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The Status of Cloud Adoption in the UK – CloudWatch Market Research Report

November 4, 2011
at 11:47 am PST

A few weeks back, Cisco in  the UK released a report on the status of cloud adoption in  the UK -- based upon market research by an independent market research consultancy.  This report covered multiple customer segments, including retail, finance, public sector, service provider and others. I though many people across the world would be interested in some of the fascinating fact and figures, and conclusions, from this report.  Market research is a key part of my role, and last year I blogged on some market research I did on cloud a while back (here and here).  As a result I’m always interested in good pieces of market research, of which this “CloudWatch” report is an excellent example.

In this blog, I’ll point you to the full report and summarise and comment on some of the key conclusions.

If you’ve read some of my previous blogs, you’ll have seen that I work on our Cisco Cloud Enablement Services, our family of professional services offerings that have and are helping many customers across the world develop their cloud strategies, and realise their cloud computing architectures.  These services are illustrated below, and include the recently announced Cloud Optimization Service.

Cisco Cloud Enablement Services - including the recently announced "Cloud Optimization Service"

You can find the CloudWatch report here.  I’d like to thank the Cisco UK CTO, Ian Foddering and team for sponsoring this research and for the tremendous insights this gives us all.   Again, please note that it’s based upon the UK market -- your country may have different adoption rates. Please reply to this blog post and tell me what you found both least and most surprising.  If you are based in the UK, what surprised you about this report.  If you are from another country, anywhere in the world, I’d love to hear if you see different trends -- thanks!

Below are some of the conclusions from this report that I found particularly interesting.  I am sure you will find this UK CloudWatch report interesting.

General Highlights

  • Cloud is on the IT agenda for just over half of all companies (52%) but is only considered critical by 7% of organisations.  This 52% figure is not too different to similar data I reported a year ago from the cloud survey I ran with our customer base, which is surprising -- I would have expected this figure to have increased over time to be honest.
  • 52% would welcome support from vendors in helping them develop cloud strategy.  That”s terrific since the Cisco Cloud Strategy Service, part of Cisco Cloud Enablement Services, is aimed at helping our customers do exactly this!
  • Currently an average of 7% of all IT applications / services are in the cloud, with companies looking to increase this to 23% over the next 2 years.  That’s also an area of great importance in our team -- with our Cisco Application Migration Services
  • In the report it was found that more than half (56 per cent) of Government and healthcare IT decision makers have revealed that the impact of impending cuts will encourage the adoption and roll-out of Cloud computing across the public sector.  Certainly our local account teams in Cisco UK are seeing public sector organizations evaluate cloud computing -- and in cases some envisage themselves being a cloud provider for other similar public sector organizations.

Government falling behind on Cloud adoption

  • Government organisations are the farthest behind of all sectors polled when it comes to the current adoption of Cloud technology, according to the CloudWatch Report, although 50 per cent of Government organisations said cloud was part of their IT strategy
  • The most popular Cloud technology applications already adopted by Government organisations to date are payroll (10 per cent) and HR (also 10 per cent)
  • However, 50 per cent plan to invest in web conferencing via the Cloud within the next 12 months, with a further 42 per cent looking at the same timeline of investment for video conferencing and VoIP services

Healthcare looks to the Cloud for video collaboration

  • IT managers in healthcare revealed themselves to be leading a video conferencing revolution, with 14 per cent of those asked saying that they had already invested in such technology via the Cloud, more than their peers in Government (6 per cent), retail (10 per cent) or even financial services (10 per cent)

Financial Services

  • In the CloudWatch report, it was found that better control of costs is the biggest draw for IT decision makers (72 per cent) in the financial services industry to adopt Cloud computing technologies over in-house IT or managed services, more so than any other industry polled
  • Easier maintenance and automatic updates (72 per cent) was also a key benefit, but concerns over the location of data (70 per cent) and compliance issues (68 per cent) were highlighted as barriers preventing any further adoption by the industry

Service Providers

  • Cisco’s CloudWatch report found that UK service providers, including telecoms and mobile operators, media and broadcast companies, are leading Cloud computing adoption in the UK
  • Having already invested in Cloud more than any other sector polled, the most popular technologies currently invested in by service providers were unified communications (20 per cent), web and video conferencing (18 per cent), and email hosting (16 per cent)
  • Service providers were far less concerned about security and privacy issues around Cloud adoption, with only 60 per cent of those asked raising it as an issue compared with 82 per cent of healthcare organisations and 86 per cent of Government respondents

