Ascending cloud: The adoption of cloud computing in five industries

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  • A report from The Economist Intelligence Unit

    Sponsored by

    Ascending cloud: The adoption of cloud computing in five industriesExecutive summary

  • The Economist Intelligence Unit Limited 20161

    Ascending cloud: The adoption of cloud computing in five industriesExecutive summary

    Introduction 2

    Cloud computingfindings for all industries 3

    Manufacturinga special case of cloud adoption 8

    Contents

  • The Economist Intelligence Unit Limited 20162

    Ascending cloud: The adoption of cloud computing in five industriesExecutive summary

    A new report published today March 1, 2016 by

    The Economist Intelligence Unit (EIU), sponsored

    by VMware, predicts that cloud computing will

    grow at a rapid pace to become a factor in the

    digitisation of major industries.

    Cloud computing has strong growth potential,

    with only 7% of all IT and business executives

    surveyed believing it currently has a pervasive

    presence across all industries.

    However, a diverse range of global executives

    predict the rapid growth of cloud in five key

    industries: banking, retail, manufacturing,

    education and healthcare. Approximately

    70% of panelists expect cloud will be a major

    factor across their own industry in five years.

    Across all industries, the greatest challenges

    were seen to be ensuring data security (47% of

    all executives) and finding qualified personnel

    to build out and operate cloud systems (35%).

    Ascending cloud: The adoption of cloud

    computing in five industries, sponsored by

    VMware, is based on a global survey of 360 senior

    executives who are familiar with cloud computing

    in their industry and country. The sample was

    comprised of senior executives, with over half of

    them from the C-Suite of their companies or

    non-profit organisations. The panel was divided

    equally into sub-panels representing the banking,

    retailing, manufacturing, education and

    healthcare industries. Developed and developing

    countries were equally represented in the survey.

    For the full report, which contains an analysis of

    manufacturing, click here. Please click here for

    the reports on healthcare and continuing

    education.

    The following is a summary of the key findings of

    the report. For further information, please contact:

    West Coghlan

    Senior Editor, Technology

    Economist Intelligence Unit

    westcoghlan@economist.com

    Introduction

    http://www.eiuperspectives.economist.com/technology-innovation/ascending-cloud-adoption-cloud-computing-five-industries-0http://www.eiuperspectives.economist.com/technology-innovation/ascending-cloud-adoption-cloud-computing-five-industries-0http://www.eiuperspectives.economist.com/technology-innovation/ascending-cloud-adoption-cloud-computing-five-industries-0/article/ascending-cloud-role-cloud-computing-new-doctor-patient-relationshiphttp://www.eiuperspectives.economist.com/technology-innovation/ascending-cloud-adoption-cloud-computing-five-industries-0/article/ascending-cloud-role-cloud-computing-continuing-education

  • The Economist Intelligence Unit Limited 20163

    Ascending cloud: The adoption of cloud computing in five industriesExecutive summary

    1. Current presence of cloud computingOn a global basis, cloud is seen as having a significant current presence (43%), but with significant

    potential to grow (only 7% of respondents said cloud was pervasive at the current time).

    Current rates of cloud penetration differ by industry. Information-based industries such as banking

    lead in penetration, while physical industries such as manufacturing and regulated ones like

    healthcare and education appear to be adopting cloud more slowly.

    Cloud computingfindings for all industries

    Source: EIU Survey Cloud Computing and Economic Development, October 2015

    Banking Retail Manu-facturing

    Education Healthcare Industry average

    Pervasive presence Significant presence

    How would you characterise the current presence of cloud in the following industries?% of respondents reporting a significant or pervasive presence

    52

    757

    1

    42

    7

    34

    10

    31

    843

    7

  • The Economist Intelligence Unit Limited 20164

    Ascending cloud: The adoption of cloud computing in five industriesExecutive summary

    2. The growth of cloud across all industries

    Cloud is expected to grow rapidly from this

    relatively low base. Almost 70% of panelists

    believe that cloud computing will be a major

    factor across all surveyed industries in five years.

    3. The challenges of cloud

    The deployment of cloud is seen to have

    significant challenges. As is the case in many parts

    of the technology industry, data security is held to

    be the greatest challenge to the deployment of

    cloud. Poor infrastructure was seen as a particular

    challenge in developing countries. The availability

    of qualified personnel is seen as a challenge

    across industries on a global basis.

