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Less Than Half of European Enterprises Are Ready for Cloud

October 01, 2014

Much of the talk in the IT industry has been about the need to transform the data center and the technologies that are coming to market to accelerate the transformation. However, a big question is overhanging the market. That question is, “Are enterprises are actually ready to transform their data centers?”

This question was asked directly as part of the recent International Data Corporation (IDC) CloudTrack Survey which queried IT and non-IT staff at director level or above in 1,109 organizations globally, including 304 in Europe (100 in the U.K. and 102 in both France and Germany). What the survey found was, to say the least, enlightening - particularly as it pertains to Europe. In fact, what it found was that IT departments still need to make significant improvements before they fully embrace cloud architectures and transform themselves into internal (cloud) service providers.

When asked to evaluate their current readiness to execute on their cloud strategy, European respondents admitted to unexpectedly low levels of confidence:

  • 56 percent of European IT departments cannot find qualified staff to effectively support cloud projects.
  • 61 percent are struggling to up skill their employees to effectively evaluate, negotiate contracts with, and manage relationships with cloud service providers.
  • 70 percent still need to learn how to make effective use of automation, self-service, and orchestration tools.

In short, the survey confirmed researcher suspicions based on anecdotal evidence that the vast majority of European IT departments still require a great deal of transformation and need to invest further in people, process, and technology to mature their cloud architecture.

"The use of cloud computing as an increasingly business-critical technology is quickly changing how companies and institutions evaluate, procure, and deploy IT assets," said Carla Arend, program director of IDC's Cloud Practice. "However, the effective use of automation, self-service, and orchestration tools remains the biggest challenge for IT organizations, while accurately defining costs and implementing chargeback models is a struggle in the business and IT relationship. The transition to cloud computing requires change throughout the organization — in people, process, and technology."

"Spending on cloud services and building blocks for cloud environments has seen strong 25 percent growth in Europe over the past 12 months, but the push from service providers might start running out of steam in the coming years if IT buyers and line-of-business owners are not assessed in their cloud maturity level and then helped to systematically tackle hurdles to adoption," said Giorgio Nebuloni, research manager, IDC's Cloud Practice.

There were a few other finds that were noteworthy. These include:

  • IT organizations see themselves as service providers focused on business priorities. Almost half of the respondents have achieved this change in mindset, where IT departments have embraced the IT-as-a-service approach and are ready to negotiate service levels and serve their business users like a service provider. Only 5 percent of respondents do not have this major transformation as an area of focus.
  • Return on investment remains difficult to prove. Only around a third of European organizations are able to build a comprehensive business case for their cloud projects. Understanding all the implications, costs, and benefits of a transformational process like implementing cloud computing is tough, but without creating solid business cases it is hard to demonstrate the ultimate success of cloud projects.
  • Ability to use cloud to drive business innovation and competitive advantage remains elusive as 41 percent of respondent say they are using the cloud to gain a business advantage. As IDC notes, this leaves 59 percent of European organizations not able to take cloud projects beyond the level of IT infrastructure projects. The real benefits of cloud projects will only be realized if they are used to drive business innovation and competitive advantage.

IDC , in revealing the findings, also made note of a new study, IDC MaturityScape: Cloud — A Guide for Success in Europe, which provides more detailed analysis of the survey results.  It also, as a follow-on, has developed a quantitative methodology to assess organizational cloud maturity.  

The good news for vendors seeking to help IT organizations transform their data centers is that the survey found that not just in Europe, but globally, there is significant opportunity. What it means is that there remains much work to be done by vendors in terms of education and building the business cases for IT so they can convince executives in the rest of their organization and get their buy-in, that data center transformation can, and should, be a core foundation for achieving long-term business success. 

Edited by Stefania Viscusi

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