Why Cloud Should Be Part of Your Company's Document Management Strategy

Transcription

1 WHITE PAPER Why Cloud Should Be Part of Your Company's Document Management Strategy Sponsored by: Sharp Keith Kmetz October 2014 IDC OPINION The cloud represents a new and evolving computing platform for the online delivery of many different products and services. IDC's market forecasts demonstrate an inevitable near-term shift to this platform with literally trillions of smart devices connected to it, including MFPs and other intelligent business devices such as interactive whiteboards and displays. While customers may have questions about cloud implementation, a simple dialogue with their technology supplier should allow them to determine whether a cloud solution is the right fit for their organization's business needs. In general, IDC sees the cloud as a win-win opportunity for suppliers and customers alike. IN THIS WHITE PAPER IDC views the transition to the cloud as a seismic shift for the future IT market. This includes defining the cloud and its relevance for business and identifying what topics and questions small and mediumsized businesses (SMBs) should consider prior to implementing cloud as part of a comprehensive document management strategy. SITUATION OVERVIEW Cloud services continue to grow and evolve at a phenomenal rate, particularly as companies of all sizes seek to leverage the power of the Internet to reduce operational costs while increasing access to business information. Not surprisingly, we see new cloud offerings entering the market regularly and often creating new product segments and deployment options. To put some perspective on this growth, IDC's forecast for public IT cloud services indicates that worldwide revenue will grow from more than $47.75 billion in 2013 to reach $ billion by This represents a strong compound annual growth rate (CAGR) of 22.8%. What is truly impressive about this high growth rate is that it is exponentially higher than the projected growth for the total worldwide IT market. October 2014, IDC #252196

2 These market figures demonstrate that it is not a matter of if the cloud will dominate the future IT market landscape; it's a matter of when the cloud will drive the market. The answer is obviously sometime in the very near future. This fundamental IT shift is a call to action. That is, companies of all kinds should already be considering strategies, services, and devices that leverage the cloud to address two fundamental business requirements: 1. An ongoing effort to drive down the business' operational costs 2. The need to increase the availability of business-related content Defining Cloud Services Of course, all the excitement around cloud services requires us to pause and define exactly what we are talking about. IDC's shorthand for "cloud" is accessing shared IT resources "on demand" over the Internet from a public cloud or software-as-a-service (SaaS) provider. Private solutions are another type of cloud service that can be built locally in a company's datacenter (e.g., enterprise private cloud services). Buyers generally pay for and use only those assets required and usually order and access the assets through a self-service portal. In general, the use of the cloud makes offerings easier and less expensive to access. Cloud services fall into three broad categories with a common set of criteria and a variety of deployment models: Application services or SaaS (e.g., ERP, collaboration, accounting, document management, and CRM from vendors such as ADP, Google, Microsoft, and salesforce.com) Platform services or PaaS (e.g., application development/deployment and middleware delivered via the cloud services model from vendors such as IBM, Oracle, HP, and Microsoft) Servers, storage, and system infrastructure services or IaaS (e.g., servers, system management, and security services delivered via the cloud from vendors such as IBM, AT&T, Nirvanix, EMC, and Cisco) Why Is the Cloud Significant for Your Business? The significance of the cloud is wrapped in the expected immediacy of the technology's adoption. In a recent IDC study, survey respondents demonstrated the pending swift transition to the cloud across all company sizes (see Figure 1). According to the results, approximately 37% of all businesses reported that their companies currently use the cloud. While this percentage rises with company size, the current percentages are below 50% for all company sizes, with the exception of large enterprises at 53%. However, the percentages should jump quickly to a solid majority percentage within a year (nearly 70% for all companies), and then nearly 90% of all businesses will be using the cloud in some manner within three years. It is clear that cloud will be significant in a very short time frame for all companies. Competitively, it will be important for such organizations to leverage the cloud to gain the promised benefits. We get to those benefits shortly IDC #

3 (% of respondents) FIGURE 1 Time Frame for Cloud Adoption by Company Size Q. When do you expect your company to adopt cloud-based services or cloud technology application for use by your employees? <100 employees (n = 215) employees (n = 211) employees (n = 141) 1,000+ employees (n = 255) Currently use Not using, but will within one to three years Not using, but will within one year Not using, but will beyond three years Source: IDC's Cloud and Mobile Print Multiclient Study, 2012 The cloud has a significant impact on organizations leveraging this technology (see Figure 2). Not only are a number of companies expected to adopt cloud technologies, but this adoption spans a substantial range of computing applications. Both front-office (e.g., , collaborative, personal productivity) and back-office (e.g., data backup, IT management, server/storage capacity) applications show high levels of current or future migration to the cloud, so the impact is significant for the business as a whole and specifically for the company's internal IT functions IDC #

