danish cloud maturity survey 2018 - ernst & young · 2018-05-08 · danish cloud maturity...
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Danish Cloud Maturity Survey 2018 | 1
Danish Cloud Maturity Survey 2018Current and planned adoption of cloud services
Early days for cloud adoption with concerns for security and expertise, and complexity of migrating the legacy applications
Cloud maturity and current usage of cloud-based services are still relatively low
Cloud maturity is still relatively low in Denmark with larger organizations lagging behind medium sized organizations. The Technology, Media and Telecommunication (TMT) sector is reported to have the highest cloud maturity. This can be attributed to the impact of technology disruption in the TMT sector and emergent adoption of Internet of things (IoT) and Big Data in the sector. The Power and Utilities (P&U) sector, and the Consumer Products and Retail (CPR) sector have low cloud maturity and seem to struggle with the digital transformation needed to meet the changing market dynamics toward online retailing. That sector also reports of less number of approved cloud services and dominate seeing security as a concern.
Digital Transformation is driving cloud adoption
The most important business driver of cloud adoption in Danish organizations is digital transformation. However, most of the cloud services still seem to be used for internal IT initiatives and pilots of new digital services, as indicated by the limited interest in moving to the cloud to drive revenue growth. This is predictable in Public Sector but this is not restricted to this sector alone. Even the P&U, CPR and Automotive and Transportation (A&T) sectors rank revenue growth low as a cloud driver.
Security concerns and lack of cloud expertise along with legacy applications are holding back cloud adoption
Security concerns are reported as a top challenge while improved IT security is reported as a mid-ranked benefit of cloud adoption. Some
sectors, such as TMT, are represented in both categories. Lack of expertise is broadly reported across all sectors and organizational size, whereas legacy applications is a clear concern in global organizations and in the Governmental and Public Sector.
Plans for increasing the use of cloud-based applications exist, but will be delayed till the adoption of cloud-based infrastructure takes off
The largest Danish organizations are planning to significantly increase the usage of cloud-based applications in the coming years, with the A&T and TMT sectors giving the highest rank. However, the adoption of cloud-based infrastructure services is expected to lag behind due to the complexity of migrating legacy applications to the cloud and lack of expertise.
Developing cloud strategies and executing on cloud road maps have priority over tackling the security and migration issues
There is a high focus on building new cloud-native digital applications to support digital transformation, developing cloud strategies and executing on cloud road maps in the coming years, with indications of TMT sector as the front-runner with the P&U sector trailing behind. But with reported lack of expertise and the effort required for overcoming the issues related to legacy migration, it will take time until the cloud adoption really takes off.
Contents
01 Cloud maturity
02 Drivers and challenges
03 Current usage
04 Future plans
05 Security
06 About the survey
Danish Cloud Maturity Survey 2018 | 5
Cloud maturity is still relatively low
Average cloud maturity based on geographical footprintAverage of cloud maturity level of respondents on a scale from 1 to 5, where 5 is the highest
Average cloud maturity of the Danish respondents is between 2 and 3, which is supported by EY’s experiences in Denmark.
Organizations with a broader geographical footprint (EU/Nordics or global) have slightly higher cloud maturity than those with a Danish footprint, indicating that the organizations with a local focus is less likely to employ cloud solutions.
Average cloud maturity based on sectorAverage of cloud maturity level of respondents on a scale from 1 to 5, where 5 is the highest
0
1
2
3
4
5
Denmark EU/Nordics Global
The TMT and Health and Life Science, HLS, sectors have the highest cloud maturity due to high adoption of the applications based on Software as a Service (Saas) sanctioned by the organization's IT department. This can be attributed to the impact of technology disruption in the TMT sector and the emergent adoption of Internet of things (IoT) and Big Data in the sectors.
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4
5
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Danish Cloud Maturity Survey 2018 | 7
27%
46%
50%
54%
62%
65%
73%
Drive revenue growth
Reduce costs
Drive business innovation
Develop new products and services
Improve business scalability
Reduce time-to-market with new digitalsolutions
Drive digital transformation
Digital Transformation is driving cloud adoption but the security concerns and lack of cloud expertise is holding back the organizations
Key business drivers for moving to the cloudPercentage of respondents reporting the driver
There are many strong business drivers for moving to the cloud, the most important ones being digital transformation and reduced time-to-market with new solutions. The improved business scalability is also a key driver for moving to the cloud in the Danish market.
There is, however, less interest in moving to the cloud to drive revenue growth or reduce costs.
This indicates that the use of cloud services could be focused at internal IT and pilots of new digital services.
