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PRESS RELEASE

Cloud usage now mainstream as benefits and barriers evolve – a third of businesses now see cloud as ‘critical'

IT decision makers say cloud has exceeded expectations and forecast further growth, according to the second instalment of Cisco's annual CloudWatch report

London, 27 June 2012 – New research published today by Cisco shows a dramatic shift in attitudes towards cloud in the UK and Ireland. The report Cisco CloudWatch 2012 is the second in Cisco's annual Cloud series and finds IT decision makers in bullish mood, increasingly placing applications and services from across their business into the cloud and planning for further investment over the coming 12 months.

Furthermore, the message that cloud can deliver significant cost reduction is now resonating with the IT community - cost saving has become a top driver for adopting cloud.

Security still remains the number one concern when putting services and applications in the cloud. But that concern is noticeably less pronounced than in last year's report and the use of public cloud is up 11 per cent, although private cloud still dominates. 

Key findings include:

  • IT decision makers say that cloud is now on their agenda - a resounding 90 per cent up from just 52 per cent in 2011
  • Of this number, 31 per cent consider cloud as being critical and underpinning much of the organisations' activity (this was just 7 per cent in 2011)
  • Of those organisations where cloud is on the agenda, 85 per cent are planning further investment in the next twelve months
  • In CloudWatch 2011, reducing cost ranked fifth in a list of most important things when considering cloud – in today's report it ranks as the number one priority
  • 20 per cent reduction in concerns over security (52 per cent in 2012 compared to 72 per cent in 2011)
  • 54 per cent of respondents currently use private cloud (up from 34 per cent in 2011) and public cloud usage is up from 18 per cent in 2011 to 29 per cent in 2012

Cisco commissioned independent research amongst IT decision makers across a broad range of vertical sectors including retail, finance, healthcare, public sector and service provider. The results clearly show that cloud has moved from hype to reality, with cloud now seen as a mainstream element of IT strategy.

Ian Foddering, Chief Technology Officer and Technical Director, Cisco UK and Ireland, commented on the findings: "This new report validates a shift that many of us in the IT industry have been witnessing first hand over the last 6-12 months. Cloud usage has now gone mainstream. After several years of ‘hype' across the IT industry, it now seems that cloud is maturing and organisations across a broad range of sectors are realising the benefits of moving to a cloud model.

Foddering continues, "Against this backdrop it's encouraging to see progressive companies realise the potential of cloud to revolutionise their respective industries. All these signs point towards a well-established market where the previously blurred boundaries of cloud computing are clearing. IT decision makers now more educated about the distinctions between cloud and managed services and more willing to invest."

Further analysis from Cisco's CloudWatch 2012 Report:

Cloud watching – from hype to reality – Amongst those who say cloud is critical to IT strategy, 52 per cent say cloud has actually exceeded their expectations, with only 4 per cent reporting that it has yet to deliver.

  • Retail and service providers are ‘trailblazers' when it comes to the strategic importance of cloud computing, (39 and 38 per cent respectively stating that cloud is critical to their organisations).              
  • On the contrary, Public Sector organisations see cloud as significantly less of a strategic priority than other industry sectors (24 per cent  Government and 18 per cent  Healthcare)

In terms of actual cloud deployment, the average proportion of IT applications and services in the cloud in 2011 was just 7 per cent.  This increased dramatically to 31 per cent in 2012.

  • Retail has shown the biggest leap – in 2011 it placed only 7 per cent of IT applications and services into the cloud, this has now jumped to 36 per cent, the highest of any vertical sector.

As in last year's survey, video conferencing and web conferencing together with email hosting, are seen as lower risk cloud options or suitable for all.  In two years' time, companies aim to have 52 per cent of IT applications and services in the cloud. Other signs of a maturing market are that ‘cloud blur' is clearing – with 72 per cent able to see a clear distinction between cloud computing and managed services (up from 46 per cent in 2011)

Cost efficiencies are still important – In CloudWatch 2011, reducing costs was the fifth most important benefit of cloud.  In 2012, this is the number one benefit (57 per cent), closely followed by easier maintenance (56 per cent) and then automatic updates (48 per cent).

Security and privacy concerns remain the biggest barrier to wider adoption of cloud, but are less pronounced barriers, as only cited by 52 per cent compared to 72 per cent in 2011. IT decision makers also expressed some concern about cloud creeping into the organisation outside of the IT department, over 30 per cent say that business departments within their organisation have used cloud services without informing the IT department.

Cloud formations – private versus public – CloudWatch 2012 found that more than half of organisations across all sectors currently use private clouds (up from 34 per cent in 2011), compared to 29 per cent for public clouds (up from 18 per cent in 2011), 16 per cent for hybrid clouds (18 per cent in 2011) and 14 per cent for community clouds (14 per cent in 2011). In five years' time, 54 per cent of businesses think private clouds will be the dominant cloud model in their sector (up from 47 per cent in 2011).

Focus on: Big Data - Big Data has been a hot topic in the IT landscape this year. A designated section of the CloudWatch report looks at how companies are grappling with multiple pillars of IT strategy – including keeping pace with changing IT security demands on the business (71 per cent), improving the quality of business applications delivery to the business (70 per cent), creating greater levels of end user mobility / remote access (70 per cent).

As far as data analytics is concerned, companies are most interested in getting access to data in real time (54 per cent), accessing data from multiple devices (51 per cent) and accessing data from remote / flexible locations (44 per cent).  Yet, getting access to data in real time emerges as the biggest challenge for companies (52 per cent) along with speed of data delivery (50 per cent). 43 per cent think that data analytics could be improved in their organisation if it were part of cloud services delivered with third-party expertise.

A full copy of the Cisco CloudWatch Report is available for download at:

http://www.cisco.com/cisco/web/UK/assets/cisco_cloudwatch_2012_2606.pdf

 

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate.  Information about Cisco can be found at http://www.cisco.com.  For ongoing news, please go to http://newsroom.cisco.com.

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Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S.  and other countries.  A listing of Cisco's trademarks can be found at www.cisco.com/go/trademarks.  Third-party trademarks mentioned are the property of their respective owners.  The use of the word partner does not imply a partnership relationship between Cisco and any other company.

Research Methodology

Cisco commissioned Loudhouse, an independent market research consultancy, to conduct a comprehensive telephone survey amongst 250 IT decision makers in large UK companies across five key sectors about their current attitudes and approaches to cloud computing, with a particular focus on cloud growing pains and the factors impacting cloud growth at a sector level.  The five sectors polled in the research were Government (national and regional), healthcare, retail, finance and service providers (including telecoms operators, media and broadcast companies). 

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