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A report from The Economist Intelligence UnitSponsored byAscending cloud: The adoption of cloud computing in five industriesExecutive summary The Economist Intelligence Unit Limited 20161Ascending cloud: The adoption of cloud computing in five industriesExecutive summaryIntroduction 2Cloud computingfindings for all industries 3Manufacturinga special case of cloud adoption 8Contents The Economist Intelligence Unit Limited 20162Ascending cloud: The adoption of cloud computing in five industriesExecutive summaryA 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 CoghlanSenior Editor, TechnologyEconomist Intelligence Unitwestcoghlan@economist.comIntroductionhttp://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 20163Ascending cloud: The adoption of cloud computing in five industriesExecutive summary1. 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 industriesSource: EIU Survey Cloud Computing and Economic Development, October 2015Banking Retail Manu-facturingEducation Healthcare Industry averagePervasive presence Significant presenceHow would you characterise the current presence of cloud in the following industries?% of respondents reporting a significant or pervasive presence5275714273410318437 The Economist Intelligence Unit Limited 20164Ascending cloud: The adoption of cloud computing in five industriesExecutive summary2. The growth of cloud across all industriesCloud 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 cloudThe 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 2015Major factorModerate factorRate of cloud penetration% saying cloud will be a moderate or major factorAverage of all industries In one yearIn three yearsIn five years471940432169Source: EIU Survey Cloud Computing andEconomic Development, October 2015What are the greatest challenges to cloud?In order of importance (% respondents) Hacking, cyber-crime and cyber-espionagePoor infrastructureQualified personnelConsumer resistanceForeign competitionLack of entrepreneursPoor education systemVested interestsLack of capital Competes with existing businessGovernment regulation 47 37 36 29 29 28 26 25 22 20 15 The Economist Intelligence Unit Limited 20165Ascending cloud: The adoption of cloud computing in five industriesExecutive summarySource: EIU Survey Cloud Computing andEconomic Development, October 2015Major factorModerate factorFuture cloud penetration of the retail industry% saying cloud will be a moderate or major factor In one yearIn three yearsIn five years5714434123704. Cloud computing and bankingThere 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 industryOur 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 2015Major factorModerate factorFuture cloud penetration of the banking industry% saying cloud will be a moderate or major factorIn one yearIn three yearsIn five years521953361574Source: EIU Survey Cloud Computing andEconomic Development, October 2015Very importantSomewhat importantHow important is cloud in supporting sectors of the banking industry?% saying cloud will be somewhat or very important New ways to make paymentsLowering banking costsBanking for remote populationsNew ways of savingBanking for poor populationsNew ways of lending 68 21 60 32 57 34 50 45 43 42 42 47Source: EIU Survey Cloud Computing andEconomic Development, October 2015Very importantSomewhat importantHow important is cloud in supporting sectors of the retail industry?% saying cloud will be somewhat or very important Reducing costs of goods and servicesHelping new companies growIncreasing access to retailMaking goods more availableMaking shopping more convenient 58 33 49 45 48 41 43 44 40 51 The Economist Intelligence Unit Limited 20166Ascending cloud: The adoption of cloud computing in five industriesExecutive summary6. The impact of cloud on manufacturingManufacturing 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 2015Major factorModerate factorFuture cloud penetration of the manufacturing industry% saying cloud will be a moderate or major factor In one yearIn three yearsIn five years461543432171Source: EIU Survey Cloud Computing andEconomic Development, October 2015Very importantSomewhat importantHow important is cloud in supporting sectors of the manufacturing industry?% saying cloud will be somewhat or very important Supporting production processesBetter supply chain managementEnabling design and prototypingInventory, orders and distribution 60 30 54 35 52 39 48 407. Cloud computing and educationEducation 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 2015Major factorModerate factorFuture cloud penetration of the education industry% saying cloud will be a moderate or major factor In one yearIn three yearsIn five years5520 29471867Source: EIU Survey Cloud Computing andEconomic Development, October 2015Very importantSomewhat importantHow important is cloud in supporting sectors of the education industry?% saying cloud will be somewhat or very important Higher education (university)Education for remote areasContinuing/adult educationMid-level students (ages 11-17)Education for low-incomeEducating 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 20167Ascending cloud: The adoption of cloud computing in five industriesExecutive summary8. Cloud computing and healthcareCloud 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 2015Major factorModerate factorFuture cloud penetration of the healthcare industry% saying cloud will be a moderate or major factor In one yearIn three yearsIn five years262532492861Source: EIU Survey Cloud Computing andEconomic Development, October 2015Very importantSomewhat importantHow important is cloud in supporting sectors of the healthcare industry?% saying cloud will be somewhat or very important Centralisation of health recordsSupporting preventative careCare for low-income populationsSupporting remote diagnosisSupporting remote treatment 57 27 53 32 45 35 44 32 43 37 The Economist Intelligence Unit Limited 20168Ascending cloud: The adoption of cloud computing in five industriesExecutive summary1. Cloud and the manufacturing supply chainCloud 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 adoptionWhich 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 technologiesNew forms of education through new technologiesNew forms of retailing through new technologiesNew forms of banking through new technologiesNew forms of healthcare through new technologies 28 20 20 18 13Source: EIU Survey Cloud Computing and Economic Development, October 2015Source: EIU Survey Cloud Computing andEconomic Development, October 2015What will be the importance of cloud in manufacturing supply chain in one years time?(% respondents)1 103554Very unimportantSomewhat unimportantSomewhat importantVery important The Economist Intelligence Unit Limited 20169Ascending cloud: The adoption of cloud computing in five industriesExecutive summary2. Cloud and design and prototyping90% 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 2015What will be the importance of cloud in manufacturing design and prototyping in one years time?(% respondents)4 63951Very unimportantSomewhat unimportantSomewhat importantVery important 3. Cloud computing and manufacturing productionCloud 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 2015What will be the importance of cloud in manufacturing production in one years time?(% respondents)4 63060Very unimportantSomewhat unimportantSomewhat importantVery important 4. Cloud and the manufacturing customer88% 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 2015What will be the importance of cloud in manufacturing distribution and customer relationships in one years time?(% respondents)1 104048Very unimportantSomewhat unimportantSomewhat importantVery important The Economist Intelligence Unit Limited 201610Ascending cloud: The adoption of cloud computing in five industriesExecutive summaryWhilst 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.Cover: ShutterstockLondon20 Cabot SquareLondon E14 4QWUnited KingdomTel: (44.20) 7576 8000Fax: (44.20) 7576 8476E-mail: london@eiu.comNew York750 Third Avenue5th FloorNew York, NY 10017United StatesTel: (1.212) 554 0600Fax: (1.212) 586 0248E-mail: newyork@eiu.comHong Kong1301 Cityplaza Four12 Taikoo Wan RoadTaikoo ShingHong KongTel: (852) 2585 3888Fax: (852) 2802 7638E-mail: hongkong@eiu.comGenevaBoulevard des Tranches 161206 GenevaSwitzerlandTel: (41) 22 566 2470Fax: (41) 22 346 93 47E-mail: geneva@eiu.com

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