4 FIGURE 2 Solutions/Services Already Deployed to the Cloud Q. What solutions/services have already been deployed to the cloud? What solutions/services will be deployed to the cloud in the future? Collaboration applications Data backup/archive/records mgmt Personal productivity applications (e.g., MS Office) IT mgmt Server capacity on demand Storage capacity on demand High-performance/technical computing applications Web site creation/management Document processing Print eprocurement Mobile device management Data analysis/mining applications IT help desk/it service mgmt Enterprise resource planning (financials) Enterprise resource planning (HR) Application development/testing/deployment Mobile printing n = 433 Source: IDC's Cloud and Mobile Print Multiclient Study, (% of respondents) Already Future As Figure 2 shows, IT decision makers indicated that only a few document-related solutions and services have already been deployed to the cloud at any notable level. stands out as the most prominent application deployed to the cloud at present. However, in the future, IT decision makers expect to deploy a majority percentage of select solutions and services to the cloud in the categories of collaboration, storage/backup, data analytics, general IT and mobile device management, document processing, etc. These results indicate that a fast-moving transition to the cloud is near across a wide range of applications and technologies. Companies of all types will need to seriously consider a cloud solution strategy for their business operations in order to keep up with a transitioning market and maintain a competitive edge. The ongoing challenges of a low-growth economy over the past several years have forced businesses to operate more efficiently, but often with fewer resources. To effectively compete in today's business climate, most companies need to rely on a growing range of technologies (e.g., devices, data, and applications) to meet this business objective. The emergence of the cloud as a repository for all types of business-related data and information offers an efficient avenue to maximize access to such IT technologies while minimizing the costs. Companies of all types will need to seriously consider a cloud solution strategy for their business operations in order to keep up with a transitioning market and maintain a competitive edge IDC #

5 In a survey, IDC asked IT decision makers about the importance of several cloud characteristics to their companies (see Figure 3). Not surprisingly, factors surrounding cost efficiencies were rated as important, but other cloud characteristics such as facilitating collaboration and faster deployment of applications were highly rated. In addition, all of these factors were almost always given a rating of at least 3 on a scale of 1 5 (1 = not at all important, 5 = very important). This means there seems to be at least some understanding from the marketplace that cloud offers obvious benefits to businesses. FIGURE 3 Importance Ratings of Cloud Characteristics Q. Please evaluate how important the following characteristics of cloud are to your company (1 or 2 = unimportant; 3 = neutral; 4 or 5 = important). Cost efficient Self-service through a portal faster delivery and reduces IT workload Meter usage Automated and rapid scaling Flexible migration of workloads between private and public clouds Faster deployment of applications Establish "standard services" Ability of cloud applications to interact with noncloud applications Easier/more cost-effective access to document services Facilitate collaboration across remote and/or distributed teams (% of respondents) Important Neutral Unimportant n = 433 Source: IDC's Cloud and Mobile Print Multiclient Study, 2012 Key Benefits of a Cloud Implementation The benefits of moving to the cloud appear to be fairly obvious to IDC's respondent base (see Figure 4). When considering issues such as Reducing total IT spend per employee Improving IT staff productivity and service levels to end users Reducing total spend on software licensing and maintenance 2014 IDC #

6 Reducing total spend on custom software development and support Reducing total IT and hardcopy hardware spend Increasing revenue by enabling the company to deploy new revenue-generating programs faster over 70% of respondents rated each of these benefits as important across all company sizes. In fact, very few, if any, respondents said that these benefits are unimportant. FIGURE 4 Importance Ratings of the Anticipated Benefits of Moving to the Cloud Q. Please rate the importance of each statement with respect to what your company's anticipated economic benefits of moving to the cloud will be (1 or 2 = unimportant; 3 = neutral; 4 or 5 = important). Reduce total IT and hardcopy hardware spend Reduce total spend on software licensing and maintenance Reduce total spend on custom software development and support Improve IT staff productivity and service levels to end users Reduce total IT spend per employee Increase revenues by deploying new revenue-generating programs faster Reduce our carbon footprint, power, cooling, and related costs (% of respondents) Important Neutral Unimportant n = 433 Source: IDC's Cloud and Mobile Print Multiclient Study, 2012 Of course, there a number of other inherent benefits of the cloud outside the productivity and financial gains noted previously. However, these additional benefits are also part of the cloud's overall value proposition to adopters: Scalability. The cloud is scalable so that storage capacity is available for as long as users need it and for as much as they need. Additionally, the payment model is scalable in that cloud users pay for only what is used and how much is needed IDC #