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Major factorModerate factor

    Rate of cloud penetration% saying cloud will be a moderate or major factorAverage of all industries

    In one year

    In three years

    In five years

    47

    19

    40

    43

    21

    69

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    What are the greatest challenges to cloud?In order of importance (% respondents)

    Hacking, cyber-crime and cyber-espionage

    Poor infrastructure

    Qualified personnel

    Consumer resistance

    Foreign competition

    Lack of entrepreneurs

    Poor education system

    Vested interests

    Lack of capital

    Competes with existing business

    Government regulation

    47

    37

    36

    29

    29

    28

    26

    25

    22

    20

    15

  • The Economist Intelligence Unit Limited 20165

    Ascending cloud: The adoption of cloud computing in five industriesExecutive summary

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Major factorModerate factor

    Future cloud penetration of the retail industry% saying cloud will be a moderate or major factor

    In one year

    In three years

    In five years

    57

    1443

    41

    23

    70

    4. Cloud computing and banking

    There is an expectation of rapid adoption of

    cloud in bankingalmost three out of four predict

    cloud will be a major factor in banking in five

    years. Cloud is expected to be deployed to

    support a range of banking products, and to

    enable the extension of banking services to poor

    and remote populations.

    5. The impact of cloud on the retail industry

    Our retail experts expect a similar pattern of rapid

    cloud penetration in the retail industry, with 70% of

    panelists expecting cloud to be a major factor in

    the industry in five years. From a relatively modest

    base, the expectation is that cloud will grow

    five-fold as a major factor in retailing. One of the

    impacts of cloud appears to be making retailing

    more consumer-friendly, as a technology being

    used to increase access, lower prices and

    reducing costs for the customer.

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Major factorModerate factor

    Future cloud penetration of the banking industry% saying cloud will be a moderate or major factor

    In one year

    In three years

    In five years

    52

    19

    53

    36

    15

    74

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Very importantSomewhat important

    How important is cloud in supporting sectors of the banking industry?% saying cloud will be somewhat or very important

    New ways to make payments

    Lowering banking costs

    Banking for remote populations

    New ways of saving

    Banking for poor populations

    New ways of lending

    68 21

    60 32

    57 34

    50 45

    43 42

    42 47

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Very importantSomewhat important

    How important is cloud in supporting sectors of the retail industry?% saying cloud will be somewhat or very important

    Reducing costs of goods and services

    Helping new companies grow

    Increasing access to retail

    Making goods more available

    Making shopping more convenient

    58 33

    49 45

    48 41

    43 44

    40 51

  • The Economist Intelligence Unit Limited 20166

    Ascending cloud: The adoption of cloud computing in five industriesExecutive summary

    6. The impact of cloud on manufacturing

    Manufacturing is expected to experience a high

    rate of cloud penetration, with 71% of panelists

    projecting it will be a major factor in the industry in

    five years. Cloud is expected to impact each

    stage of the manufacturing value chain, from

    suppliers to distribution to customers.

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Major factorModerate factor

    Future cloud penetration of the manufacturing industry% saying cloud will be a moderate or major factor

    In one year

    In three years

    In five years

    46

    15

    43

    43

    21

    71

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Very importantSomewhat important

    How important is cloud in supporting sectors of the manufacturing industry?% saying cloud will be somewhat or very important

    Supporting production processes

    Better supply chain management

    Enabling design and prototyping

    Inventory, orders and distribution

    60 30

    54 35

    52 39

    48 40

    7. Cloud computing and education

    Education shows a somewhat slower initial

    adoption rate than other industries, but with

    acceleration in the 3-5 year timeframe. Possible

    reasons include a less competitive environment

    and traditionally slower rates of technology

    adoption by government.1 Cloud is expected to

    impact all sectors of education, but with the

    greatest impact on higher education.

