Cloud computing. Tried and tested. Research report UK early adopters share their experiences of Cloud computing.

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1 Cloud computing Tried and tested Research report UK early adopters share their experiences of Cloud computing.

2 Contents Research Methodology Key Findings Adoption of Cloud and SaaS Adoption of Cloud Computing Adoption of SaaS Cost benefits of moving into the Cloud Main use of the Cloud Cloud: The Verdict Issues with the Cloud Would you recommend the Cloud? Research Methodology The research for this report was carried out via 100 interviews in August and September 2010 with senior IT decision-makers. All interviewees represent Enterprise-level organisations which use Cloud computing, and are based within the UK. Interviews were carried out with 60 private sector companies and 40 public sector organisations: Financial services Insurance Retail and distribution Utilities (energy/communications) Manufacturing Travel/transport Technology Central Government Local Authorities 2

3 Key Findings Organisations mostly use private Cloud infrastructures, and shared community Clouds are used more than public Clouds 73% of organisations report using a private Cloud model. Shared Cloud solutions have been adopted by 30%, while only 25% say they use public Cloud services. The majority of organisations either currently use (or would consider using) Cloud services across all workloads Four workloads have already been put into the Cloud by the majority: 61% have used it for websites, 57% for test and development, 51% for PC applications and 51% for CRM systems.the majority of respondents said they would consider expanding this by adopting Cloud services across their organisation. Only 8% said they would never use the being used (or would be considered) by 65% of organisations. In the Private Sector, Cloud is most often used to speed the deployment of IT systems 62% of companies reported that Cloud services enabled quicker introduction/set-up compared to traditional IT systems In the public Sector, the decision to adopt Cloud is to achieve savings... 55% report that the lower costs associated with the Cloud was a decisive factor in migrating their workloads. Savings achieved in all sectors... Respondents report an average saving of 24% by adopting the Cloud. Most say that this saving is as (or greater than) expected. Only one in eight respondents were disappointed with their saving. Software as a Service (SaaS) is being more heavily deployed by private companies Although the majority of Cloud users have adopted SaaS, more private organisations (80%) report this compared to two-thirds of public sector organisations. Also, 84% of the smallest organisations surveyed (those with employees) have at least one SaaS solution in use at present, compared to around three-quarters of organisations with more than 2000 employees. Cloud users have reported problems, but they tend to be relatively minor Half of all Cloud users report experiencing problems from using the Cloud. For most, these problems are not severe the most commonly cited issue is not knowing where data is located, an issue for 28% of all non-private Cloud users. The next most frequently cited issue users inappropriately buying and using their own Cloud services was reported by just half of those who said they don t know where their data is located. This suggests that substantial problems are being experienced only by the minority. The most commonly cited issue is not knowing where data is located, an issue for 28% of all non-private Cloud Only 2% of respondents said that they would not recommend Cloud to a peer. Two-thirds said that they would public sector professionals are more likely to recommend Cloud services (67% compared to 58%). 3

4 Adoption of the Cloud and SaaS 73% of all organisations that currently use Cloud computing say they prefer private solutions. fewer respondents (30%) said they use a shared community Cloud service, while only 25% have deployed a public Cloud service. This suggests that if organisations adopt the Cloud, they want to retain some degree of control and visibility. This is especially true of the public sector, where only 18% of respondents said they use public Cloud services (compared to 30% of private sector companies). Organisations reported that websites are currently the most likely workload to be hosted in the Cloud. The majority of respondents reported that their test and development, CRM and PC application workloads are also now run in Cloud-based environments. Most of these are functions which handle relatively little sensitive data. For example, test and development rarely holds any critical information. Although CRM systems do hold sensitive customer information, there are established ways to hold this information securely. Overall, the research suggests that organisations using the Cloud are moving into it in phases; that they have migrated 47

