Laying the foundations for The Year of The Cloud

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1 A brighter place for business White paper: Laying the foundations for The Year of The Cloud Why connectivity is the key to harnessing hosted services in 2012 and beyond Find out more online at /hosted

2 With all the hype of the last few years, you d be forgiven for thinking that The Year of The Cloud was behind us. In reality, research has shown that hosted services are yet to hit the mainstream. Calling on a recent survey carried out by leading IT publisher, IDG Global Solutions, the themes outlined in this paper confront current sentiment surrounding the opportunities and threats posed by cloud technologies. If we want to reduce the barriers to entry for cloud services we must tap into the hearts and minds of the UK business community. Introduction: Telling industry insights In October and November 2011, leading IT publisher IDG Global Solutions conducted a survey of 200 qualified decision makers from across the SME and corporate space. The aim was to establish an industry benchmark against which the UK business community could compare their current IT and telecoms capabilities against their competitors, and in-line with wider technology trends. Some of the most striking insights from the research surround the adoption of cloud-based applications and the apparent reticence of UK businesses to harness these latest technologies as tools for business transformation and growth. In this paper we explore the extent of the business opportunity for hosted technologies, perceived barriers to entry and how cloud providers can support you in embracing hosted services, at whichever level works for your business. Hype or Holy Grail? Cloud usage across UK businesses 58% don t use any cloud services 50% of corporate 60% of SMEs Cloud adoption timings 26% claim to have started using cloud within the last five years 36% within the last 12 months 38% in the last 1 2 years Although some media predictions do exaggerate the cloud s current UK standing, there is sound evidence that businesses are beginning to see the cost, flexibility and business continuity benefits of turning to hosted solutions, and seriously looking into either expanding on their existing cloud infrastructures or tapping into this territory for the first time in Hosted Exchange has undoubtedly paved the way for cloud adoption reflected by the IDG research findings that over a quarter of end-users already embracing the cloud are doing so via services. Other offerings more readily being exploited are back-up/disaster recovery (DR); storage; and webhosting. Growth in 2012 is most likely to centre on these core applications, as well as unified communications (UC) and collaboration solutions, as enterprises seek to advance beyond voice into other services such as video calling and conferencing, web collaboration tools and instant messaging. Note: SMBs defined herein as employees and corporates defined as having over 250 employees.

3 Too big an opportunity to miss? Of businesses currently embracing cloud solutions, 94% report that they are satisfied. 85% of those currently using the cloud expect to increase their use over the next 12 months. Research points to some degree of stagnation among those companies currently steering clear of the cloud, with 84% stating that they had no immediate intentions to invest. 66% of those not currently investing manage their IT needs entirely in-house. While the first wave of adoption has been primarily driven by end user desire for the flexibility that the cloud model provides, it is the pursuit of ongoing cost savings that is the main driver for the second phase of wider adoption. Given this half-hearted adoption, it is unsurprising the research also showed that the providers and advisors you work with to develop IT and telecoms infrastructure are reluctant to insist too much on cloud based services. Providers are always keen to showcase new technologies to advance your ICT infrastructure but they will inevitably be steered by what they perceive your preconceptions to be. In-house ICT teams may be more inclined to stick with what s familiar in the absence of a driver for change or the support to confidently undertake the transition. As a much higher proportion of corporates retain full control of their IT and telecoms requirements, it is also likely that the logistics of managing and implementing a large network on hosted platforms is keeping the UK s bigger businesses from becoming complete cloud converts. Are businesses taking strategy seriously enough? 10% of businesses admit that IT and telecoms strategy is never discussed at board level. Although most organisations are increasingly realising the intrinsic link between advanced ICT and better business performance, there s clearly still work to be done. Neglecting to revisit IT strategy carries with it obvious risks in such a dynamic IT world: sticking with the status quo in reality means going backwards - impacting on a host of issues relating to productivity, security breaches and unscheduled downtime. UK businesses and their IT leaders need education to articulate the benefits of the cloud, how to build a cloud strategy and importantly, how to create the migration plan from in the corner to in the cloud.