Benefits of using cloud servicesPercentage of respondents reporting the benefit
Greater scalability and shorter IT infrastructure deployment time are reported as the most significant benefits of using cloud services. Cost savings as a benefit of adopting cloud services is reported as less important than operational benefits such as business continuity, availability and IT operational efficiency for now. This indicates that flexibility, agility and operational stability are viewed as more important benefits than cost reduction.
About 38% of respondents reported improved IT security as a benefit of using cloud, while security concerns have been reported as a top challenge related to cloud services adoption.
4%
12%
19%
23%
23%
27%
31%
35%
38%
42%
46%
50%
50%
77%
Other
Higher performance
Increased developer productivity
Larger geographic reach
Reduced IT operational risk
Move from CapEx to OpEx
Cost savings
Improved IT operational efficiency
Improved IT security
Shorter time-to-market with new digital solutions
Higher availability
Business continuity
Shorter IT infrastructure deployment time
Greater scalability
Danish Cloud Maturity Survey 2018 | 8
Digital Transformation is driving cloud adoption but the security concerns and lack of cloud expertise is holding back the organizations (Contd.)
Challenges related to using cloud servicesPercentage of respondents reporting the challenge
Security concerns and lack of cloud expertise are reported as the most significant challenges related to using cloud services, closely followed by compliance with regulations, legacy application migration and the complexity of managing cloud costs.
This is supported by EY’s experience from other projects that shows that organizations do not have the full expertise to manage cloud security. Many organizations have currently identified privacy and regulation compliance with General Data Protection Regulation (GDPR) as a challenge to securely manage data across different platforms and identify the geographical origin of the cloud host.
4%
4%
12%
15%
27%
35%
46%
50%
50%
54%
54%
Other
Do not use cloud
Current identity management solutions and processes
Move from CapEx to OpEx
Vendor lock-in
Complexity of managing multiple cloud services
Complexity of managing cloud costs
Complexity in migrating legacy applications
Compliance and/or regulations
Lack of cloud expertise
Security concerns
Danish Cloud Maturity Survey 2018 | 11
Current usage of cloud-based services is still low, with Microsoft as the dominant service provider
Share of cloud-based IT applicationsPercentage of respondents within each range
All respondents report to have cloud-based IT applications. However, the responses show that the Danish cloud maturity is relatively low.
About 52% of the respondents report to use cloud services for only 1%–19% of their IT applications whereas 30% use cloud services for 20%–39% of IT application.
In the 1%–19% group, the CPR and A&T sectors are slightly dominant.
Share of cloud-based IT applicationsPercentage of responses within each range split based on the respondent's geographical footprint
Respondents with EU/Nordics footprint are reported to have a lower share of IT applications in the cloud compared to those with a global or Danish footprint.
52%
30%
12%
3% 3%
1%–19% 20%–39% 40%–59% 60%–79% 80%–100%
36%
75%
50%
55%
25%
14% 29% 7%
9%Global
EU/Nordics
Denmark
1-19% 20-39% 40-59% 60-79% 80-100%
Danish Cloud Maturity Survey 2018 | 12
Current usage of cloud-based services is still low, with Microsoft as the dominant service provider (Contd.)
Use of SaaS-based IT applicationsPercentage of respondents using the application
Microsoft Office 365 is the most used cloud-based IT application in the Danish market followed by Adobe Creative Cloud. The responses also show that Microsoft has a strong overall position, with Office 365, Power BI and Dynamics 365 among the top five cloud-based IT applications used.
In addition, IT development and operations process tools, such as JIRA and GitHub, are used in almost every fourth large Danish organization. Slack is also on the top list of usage, indicating that SaaS adoption can happen very quickly even at large Danish organizations.
4%
4%
4%
8%
12%
12%
12%
15%
15%
15%
15%
23%
27%
27%
27%
27%
54%
62%
88%
Other
SAP Ariba
Workday
New Relic
Box
Google G Suite
Zendesk
DocuSign
Salesforce.com
SAP Sucessfactors
Slack
JiRA
Dropbox
GitHub
Microsoft Dynamics 365
ServiceNow
Microsoft Power BI
Adobe Creative Cloud
Microsoft Office 365
Danish Cloud Maturity Survey 2018 | 13
Current usage of cloud-based services is still low, with Microsoft as the dominant service provider (Contd.)
Share of cloud-based IT infrastructurePercentage of responses within each range
Security concerns, lack of expertise and migration complexity are reported as barriers for moving to the cloud, and almost all of the respondents have below 64% of their IT infrastructure in the cloud.
