As logic might suggest, the level of success a technology strategy brings to bear is directly affected by the level of commitment to that strategy. So, it comes as little surprise when research firm IDC unveils a report showing that the benefits of cloud services increase exponentially as a company’s level of adoption increases. Perhaps less intuitive, however, were findings that illustrated how even a small increase in adoption level can lead to significant advances in business performance benefits.
Currently, about four in 10 organizations have adopted some form of public or private cloud services, according to IDC, and within those companies, IDC analysts identified five distinct levels of cloud adoption. At one end are what IDC calls “Ad Hoc,” or companies in the experimental stage where lines of business mostly utilize cloud services to fulfill immediate needs, often unauthorized by IT. These are followed by the “Opportunistic,” which experiment with short-term improvements in access to IT resources or consider cloud only for new and isolated applications. Next come the “Repeatable,” which are enabling more agile access to IT resources through standardization, but rely mainly on self-service portals to access cloud services. Further along the line of adoption are the “Managed,” or companies implementing consistent, enterprise-wide best practice approaches to cloud, and the “Optimized,” defined as companies with the most mature strategies that drive business innovation through IT-enabled products and services.
Average KPI Benefit of Moving Up Levels of Cloud Adoption
|Ad Hoc to Opportunistic||Ad Hoc to Repeatable||Ad Hoc to Managed||Ad Hoc to Optimized|
|IT Cost Reduction||13%||29%||48%||77%|
|Strategic Allocation of IT Budget||16%||56%||100%||200%|
|Time to Provision||27%||47%||76%||99%|
Most organizations are in the early stages of cloud adoption, with just 25 percent classified as having Repeatable, Managed, or Optimized strategies, says IDC, and only 1 percent falling in the Optimized category. Organizations that have moved from the Ad Hoc status to Optimized – again, not surprisingly – have realized the greatest improvements in key business outcomes, including a 200 percent improvement in strategic allocation of IT budgets, a 77 percent reduction in IT cost, and 4 percent increase in revenue.
IDC also discovered that organizations simply moving from level one (Ad Hoc) to level two (Repeatable) likewise experienced significant upsides, including a 13 percent reduction in IT cost, a 27 percent improvement in time to provision and a 43 percent greater ability to meet service level agreements (SLAs), among other improvements. A move from Ad Hoc status to Repeatable, meanwhile, led to a 56 percent improvement in strategic allocation of IT budgets, 47 percent improvement in time to provision, 29 percent reduction in IT costs, and a 1.4 percent increase in revenue.
“The benefits begin immediately and accelerate as you move up the adoption curve,” IDC researchers concluded. In other words, for companies that have yet to enter the cloud, or are just beginning to dabble in cloud services, significant returns are within short reach.
Martin Vilaboy is editor-in-chief of ChannelVision magazine, a printed and online source for service providers, resellers and brokers of communications and IT products and services. For more information, visit www.channelvisionmag.com; CV@LinkedIn.