4 Making the switch Of the 58% of businesses still shying away from cloudbased hosting, SMEs show the greatest reticence in making the switch. This is a surprising result, as cloud technologies have a lot to offer SMEs than any other segment of industry so it s doubly disappointing that the cloud suppliers have failed to convince SME owners to take the plunge. The lean and agile business models of start-ups and SMEs coupled with the ability to defer and translate Cap-Ex into Op-Ex means that the flexibility of cloud applications are well suited: the company itself does not need to take the budgetary hit of buying new servers this cost is absorbed by the provider who also has the responsibility of keeping software and security measures updated and as such this relieves the SME of difficult and expensive operational support, which further reduces costs. The business itself just pays for what it uses, be that bandwidth, storage or processing, or a bespoke combination of these applications. However, security concerns, confusion over where data is stored and who might have access to it, as well as a desire to avoid the inevitable time investment in deploying new infrastructure are all factors contributing to the slow uptake amongst SMEs. Although larger businesses may have more to consider, they are in a position to pick and choose applications that are most suited to an early migration to hosted and integrate these with legacy systems remaining discrete and on-premise. This complication is likely keeping the UK s bigger businesses from becoming complete cloud converts. Engaging employees: the demand from within Most companies offer at least one method of remote access, but hosted desktop has very few advocates, with only 11% investing in the ability to run office applications remotely. Almost a quarter of the companies surveyed by IDG report that they still cannot or choose not to support the use of staff personal devices at work. Not only are security concerns contributing to the slow uptake of cloud technologies in general, they are filtering through to and curtailing the consumerisation of IT and telecoms in the workplace. There is a reticence to accept Bring Your Own (BYO) technologies, despite employee demand for the facility.

5 As King Canute discovered, you can t stop the tide coming in and employees will be bringing their personal devices to work. Smart businesses will embrace this trend sooner rather than later and with an ever more mobile workforce, BYO technologies are fast becoming a must have rather than a nice to have. While companies are starting to accept the need for out of office operations; they re not actively looking for technologies that can enhance the remote working experience, and moreover, maximise productivity from their workforce. Conclusion The message is that by upgrading existing infrastructure, businesses are benefitting through new technology, improved productivity and hard cost savings. Users of the cloud are highly satisfied and plan to extend into new areas and applications Adoption of the cloud is less about technology and more about transforming the fundamentals of how you manage IT operations Cloud compliments and co-exists with existing systems, rather than needing to be an overnight forklift replacement Education is lacking and this leads to lack of trust and inertia, creating a barrier to adoption Cloud is a strategy that is in-tune with current business and economic imperatives it improves access and communications with customers and staff, and translates capex to opex Working with a knowledgeable provider can increase your understanding of hosted solutions and improve your business grade. Your next steps Education Work with your provider to educate yourself on the opportunities that hosted applications could bring for your business. Audit Take stock of your current systems and perform a thorough audit of how effectively they are working for you. Are they adding value to your business? What other options are available to enhance your business performance? Implement Work with your provider to manage and implement the changes identified during your audit. Your provider can guide you through this process to make the period of change as seamless as possible. Review Ensure you review the performance of your IT and telecoms systems on a bi-annual or annual basis. Keep abreast of the latest business technology advances to ensure your systems are working as efficiently as they can be for you. Refine Take the time to update systems and make necessary amendments to your IT and telecoms solutions. Remember that a proactive approach to IT and telecoms management mean you re positioning yourself most effectively to manage change and avoid issues such as data loss or security breaches in future.

6 About TalkTalk Business TalkTalk Business has more than 16 years of experience in providing business telecoms to organisations of every shape and size. We offer our partners access to a full portfolio of solutions that includes calls and lines, data connectivity, hosted services and much more. All delivered across our Next Generation Network - the UK s largest all-ip network with the speed and resilience businesses need. Our experienced UK-based teams are ready to provide support however, and whenever, you and your customers need it. Overview of hosted portfolio With TalkTalk Business you can offer your customers a portfolio of robust and feature-rich hosted solutions, including Hosted Contact Centre, UC, Call Recording and Data Centre. Overview of the Business Grade Benchmark In our Business Grade Benchmark research report, we ve looked at technology spend, trends and strategies across the SME and corporate space, as well progress in channel adoption of new applications, in-line with customer demands. Working with leading IT publisher, IDG Global Solutions, the survey of 200 end-users and 100 partner representatives gives us insights into reseller perceptions versus the end-user reality when it comes to IT and telecoms strategy, technology, value and service in a wider business context. The aim was to establish a Business Grade Benchmark based on the industry responses, allowing UK organisations and the partner community to compare their current standing in the competitive landscape. Benchmark your business now free personalised infographic If you d like to get involved, an online replica of the IDG survey is available at: /solutions/businessbenchmark Upon completion, you ll receive your Business Grade as a percentage score, as well as a personalised infographic showing how your responses stack up against the industry average Call: Lines are open Mon-Fri 8am-6pm

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