7 Automatic application updates no intervention required. Applications are automatically updated so that no IT intervention is needed. This is particularly important for resourceconstrained SMBs. On-the-go access to critical business information for the mobile worker. The cloud allows an increasingly mobile workforce to remotely access important business information. Users are no longer "tethered" to the network to do their jobs. Instead, the cloud provides the repository for anytime, anywhere access to data/documents so that mobile workers can perform workrelated tasks "on the go." The hardware tools leveraged for this access include media tablets and smartphones. The explosive growth projections for these mobile hardware devices highlight the crucial requirement for mobile workers to operate at peak efficiency even while they are moving about during the business day. IDC forecasts that the worldwide media tablet market will grow from million units in 2013 to million units by 2018, a 6.8% CAGR. IDC forecasts that the worldwide smartphone market will grow from 1.01 billion devices in 2013 to 1.84 billion devices by 2018, a 13% CAGR. Important business information is backed up on the cloud. The cloud provides backup in case of catastrophic events. Business data is stored in the cloud within offsite datacenters. Differences Between SMBs and Large Enterprises with Respect to the Cloud and Its Benefits Cloud's benefits are apparent even to SMBs. While some might think that cloud adoption would be relegated to large companies with deep IT resources, IDC's research shows that respondents from SMBs with fewer than 500 employees comprehend the benefits of cloud. However, we observe some important differences between SMBs and large enterprises: Smaller companies rely on their suppliers for technical knowledge. Respondents from these companies tend to give many more "don't know" responses when asked about cloud characteristics. Related to the "don't know" responses in smaller companies, larger companies often are further along in adopting cloud-based technologies and more aware of the critical issues around deployment than small companies. Related to company size and IT resources, smaller companies place less importance on metering usage, IT staffing efficiencies, governance, regulatory requirements, and the need to support numerous U.S. and worldwide locations than larger companies. This finding is probably a result of smaller companies not having the size and scope of larger organizations; thus, support for such an infrastructure is not required. However, it does point to the need for smaller companies to have some access to outside expertise for IT support and the cloud. Smaller companies rely on their suppliers for technical knowledge IDC #

8 IDC believes the operational and cost benefits of the cloud make the technology even more important to cost-conscious SMBs (particularly small offices). Since these businesses often do not have sophisticated IT departments (or may not have one at all), the opportunity for suppliers to provide the technical "know-how" to bring SMBs into the cloud marketplace is compelling. As noted in our research results, there are a lot of unknowns about the cloud that are causing SMBs to embrace cloud technology more slowly than their larger brethren. To gain this necessary expertise, smaller companies should look to suppliers that can help with the inevitable transition to the cloud. To help SMBs that are considering a cloud-based services model for their business, IDC offers questions and topics to discuss with technology suppliers. While large enterprises appear to be well on their way to moving forward with a cloud strategy, SMBs seem understandably less sure about making such a move. To help guide the discussion, we present some of the top-of-mind concerns expressed by survey respondents regarding cloud adoption (see Figure 5). Not surprisingly, many of the issues revolve around the technology's cost benefits, security, and IT governance requirements, including the impact on current IT infrastructure. The operational and cost benefits of the cloud make the technology even more important to cost-conscious SMBs (particularly small offices). FIGURE 5 Top-of-Mind Concerns About Cloud Adoption Q. What concerns are top of mind for you with respect to cloud adoption? Degraded network speed or overloaded provider systems could bog down system performance Cloud cannot support the operational requirements of critical applications Not enough ability to customize to our organization's needs Network infrastructure (routers/switching) limits on-demand model IT governance issues, particularly related to defining standard services and SLAs Regulatory requirements won't allow us to put systems and/or information outside of our direct control n = 433 Integration with in-house IT systems and management Keeping our systems and information outside of our firewall Internet access or service provider's systems will go down Will cost more than the traditional license/own model Not enough suppliers offering on-demand model Source: IDC's Cloud and Mobile Print Multiclient Study, (% of respondents) 2014 IDC #