Retail

  • Video conferencing is at the top of the agenda for UK retailers looking to invest in Cloud computing over the next 12 months, with 38 per cent revealing that they planned to join the one in 10 (10 per cent) of retail organisations that have already invested in video
  • Cisco’s CloudWatch Report has found that improved communication is the biggest draw for IT decision makers in retail, with collaboration (72 per cent) cited as the biggest benefit for adopting Cloud technologies by those polled
  • Aside from concerns over security and privacy, an issue for seven in 10 (72 per cent) retailers, anxieties around cost savings and ROI (66 per cent) were the most notable hurdles being faced by IT managers looking at adopting Cloud computing in retail, more so than any other industry surveyed
As I said above, fascinating stuff!  What I found particularly interesting was the focus on different cloud “use cases” or applications across the various customer segments.

To conclude, please reply to this blog post and tell me what you found both least and most surprising.  If you are based in the UK, what surprised you about this report.  If you are from another country, anywhere in the world, I’d love to hear if you see different trends -- thanks!  And if you need assistance with your cloud computing projects, talk to your Cisco account manager about Cisco Cloud Enablement Services!

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5 Comments.


  1. Ive found that a lot of people don’t fully understand what a cloud based service can do for them, or their expectations are too high. People are also scared that their data may be “stolen” as well.

    Its really case by case, some people are for it 100%, some people are against, but mainly because of their lack of knowledge.

       1 like

    • Stephen Speirs

      Good points, Christian – thanks for taking the time to respond. Data protection and privacy came out strongly in the study. And knowledge/awareness is usually a challenge in any new approach or technology.

         0 likes

  2. Steve, great update. Thanks!

    What type of customers are UK SPs targeting to onboard? Are the strategies of taking on large enterprise workload taken by some of the large SPs out there working?

    Omer

       0 likes

    • Stephen Speirs

      Hi Omer

      Thanks for the feedback. First, by on-boarding, I presume you mean how are the SPs transitioning their end customers from their traditional environment to a cloud-based solution?

      Ob-boarding of end customers into the SP cloud is certainly a challenging area for SPs. In some cases we are seeing some SPs discuss the transition of some quite complex environments into the SP cloud. For example, SAP as a cloud service is being discussed as a requirement by some end customers. It’s no longer the relatively straightforward “Compute as a Service” (CAAS) cloud service that customers are looking at – they are considering now, as the cloud matures, how they can leverage the cloud for such more complex environments.

      So in such cases, the SP has I have to say a tougher job to on-board such customers. They have to look at the end customer environment, perhaps assessing applications which are not yet virtualised, and putting in place a plan to virtualize these and transition both the application and data to the secure SP cloud. Some of our specialist services partners are working in collaboration with both Cisco in EMEA and also with some of our key SP customers to help the SP’s end customers into their cloud. For example, Glasshouse (www.glasshouse.com) are a specialist partner we in Cisco EMEA work with closely to co-deliver complex services engagements. We’ve partnered with them in VDI, Data Center Migration and now Cloud engagements so that together, we can bring together a wider range of services capabilities, and more expert resources, to our joint customer base. Ob-boarding is one area in which Glasshouse have both specialist expertise and also tools to help the migration process. They have a tool called “Reflector” that they have designed to support their engagements, that can help with the complex project planning around migration to the cloud.

      Hope this helps. What kind of on-boarding issues of enterprise customers into the SP cloud to you see, and what kind of help from Cisco do you think we should be providing to help here?

      Thanks again
      Stephen

         0 likes

      • Stephen Speirs

        Hi Omer,

        I just came across an interesting data point to back up your concern here. Current Analysis ( http://www.currentanalysis.com/ ) just published a report “Cloud Computing Usage and Prospects in Asia-Pacific” last week (10 November 2011)

        In this, they cite(from their survey of 300 end user interviews), that just over 10% were concerned about the costs of migrating into the cloud. This places this issue as #3 (equal) top concern impact the end user adoption of cloud (behind #1 security and #2 reliability).

        Good report from Current Analysis, definitely worth reading.

        Stephen

           0 likes