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Major factorModerate factor

    Future cloud penetration of the education industry% saying cloud will be a moderate or major factor

    In one year

    In three years

    In five years

    55

    20 29

    47

    18

    67

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Very importantSomewhat important

    How important is cloud in supporting sectors of the education industry?% saying cloud will be somewhat or very important

    Higher education (university)

    Education for remote areas

    Continuing/adult education

    Mid-level students (ages 11-17)

    Education for low-income

    Educating young students (ages 3-10)

    51 34

    42 38

    40 44

    40 46

    34 42

    25 481. Information Week, Public

    Sector Slow to Adopt Cloud Computing, June 2012

  • The Economist Intelligence Unit Limited 20167

    Ascending cloud: The adoption of cloud computing in five industriesExecutive summary

    8. Cloud computing and healthcare

    Cloud is expected to become a major factor in

    healthcare by 61% of healthcare experts. Cloud is

    geared to support remote diagnostics and

    treatment, helping to empower the patient with

    knowledge of their own condition. It may also

    support the extensive data requirements of

    preventative care, supporting a long-term industry

    goal of holistic medicine.

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Major factorModerate factor

    Future cloud penetration of the healthcare industry% saying cloud will be a moderate or major factor

    In one year

    In three years

    In five years

    26

    25

    32

    49

    28

    61

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    Very importantSomewhat important

    How important is cloud in supporting sectors of the healthcare industry?% saying cloud will be somewhat or very important

    Centralisation of health records

    Supporting preventative care

    Care for low-income populations

    Supporting remote diagnosis

    Supporting remote treatment

    57 27

    53 32

    45 35

    44 32

    43 37

  • The Economist Intelligence Unit Limited 20168

    Ascending cloud: The adoption of cloud computing in five industriesExecutive summary

    1. Cloud and the manufacturing supply chain

    Cloud will have a strong impact on supply chain

    management, with 89% of manufacturing experts

    saying cloud will be somewhat or very important.

    Interviews with experts identified cost reduction,

    expanding the base of suppliers and the ability to

    track shipments as areas where cloud may make

    a contribution.

    Our panelists were asked for their views on which industry will have most impact on economic growth. By

    a sizeable margin, manufacturing was expected to make the greatest contribution to economic

    prosperity. With this in mind, a deeper analysis was made of the impact of cloud on manufacturing. The

    manufacturing sub-panel was asked to assess clouds impact on four key stages in the manufacturing

    value chainsupply chain, design and prototyping, production and distribution to customers.

    Manufacturinga special case of cloud adoption

    Which sectors will drive economic growth?Which of the following do you feel will have the greatest impact on your countrys overall economic prosperity in the next three years? (% respondents)

    New forms of manufacturing through new technologies

    New forms of education through new technologies

    New forms of retailing through new technologies

    New forms of banking through new technologies

    New forms of healthcare through new technologies

    28

    20

    20

    18

    13

    Source: EIU Survey Cloud Computing and Economic Development, October 2015

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    What will be the importance of cloud in manufacturing supply chain in one years time?(% respondents)

    1 10

    3554

    Very unimportant

    Somewhat unimportant

    Somewhat important

    Very important

  • The Economist Intelligence Unit Limited 20169

    Ascending cloud: The adoption of cloud computing in five industriesExecutive summary

    2. Cloud and design and prototyping

    90% of manufacturing experts predict cloud will

    be somewhat or very important in the design and

    prototyping stage of manufacturing. They

    identified cost reduction, acceleration of time to

    market and product customisation as activities

    that could become cloud-enabled.

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    What will be the importance of cloud in manufacturing design and prototyping in one years time?(% respondents)

    4 6

    3951

    Very unimportant

    Somewhat unimportant

    Somewhat important

    Very important

    3. Cloud computing and manufacturing production

    Cloud will also have a significant impact on the

    production phase, with 90% of manufacturing

    experts saying cloud will be somewhat or very

    important. Manufacturing experts identified

    increased operating efficiencies and boosting

    manufacturing flexibility as processes that cloud

    could support.

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    What will be the importance of cloud in manufacturing production in one years time?(% respondents)

    4 6

    30

    60

    Very unimportant

    Somewhat unimportant

    Somewhat important

    Very important

    4. Cloud and the manufacturing customer

    88% of manufacturing experts believe that cloud

    will be somewhat or very important in the

    distribution and customer relationships stage of

    manufacturing. Manufacturing experts identified

    increased visibility into shipments and increased

    partnerships between suppliers and customers as

    two areas that might be supported by cloud

    computing.

    Source: EIU Survey Cloud Computing andEconomic Development, October 2015

    What will be the importance of cloud in manufacturing distribution...