“Doing Cloud” vs “Thinking Cloud” Separates True Believers in Digital Transformation— New Research from Everest Group

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Enterprises move beyond typical cloud-based delivery model to adopt cloud as disruptive platform for “as-a-service” agenda.

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Truly successful digital businesses will have to transform applications, infrastructure, and organizational culture to drive growth as well as internal efficiencies.

When it comes to the IT mantra “cloud is critical,” some enterprises are true believers and others are not, at least not yet. New research from Everest Group finds that around 86 percent of enterprises consider cloud to be the critical component of digital transformation; however, only 60 percent of enterprises consider cloud services among their “top 3” investment priorities. This discrepancy suggests that “thinking cloud” and “doing cloud” are two very different things and that enterprises are at different maturity levels from a cloud-adoption perspective, especially with respect to driving digital transformation.

Everest Group predicts the cloud services market will grow nearly 25 percent CAGR between 2015 and 2020 as enterprises demand more value from cloud services, insisting on leveraging cloud as the core platform to drive strategic business initiatives. Increasingly, enterprises will be less concerned about the cloud platform or deployment model and its technological superiority, and more concerned about leveraging cloud to drive an “IT-as-a-Service” consumption model that goes beyond provisioning of infrastructure services.

“Cloud is critical for IT-as-a-Service but requires a broader agenda beyond cloud infrastructure. Although nearly 90 percent of cloud deals have an IaaS component, less than half of them can be termed as “transformational”,” said Chirajeet Sengupta, vice president at Everest Group. “Truly successful digital businesses will have to transform applications, infrastructure, and organizational culture to drive growth as well as internal efficiencies. Focusing on just one aspect will result in sub-scale adoption and value loss for the business. Likewise, cloud service providers need to think beyond infrastructure and keep the broader business transformation priorities in mind.”

Other findings in the research:

  • Private cloud deployments will lead growth, given enterprises’ emphasis on hybrid cloud services
  • Around 20 percent of infrastructure global services engagements include cloud-delivered services.
  • In terms of buyer adoption, the retail industry led others, almost doubling its contribution to overall engagements.
  • North America and United Kingdom contributed around 55 percent of cloud engagements.

These research findings are summarized in a set of high-resolution graphics available for complimentary download here. These Market Insights™ illustrate key takeaways from Everest Group research on the cloud services market, which includes detailed analysis of market size and growth estimates, deal size, cloud deployment trends, buyer adoption trends and the outlook for 2016-2017. These Market Insights graphics may be included in news coverage, with attribution to Everest Group:

  • The global cloud services market 2016: A snapshot
  • The role of cloud in enabling a digital business
  • Infrastructure transformations leaving applications behind
  • Cloud services augment infrastructure

***Complimentary Download of Report Preview***
The research supporting these Market Insights graphics is summarized in a preview report, “Enterprise Cloud Services – Annual Report 2016: Cloud the Bedrock of Digital Business,” which is available for complimentary download here.

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.everestgrp.com and research.everestgrp.com.

Andrea M. Riffle, Everest Group

Jennifer Fowler, Cathey Communications for Everest Group

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Andrea M. Riffle

Robert Cathey
Cathey Communications
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