On average, the responses show less use of cloud-based IT infrastructure compared to cloud-based IT applications, indicating that the adoption to cloud services is happening more rapidly in the applications layer.
Share of cloud-based IT infrastructurePercentage of responses within each range split based on the respondent's geographical footprint
Organizations with a global footprint tend to have a larger share of cloud-based IT infrastructure than those with Danish or EU/Nordic footprint.
64%
21%
6%
3%3%
3%
1%–19% 20%–39% 40%–59%
60%–79% 80%–100% Do not use cloud
55%
87%
58%
36%
13%
14% 14% 7%
9%
7%
Global
EU/Nordics
Denmark
1-19% 20-39% 40-59%
60-79% 80-100% Do not use cloud
Danish Cloud Maturity Survey 2018 | 14
Current usage of cloud-based services is still low, with Microsoft as the dominant service provider (Contd.)
A majority of the respondents use more than one Infrastructure as a Service (IaaS) or Platform as a Service (PaaS) provider, and 15% reports to use three or more providers, indicating that a multi-cloud strategy is popular in the Danish market for the organizations that use it.
IaaS or PaaS provider usedPercentage of respondents using the provider
Microsoft Azure is, by far, the most popular IaaS or PaaS provider among the respondents. The responses indicate that Amazon Web Services, AWS, has a significantly smaller market share in the Danish market when compared to its market-leading position worldwide. However, it should be noted that AWS market share probably are bigger as many people are not aware of the role services from Amazon plays regarding shadow IT.
Google is emerging as the third most popular provider and has a slightly higher market share in Denmark compared to their global position.
The responses indicate that the other providers have a limited market share, and that the market is dominated by the three large global providers mentioned above.
Number of IaaS or PaaS providers usedPercentage of respondents within each category
5%
42%
32%
16%
5%
Use no IaaS or PaaS provider
Use one IaaS or PaaS provider
Use two IaaS or PaaS providers
Use three IaaS or PaaS providers
Use four or more IaaS or PaaS providers
4%
4%
8%
12%
15%
31%
85%
Alibaba Cloud
Force.com
SAP Cloud Platform
Do not use IaaS/PaaS
Google Cloud Platform
Amazon Web Services (AWS)
Microsoft Azure
Danish Cloud Maturity Survey 2018 | 15
Current usage of cloud-based services is still low, with Microsoft as the dominant service provider (Contd.)
Applications are the most used cloud workload. Databases and storage are emerging as a popular cloud workload — something that can be attributed to the high cost and complexity of hosting databases and storage on premise.
The limited use of cloud container as a service (CaaS) in the Danish market can be attributed to the complexity of migrating legacy applications, which is a major barrier for cloud adoption.
Emerging trends such as machine learning, cloud-based IoT services and high-performance computing are still in its infancy in the Danish market.
Cloud workloads usedPercentage of respondents using the workload
4%
9%
9%
13%
13%
13%
17%
17%
22%
26%
30%
30%
35%
52%
Integration services
Internet of Things (IoT)
Machine Learning
Container services
Desktop
Front end solutions
High performance computing
Push notifications
Do not use Iaas/PaaS
Data analytics
Disaster recovery (backup)
Storage
Databases
Apps
Danish Cloud Maturity Survey 2018 | 16
Current usage of cloud-based services is still low, with Microsoft as the dominant service provider (Contd.)
Number of unsanctioned cloud services for respondents with 1–9 approved cloud servicesPercentage of responses within each range
36%
46%
18%
1-9 10-29 30-50
Organizations with only 1–9 approved cloud services report having many unsanctioned cloud services. This trend is also observed in the organizations with 10–19 approved cloud services. This indicates that IT departments trail behind the business side's adoption of cloud services and are still trying to catch up with the demand for the services among their user community. The Governmental and Public Sector reports the highest number of approved services with the CPR sector lagging behind.
Danish Cloud Maturity Survey 2018 | 19
Developing cloud strategies and executing on cloud road maps are major priorities going forward
Top cloud initiatives planned for 2018Percentage of respondents reporting the initiative
The responses show a high focus on building new cloud-native digital applications. This is supported by the finding that the most important business driver for moving to the cloud is digital transformation, and that shorter time to market with new digital solutions is reported as one of the major benefits of using cloud-based services. By reports, TMT is clearly taking lead with the P&U sector lagging behind.
About 35% of the respondents are planning to develop a cloud strategy in 2018, whereas 39% are planning to execute on their cloud road map, implying an emerging cloud maturity in the Danish market.
Despite security concerns being reported as the top challenge, addressing the concerns going forward does not seem to be a high priority, with only 30% reporting planned initiatives to address these.
