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Page 1: Ascending cloud: The adoption of cloud computing in five industries

A report from The Economist Intelligence Unit

Sponsored by

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

Page 2: Ascending cloud: The adoption of cloud computing in five industries

© The Economist Intelligence Unit Limited 20161

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

Introduction 2

Cloud computing—findings for all industries 3

Manufacturing—a special case of cloud adoption 8

Contents

Page 3: Ascending cloud: The adoption of cloud computing in five industries

© 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

[email protected]

Introduction

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© 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 computing—findings 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

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© 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

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© 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 banking—almost 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

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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

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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

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© 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 cloud’s impact on four key stages in the manufacturing

value chain—supply chain, design and prototyping, production and distribution to customers.

Manufacturing—a 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 country’s 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 year’s time?(% respondents)

1 10

3554

Very unimportant

Somewhat unimportant

Somewhat important

Very important

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© 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 year’s 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 year’s 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 and customer relationships in one year’s time?(% respondents)

1 10

40

48

Very unimportant

Somewhat unimportant

Somewhat important

Very important

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© The Economist Intelligence Unit Limited 201610

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

Whilst every effort has been taken to verify the accuracy

of this information, neither The Economist Intelligence

Unit Ltd. nor the sponsor of this report can accept any

responsibility or liability for reliance by any person on this

report or any of the information, opinions or conclusions

set out in the report.

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