Survey: Those Who Make Stuff are Using “Cloud Also”

When manufacturers transition their IT away from traditional mechanisms via “Cloud Also,” IDC argues they must focus on strategic collaboration.

  • Introduction
  • Cloud Prevalent on Various Continents
  • Highlights from the 2014 IDC CloudView Survey
  • Big Data’s Promise for the Industrial Internet’s Third Platform
  • The power of Strategic Collaboration

Introduction

Manufacturing businesses around the globe are busy – and not just making Charles Dickens action figures and apocalyptic snow globes. They are also changing their information technology models to treat cloud as a complementary option, as indicated by figures released by the International Data Corporation (IDC).

To collect the data, IDC surveyed 593 manufacturing companies from the Americas, Europe, and Asia-Pacific. The majority of respondents (74%) were executives in the IT department, while the remainder (26%) held a line of business (LOB) position.

Cloud Prevalent on Various Continents

Already, two out of every five American manufacturers (41%) said they are using public cloud.

The advantages of cloud computing for manufacturers are significant, as line of business leaders and their IT organizations increasingly rely on cloud to flexibly deliver IT resources at the cost and speed the business requires,” explained the IDC press release on the survey (released April 2015). Although cloud can be incredibly beneficial, IDC additionally notes that the strategic plans of organizations related to the virtual machines must be in line with manufacturers’ objectives if this new trend is to achieve its potential.

Previous reports from IDC have revealed the worldwide interest in cloud among manufacturing businesses. Half of European manufacturers (50%) said that they have already deployed or are currently orchestrating deployments of enterprise resource planning (ERP) systems running through public cloud. Meanwhile, almost the same number of Asia-Pacific participants (those from China, Japan, North Korea, South Korea, Vietnam, Indonesia, Australia, etc.) are committed to some form of the technology – with 49% reporting that they have adopted or will adopt public or private cloud.

Rather than looking at a specific area of the world, this new report – the 2014 IDC CloudView Survey – assesses manufacturers across the globe.

Highlights from the 2014 IDC CloudView Survey

Here are some of the main takeaways:

  • Globally, two out of every three manufacturing companies use cloud hosting for at least three systems in public (66%) or private (68%) environments.
  • “Cloud Also” – the complementary approach that is effectively more hesitant than “Cloud First” (the policy professed, though still limping along, by the US federal government) – is the policy of choice: three in five (62%) said that their organization takes the “also” rather than the “first” approach for new systems, while that figure is slightly lower for replacement of current applications (57%).
  • The main way that manufacturers are using cloud computing is to fulfill IT functions. Just one in three (30-35%) manufacturers said that they were using it for engineering, sales, supply chain, or operations.
  • The proportion of IT spending that will move away from traditional IT and into cloud computing by 2016 is 27% on average.
  • Based on the trajectory of adoption, cloud is projected to become the go-to solution for any new systems that are needed based on growth (whether by the company itself or through acquisitions) through 2024.

Big Data’s Promise for the Industrial Internet’s Third Platform

“Manufacturers are in the midst of a digital transformation, in which 3rd Platform technologies are absolutely essential to the way they do business and in the products and services they provide to their customers,” said IDC manufacturing analyst Kimberly Knickle. “Consequently, a strategic approach to adopting cloud is absolutely essential.”

Manufacturers think that cloud will enhance their revenue by increasing the actionability of big data that they pull from sensors – what’s called the Internet of Things or, more specifically, the Industrial Internet. Information will feed in from the products, the manufacturing machines, and supply chain inventory. This data is worth more if it can be quickly and efficiently processed by numerous departments and even affiliates to gain a plethora of insights.

Manufacturers have become increasingly interested in private cloud so that they can build upon their existing networks and benefit from cloud agility without feeling they are making the data vulnerable. As time goes on, though, the IDC report suggests that companies will transition to public architectures with any nonsensitive systems. Eventually, they will increasingly take the cue of General Electric and go “all-in” with the public cloud, as the security (and perception of security) of public machines becomes more robust.

“Because of cloud’s tremendous value in making IT resources available to the business based on business terms,” remarked Knickle, “manufacturers must  ensure that the line of business and IT management work together in defining their requirements.”

The Power of Strategic Collaboration

Like virtually every other sector of the economy, manufacturing has realized the cloud should be considered in the development of any new IT system with “Cloud Also” strategies.

No matter what type of stuff your organization makes – whether it’s Charles Dickens action figures, apocalyptic snow globes, or anything else – cloud is best served through a provider that appreciates the power of strategic collaboration. At Superb Internet, we collaborate with our customers to meet their needs.

By Kent Roberts

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