your company's adoption of cloud computing, to what extent are you
concerned about the following risks?APJ Others
APJ leads in key security measures
We have embedded traditional/onsite protections in cloud applications
We use identity and access management
We have deployed user tracking
We perform regular security audits
We collaborate with cloud partners on security strategy and implementation
We have engaged third-party security partners
0% 20% 40% 60% 80%
48%
58%
53%
53%
34%
17%
56%
70%
54%
62%
44%
14%
What steps have you taken to deal with security risks in the cloud?
APJ Others
Connecting the Cloud:The Rewards of Integrated Platforms
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.
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.
Joining together
building their own business networks
(74%)
participating in networks set up by
partners (54%)
participating in networks set up by
technology providers (50%)
APJ respondents are…
-
Pursuing integration
We have a dedicated team that is focused on cloud integration
We have purchased integration tools
We use integration-service providers
We only work with cloud-based service providers with built-in connectivity to other cloud-based services
We have outsourced integration to 3rd party vendors
0% 20% 40% 60% 80%
62%
64%
62%
26%
22%
53%
56%
49%
25%
9%
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
Conclusions
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.
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.
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