Top four cloud initiatives planned for 2018 based on geographical footprintPercentage of respondents reporting the initiative split based on the respondent's geographical footprint
Organizations with a Danish footprint have overall less initiatives planned for 2018, compared to those with an EU/Nordics or global footprint.
They tend to have more focus on developing a cloud strategy than executing on their road map or developing new cloud-based digital applications.
4%
9%
9%
13%
22%
26%
26%
30%
35%
39%
39%
Other
Run a tender process towards IaaS/PaaStechnology providers
Run a tender process towards managedcloud IaaS/PaaS service providers
None
Implement cloudmanagement/monitoring
Migrate legacy systems to the cloud
Implement increased automation in ourdigital development lifecycle
Implement improved security in ourdigital development lifecycle
Develop a cloud strategy
Execute on our cloud roadmap
Build new cloud native digital applications
33%
33%
56%
67%
33%
33%
67%
33%
25%
38%
0%
13%
Implement improved security in our digital development lifecycle
Develop a cloud strategy
Execute on our cloud roadmap
Build new cloud native digital applications
Denmark Europe/Nordics Global
Danish Cloud Maturity Survey 2018 | 20
Plans for increasing the use of cloud-based applications exist, but will be delayed till the adoption of cloud-based infrastructure takes off
Share of IT applications estimated to be cloud-based in the following yearsPercentage of responses within each range
Share of IT applications that are cloud-based is expected to increase significantly in the coming five years.
Within three years, more than 80% of all respondents estimate having at least 20% of their IT applications in the cloud.
This indicates that the largest Danish organizations are planning to significantly increase the use of cloud-based applications.
Share of IT infrastructure estimated to be cloud-based in the following yearsPercentage of responses within each range
4%
13%
57%
17%
39%
26%
26%
27%
13%
26%
17%
23% 4%
4%
4%
5 years
3 years
1 year
0% 1%–19% 20%–39% 40%–59% 60%–79% 80%–99% 100%
4%
4%
9%
61%
22%
56%
27%
26%
22%
4%
26%
9%
13% 9%
4%
4%
5 years
3 years
1 year
0% 1%–19% 20%–39% 40%–59% 60%–79% 80%–99% 100%
About 65% of the respondents estimate to have less than 20% of their IT infrastructure in the cloud in 2018. But within five years, only 4% of the respondents estimate to have less than 20% of their IT infrastructure in the cloud.
Within five years, 22% of the respondents estimate having above 80% of their IT infrastructure in the cloud, and 9% of the respondents estimate that this percentage will reach 100% within the same time frame.
This indicates that it will take time until the adoption of cloud-based infrastructure takes off.
Danish Cloud Maturity Survey 2018 | 22
With security concerns being the top challenge for cloud adoption, cybersecurity initiatives is a key focus area
Established security initiativesPercentage of respondents with established security initiative against each threat
More than 80% of the respondents have established security initiatives in basic areas such as data breaches, data loss, denial of service, DoS, and identity, credential and assess management — the areas where vulnerabilities are used for Common Attacks. Reports are quite similar for all sectors in general, with the P&U sector lagging slightly behind. DoS initiatives are reported as a focus area for the Governmental and Public Sector and Advanced Persistent Threats (APIs) for TMT. Adoption of cloud solutions and emerging technologies opens for potential sophistic Advanced and Emerging Attacks that must be addressed to support the cloud service security features.
17%
22%
35%
39%
57%
57%
65%
83%
83%
83%
91%
Shared Technology vulnerabilities
Abuse and nefarious use of cloudservices
Insecure interfaces and applicationprogramming interfaces (APIs)
Advanced persistent threats (APTs)
Malicious insiders
Account hijacking
System vulnerabilities
Data loss
Insufficient identity, credential andaccess management
Denial-of-Service (DoS)
Data breaches
Danish Cloud Maturity Survey 2018 | 24
About the survey
The results are based on an anonymous online survey where approximately 220 IT responsible (such as Chief Information Officers and Heads of IT) of large private and Governmental and Public Sector organizations in Denmark were invited to respond in March 2018.
Geographical footprintPercentage of respondents
Organization sizePercentage of respondents
46%
32%
22%
Denmark Global Europe/Nordics
25%
59%
16%
<1,000 employees 1,000–10,000 employees>10,000 employees
SectorPercentage of respondents
11%
11%
35%
3%
0%
0%
11%
15
14%Automotive and transportation
Consumer products and retail
Government and public sector
Health and life sciences
Insurance
Oil and gas
Power and utilities
Technology, media and telecommunications
Other
Danish Cloud Maturity Survey 2018 | 25
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