9 Topics and questions related to cloud adoption and implementation to discuss with your technology supplier include: Proof that cloud implementation can work for your business. This may seem like an obvious point, but it is worth discussing how this new technology will benefit your customers. In this instance, we see customers as both internal (employees) and external (buyers of your goods or services) to your organization. Ask if they use these services in their own current business as well as in other businesses they may have owned in the past. You may also want to know the supplier's experience in providing cloud technologies to businesses similar to yours (e.g., customers within the same industry and/or customers with a similar number of employees or similar revenue). Cost impact. While cloud is touted to cut costs, there are a number of issues to consider that can impact your business from a bottom-line standpoint. Creating new business processes versus replacing existing business processes. Is this implementation a net-new capability for your company, or does it replace an existing process? If it is new, consider the benefits that can be gained by improving information access or other business process efficiencies, in addition to the direct cost of the service. If it is a replacement for an existing process, you should consider the soft cost savings often realized, such as reduced support and maintenance costs, software costs, and related equipment costs. Demonstration of cost savings. Related to proof that cloud can work for your business (as noted in the first bullet of this list), have your supplier detail the cost savings (e.g., hardware, software, maintenance) you can anticipate as a result of the implementation. Ask your supplier to share the cost savings experienced by other customers, either within your industry and/or with a similar number of employees or similar revenue. Security and general IT requirements. IDC's research has identified the threat of security, or lack thereof, as a commonly perceived concern for deploying solutions to the cloud. Ask your supplier to outline its security implementation approach in order to alleviate any concerns that you may have. Identify what you are comfortable with. You may want to implement cloud for some processes while keeping other processes inside the company. Talk to your supplier about which document types or business processes you might want to start to move off-premise and into the cloud. IDC's research has shown that companies of all sizes appear to be comfortable with moving , collaborative, and personal productivity applications to the cloud. On the other hand, our data shows that companies are less comfortable with the deployment of traditionally sensitive data such as finance or human resources to the cloud. As a result, you may want to consider cloud deployment in phases. Think about which business processes are priorities for current deployment and which could be deployed later on based on your company's comfort level. Know where your cloud-based business information is being hosted. This isn't necessarily a critical issue of needing to know the details, but it's your business information. You want to know where it is. Find out what happens when employees leave the organization. Suppliers should be able to address the issue of how sensitive company information remains within the company, even as employees come and go. You need to be assured that company information deployed to the cloud stays with the company and doesn't leave when employees leave the company IDC #

10 New cloud implementations need to integrate within your existing IT infrastructure. Key questions and issues for suppliers to address include: How well will the cloud solution integrate with the existing in-house IT systems and management? Does your network infrastructure (routers/switching) limit the on-demand (cloud) model, or could adoption result in degraded network performance (speed or overloaded provider systems)? The supplier should also be able to demonstrate that a cloud implementation will offer the benefit of simplifying future software deployments and/or upgrades for the company. The supplier should also articulate the specific impacts of this benefit for your business. What if the Internet goes down? Can cloud support the operational requirements of critical applications? Compliance. Are there any internal governance issues, particularly related to defining standard services and service-level agreements (SLAs), as well as external regulatory requirements for your particular business (e.g., HIPAA for healthcare) that should be considered before implementing a cloud-based solution? FUTURE OUTLOOK It's important to understand that cloud services are not an isolated IT growth segment but are part of a broader picture for future IT industry transformation and growth. Cloud is interconnected and accelerated by a number of IT forces, including mobile devices, wireless networks, "big data," 1 and social networking technologies. Together, these forces are creating another wave of IT growth. The last similar growth spurt occurred several years ago when the PC and other technologies such as LANs and relational databases combined to extend IT's value to many more users and uses. We anticipate that the cloud, along with mobile, wireless, "big data," and social networking technologies, will literally reach billions of users. According to IDC figures, approximately 2.8 billion people are already connected to the Internet (with nearly half through mobile devices). Just as significant, we expect that we'll also see trillions of smart devices connected to this platform. This will lead to an expansion of new applications and services built upon the evolving cloud platform. We believe that MFPs and other intelligent business devices such as interactive whiteboards and displays represent a few of the device types that will leverage the cloud and associated technologies. The MFP is in the midst of transforming from a "box" that produces hardcopy output to a comprehensive document processing unit for both paper and digital documents for businesses of all types. Most MFPs incorporate "smart" document platforms that facilitate both internal and external third-party software development to enhance the value of the MFP beyond paper-based output. The cloud provides another avenue of new capabilities for the MFP by enabling access to a broader range of content in such a manner. Interactive whiteboards and digital displays are also part of the business communication ecosystem that will leverage the cloud in the future. 1 IDC defines big data technologies as hardware and software technologies and architectures designed to extract value economically from very large volumes of a wide variety of data by enabling high-velocity capture, discovery, and/or analysis IDC #

11 IDC's wealth of research and market commentary on the cloud reveals the inevitability of the technology's role in the future computing environment. Customers' recognition of key cloud benefits revolving around cost, collaboration, increased access to business information, and overall efficiency gains is evident. While there are ongoing concerns around working within the current IT infrastructure, security, and costs, suppliers that can address and alleviate such worries stand to benefit as the market evolves toward the cloud and mobile platform. Customers who make the move to carefully begin implementing this new platform should expect to benefit from greater operational efficiencies and lower operational costs. Ultimately, this can be a win-win scenario for suppliers and customers alike. Customers who make the move to carefully begin implementing this new platform should expect to benefit from greater operational efficiencies and lower operational costs. Ultimately, this can be a win-win scenario for suppliers and customers alike IDC #

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