2017 Was The Year That Cloud Became The New Normal, So Why Are Some Industries Refusing To Look Skyward?
In insight / By Hollie Coote / 19 February 2018
According to research conducted this year, worldwide revenue from cloud services is set to grow to over $200 billion by 2020, but some sectors are still dragging their feet when it comes to the cloud.
In January this year, the Synergy Research Group conducted a study which predicted continued growth for cloud services worldwide. John Dinsdale, chief analyst and research director commented, “we tagged 2015 as the year when cloud became mainstream and 2016 as the year when cloud started to dominate many IT market segments. In 2017 cloud was the new normal.” So if cloud really is “the new normal” then why are some industries still struggling to make the switch?
Taking a closer look at the UK using research from the Cloud Industry Forum (CIF), it seems that for the most part, we are following the global trend, with the overall cloud adoption rate in the UK now at a whopping 88%. Interestingly, the results revealed that the most significant increase in UK cloud adoption was among SMEs, with adoption rates now standing at 82%. This could be due to the fact that SME’s will often not want to spend the capital on expensive hardware, leading them to choose cloud solutions from the start.
Over half of the respondents to the CIF survey described their organisation as having a Hybrid approach to IT and 54% expected to eventually move their entire IT estate to remotely hosted cloud services. The benefits of moving to the cloud have been discussed time and time again but it seems that larger companies, especially in the Transport, Retail, and Construction sectors, are struggling to let go of their hardware.
Looking at data collected from 2014 & 2016 by Eurostat, it’s clear to see the divide between industries in their cloud use. Although there was positive growth in cloud adoption across all sectors from 2014-2016, Retail, Construction & Transport are all still lagging behind software savvy industries like IT, Science & Technical Services despite the benefits that moving to the cloud can offer.
Figure 2 Figure 1 Use of cloud computing services, by economic activity and size, EU-28, 2014 and 2016 (% of enterprises)
Transport & Storage
The transport and storage sector covers a wide variety of businesses and organisations, however, they all have the same basic needs when it comes to the cloud. They all want to be able to react and adapt quickly to information, giving them an edge over the competition. Cloud-based solutions give them the capabilities to do this no matter the size of the organisation.
Reactivity – Having access to real-time information from GPS systems, warehouses and staff enables companies to react quickly to any changes. Being able to identify and communicate route changes, inventory location and staff availability are key for the storage and transportation industry.
Connectivity – With the development of the internet of things, smart warehouses can save time and money by automatically alerting staff to product shortages, storage availability or security breaches. By connecting everything through the cloud, organisations are saving time and money through better communication and planning.
Despite huge multinational corporations like Netflix and Amazon singing the praises of cloud solutions, the rest of the sector is yet to catch up, with established retailers and brick and mortar operations still failing to utilise all of the benefits that cloud offers.
Scalability – For retailers with an online presence, the scalability of cloud solutions should be a huge pull. Some retail businesses rely on the scalability of the cloud to cope with seasonal fluctuations in trade, others utilise it when running promotions or offers. The extra capabilities without the expensive outlay have proven to be popular with smaller retailers trying to compete with big corporations.
Personalisation - Using high-quality CRM software in the cloud provides much deeper insights into consumer behaviour and preferences. Retailers are using these insights and analytics to create personalised shopping experiences for their customers. Useful POS features such as personalised product recommendations and information keep customers happy and ensure the best customer service experience without extra staff training and effort.
Construction is widely seen to be a technophobic sector, and for many in the industry, just the thought of going digital can cause palpitations. For the construction sector, there are so many benefits of moving to a cloud-based way of working. Although rolling out solutions across multiple sites and locations isn’t an easy feat, it can streamline processes, increase productivity and improve communication.
Accessibility – Switching to the cloud means that all aspects of the business can stay connected in real time. Everyone can access documents from wherever they are, making business on the move easy and secure. Increasingly drones are being used to assess sites, capturing GPS data and images, with the cloud this information is instantly accessible. The flexibility of being able to access documents from any location on any device is key for the construction sector.
Affordability – Making the move to hosted solutions can save construction organisations a lot of money. By cutting out the hardware, the need for software licenses & server maintenance costs is gone. There is also the huge benefit of cloud scalability. When taking on larger or more complex projects cloud solutions can be scaled up to meet increased demand, and during slower periods can be scaled back down. This is particularly important for construction companies who occasionally work on big contracts.
Using research from Mcafee to look at cloud adoption barriers across these sectors shows three main areas of concern; security, lack of technical knowledge and budget. Over 49% of survey respondents had their cloud adoption slowed due to a lack of technical skills. This is an easy barrier to overcome with modern cloud adoption. Most cloud providers make the process of transferring to the cloud very easy and straightforward, with the majority having dedicated transfer teams to ensure no data loss. For those worried about data security, the cloud is just as safe as having your own data centres if you choose the right provider.
Cloud services providers have some of the most secure platforms available, after all, it’s in their best interests to keep their clients' data safe and secure. The security capabilities that these cloud providers implement to ensure data protection and network security can include advanced firewalls, intrusion-detection systems on storage facilities, and automated threat detection systems, all of which are constantly monitored, updated and tested. As discussed, cloud solutions offer a host of ways to cut costs for any organisation, including cutting software licenses & server costs, utilising scalability, and the reduction in office space needed through the ability to work from anywhere. Overall, the benefits that these industries could reap from adopting the cloud, far outweigh the concerns.
If you would like to discuss which cloud solution will be best suited to you business, contact Nasstar today to receive expert advice and find out more.