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Category Leaders Use Cloud as a ‘Force Multiplier’ to Maximize Value From Cloud Investments, Deloitte Survey Says

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Purposeful — not more — investments enable greater strategic innovation outcomes

Deloitte released the findings of its “US Future of Cloud Survey Report: Closing the Cloud Strategy, Technology and Innovation Gap,” which reflects the sentiments of 500 U.S.-based senior cloud decision makers regarding the impact of cloud maturity on business priorities and innovation. On average, there is a 14.5 percentage point innovation gap between information technology’s established strategic priories for cloud and where and how much organizations actually are succeeding in innovating with these new technologies.

The survey classified participants into four organizational profiles (Leaders, Drivers, Moderates and Hopefuls) depending on how they ranked their strategic priorities and the extent to which they reported a high level of success at driving innovation across those priorities.

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The reported value of the cloud widely varies across different cloud services. For example, Leaders gain more value than Hopefuls from the following cloud services:

  • 10 times more value from blockchain
  • 5 times more value from AR and VR
  • 3.5 times more value from containers
  • 2.9 times more value from cloud native
  • 2.3 times more value from cyber security
  • 1.7 times more value from AI and ML

“Purposeful investments in cloud yield impactful results. These include the acceleration of the product development lifecycle, improved margins and greater efficiency,” said Chris Thomas, principal, Deloitte Consulting LLP. “Interestingly, Leaders have invested purposefully — but not necessarily more — than Drivers, Moderates and Hopefuls. In today’s market, purposeful investment includes acquisition and retention of software engineering talent to maximize the flexibility and upside of cloud strategies. This is relevant in the current market where efficient capital deployment with near-term return on investment is a priority.”

Overall, 88% of the decision makers surveyed believe that the cloud is the “cornerstone of [their] digital strategy,” and organizations that use cloud as a “force multiplier” are noticing significant value from their cloud investments. Cloud is also credited as a key factor in driving revenue and solidifying a strong marketplace position.

Similarly, most (89%) consider “increasing efficiency and agility” to be the top strategic priority for their organizations when using cloud, and survey respondents overwhelmingly agree cloud is adding value in this area, as well as many others. While Leaders (95%) are successfully innovating in this area, Hopefuls (80%) are softer in terms of innovation outcomes achieved. The same disconnect applies to building net new products or service revenue, with nearly all Leaders (97%) achieving innovation outcomes and Hopefuls trailing behind (61%) them.

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Overall, cloud investments are set to increase by 6 to 19%, according to more than half of the cloud decision makers surveyed — and over a third of respondents plan to increase their spend by 20% or more.

“As we move beyond cloud migration, into the next phase of cloud innovation, our newly-identified innovation gap will be a key marker for IT decision makers as they determine where to invest their future cloud spend,” said Cathleen Domes, managing director, Deloitte Consulting LLP. “Decision makers should remain focused on efficiency and agility, as well as on optimizing costs, but should also prioritize developing new ideas, approaches and methodologies to advance their overall innovation strategies.”

Additional key findings from this report include:

  • Leaders say cloud investments are driving positive outcomes across strategic measures and at rates far higher than Hopefuls, including:
    • Reducing or optimizing costs; Leaders (96%) versus Hopefuls (59%).
    • Developing new ideas, approaches, or methodologies; Leaders (97%) versus Hopefuls (63%).
    • Expanding existing products/service revenue; Leaders (95%) versus Hopefuls (63%).
    • Creating new operational processes or workflows; Leaders (97%) versus Hopefuls (73%).
    • Mitigating business and regulatory risk; Leaders (97%) versus Hopefuls (69%).
    • Expanding into new markets; Leaders (96%) versus Hopefuls (44%).
    • Providing better sustainability in support of environmental issues; Leaders (90%) versus Hopefuls (41%).
  • Multi-cloud adoption is now an essential strategy for anyone investing in cloud, with most (79%) respondents using two or more cloud providers.
    • The most important benefits cited from a multi-cloud approach include access to more choice in cloud services, application and data processing scalability and increased flexibility/negotiating leverage.
  • Industry clouds are poised to transform the cloud market with unique, customized solutions.
    • Ninety-five percent of all respondents agree or completely agree that industry clouds will be the enabler/catalyst for transformation and automation of industry-specific business processes.
  • Cyber security remains a top priority for all business leaders when developing cloud strategies.
    • Ninety-one percent of respondents have updated their business and operational strategies to address cloud security, risk and controls, and 83% say their cloud investments are driving positive outcomes related to mitigating business and regulatory risk.

“Cloud-based platforms and adoptions are foundational to digital transformation — allowing organizations to focus on outcome-based opportunities, including improved decision making, empowered workforce, enhanced innovation and accelerated business initiatives,” said Vikram KunchalaDeloitte Risk & Financial Advisory cyber cloud leader and principal, Deloitte & Touche LLP. “It’s imperative for organizations to prioritize cloud security risk management in order to confidently execute their cloud strategies and navigate a constantly evolving threat landscape.”

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