5 Adoption of Cloud Computing Organisations currently making use of the Cloud are likely to be using (or would consider using) Cloud for all their workloads in the future The Proof: The majority of respondents said that they either currently use (or would consider using) the Cloud for the workloads listed below. Websites CRM Marketing systems PC applications Test and development Databases ERP systems Payroll and HR systems Finance and accounting Currently uses Cloud for this Would consider using Cloud for this Would not consider using Cloud for this Total % The Point: The Cloud is being adopted on a workload-by-workload basis. When organisations initially adopt they tend to run trials on less-sensitive workloads (most commonly, test and development, websites and PC applications). There is no one workload where the majority have said that they will never consider using the Cloud. The overall faith in the Cloud as a viable model for the future puts those who have already invested many with an eye to adopting it throughout their organisations in a strong position. Because once organisations start adopting the Cloud for workloads like databases, CRM and ERP, they will have an advantage over competitors who won t be able to operate lower cost levels or implement new business services as rapidly. 5

6 When asked why they moved into the Cloud, the dominant factor cited by respondents across all sectors, was cost saving. 56% said that the lower costs associated with the Cloud was a decisive factor in migrating, though nearly as many said that the ability to introduce and set up the service quickly was important too. There is a marked difference between the private and public sectors, with 62% of private sector companies reporting that the leading reason for using the cloud was the speed of deployment/set-up: cost reduction being the next most important decision factor (57%) and the ability to increase/decrease resources being the third (48%). The public sector, being more focused on using Cloud for cost-saving purposes, saved a 27% on average, with the private 71% of organisations achieved the savings expected or exceeded their expectations. Only one in eight said that their cost saving was less than anticipated. Main use of the Cloud There is no one main application of the Cloud that is considered to be the most important, and there is also a variance between public and private sector usage. Public sector respondents said they are more concerned with using the Cloud for hosting PC applications with lower importance associated to Cloud for CRM and test and development. There is currently no one most important use of Cloud The Proof: There is a wide spread of what respondents consider to be the most important use of the Cloud. Total % CRM Test and development Websites PC applications Databases Marketing systems Payroll and HR systems ERP Finance and accounting 0 Private Sector Public Sector The Point: There is some correlation between the workloads for which the Cloud is commonly used and what organisations consider to be the most important. Again, however, there is no huge private sector respondents. 6

7 Adoption of SaaS The majority of those organisations who use Cloud computing infrastructure to host their applications, have also adopted a SaaS solution. On average, those who say they use SaaS do so for three of their workloads, the most popular being CRM and websites. Use of SaaS is widespread amongst Cloud users The Proof: Only 24% of organisations using the Cloud said that they do not use a SaaS solution for any of the listed workloads Total % CRM Websites PC applications Payroll and HR systems Marketing systems Databases The Point: Although use of SaaS on various workloads tends to echo the use of the Cloud on those workloads (i.e. CRM and websites are both the most likely workloads to be Cloud-based and the most likely to be run using a SaaS solution), there is not a great deal of difference amongst the top six workloads here. are using at least one SaaS solution compared to only two-thirds of public sector organisations. This is only to be expected employees) said they use SaaS compared to around three-quarters of organisations with more than 2000 employees. 7

8 Cloud: The Verdict Issues with the Cloud 51% of organisations reported some form of issue perhaps a lot lower than might be expected from what is still an emerging concept though a greater number of smaller organisations (60%) report experiencing problems. The main issue that respondents report is not knowing where their data is located, cited by 28% of all respondents. Though many would link this with compliance issues, only one in twenty stated that they were aware that they had lost legal control of corporate data. The next most highly rated issue users inappropriately buying and using their own Cloud services was only a concern for one in eight organisations surveyed. If organisations are experiencing these issues, it is only a relative minority that are experiencing something substantial. Roughly the same number of respondents who had experienced users buying their own services also experienced their data being accessed by an unauthorised third party or had their data misused by a service provider. These are more substantial issues, yet they have only been experienced by the minority. Would you recommend the Cloud? Around two-thirds of Cloud users said they would be likely to recommend the Cloud to another CIO, and one in ten thought it extremely likely. Public sector respondents are more likely to recommend the Cloud. 67% said that they would be likely to recommend, compared to 58% of private sector respondents. Given that the main reason for adopting the Cloud cited by public sector respondents was to reduce costs, the willingness to recommend amongst this group suggests a powerful cost-saving association with the platform. call or visit IaaS.get-there-sooner.com 8

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