Why Enterprise Cloud Adoption is Seeing a Rapid Surge?

by August 17, 2020

Cloud Computing

Companies across industries will allocate one-third of their IT budgets to the cloud by 2021.

Cloud computing has a significant role to play in businesses across diverse industries. It helps industry players to respond to the current competitive environment as cloud platforms enable operational resiliency and provide necessary tools. These platforms also provide businesses with an alternative to develop their in-house infrastructure. They also allow enterprises using the internet to realize the capabilities for scalable computing power on a plug and play basis. As the pandemic induced by COVID-19 is rapidly expanding, most organizations now are seeking to drive agile services to become resilient during this uncertain time.

In a recent IDG survey on Cloud Computing, 81 percent of organizations participated in the survey are already using computing infrastructure or having at least one application in the cloud. This trend is up from 73 percent in 2018. On the other side, another 12 percent of organizations plan to adopt cloud-enabled applications within the next 12 months, while 6 percent have reported doing so in the coming 1 to 3 years.

The survey fundamentally quantifies the rate of enterprises that are shifting services and applications to the cloud. It is found that companies’ average cloud spending is up 59 percent from 2018 to US$73.8 million in 2020. Besides, the adoption rate of the cloud has reached over two-thirds in every industry, with higher adoption, 88 percent, in education. The adoption rate is followed by manufacturing with 87 percent, healthcare with 86 percent, while the adoption in financial services is 75 percent, with 71 percent in government and non-profit organizations.

There is no wonder that the cloud infrastructure is continuously dominating the enterprise world, saving organizations from investing and maintaining costly infrastructure. This is why most businesses are observing cloud as a cost-effective platform, expecting to invest 32 percent of their total IT budget to this tech in 2021, up from 30 percent in 2018.

Significantly, the outbreak of COVID-19 has disrupted all aspects of businesses, forcing them to revisit and evaluate their business functions using advanced technologies. As per IDC’s COVID-19 Impact on IT spending Survey in May 2020, around 64 percent of organizations in India are expected to fuel demand of cloud services in their response to the new normal. Significantly, the crisis has caused the way businesses function, given the rise of work from home or remote work model. However, as employees use local networks or internet connections for their system access, they pose a threat challenge. This is reinforcing the demand for SaaS-based collaborative apps to ensure on and off-site presence at all the times and zero-disruption to business.

This will also augment the need for remote support services, both human professional services and cloud software, specifically security or identity. Essentially, the demand and adoption of VPNs, collaboration suites, end-point encryption, and cloud platforms and tools will see huge uptake.

In this crisis time, companies are not only looking to secure their business workflows but also achieve business continuity. Thus, using cloud-enabled offerings give enterprises a cost-effective way to maintain high availability and reliability for user applications, particularly to support mobile workers, telecommuters, or field-based workforces.