Everything as a Service – Practical Use of Cloud Services

For years, cloud computing has been described as the technology of the future. This future is there already: Now is the time to speak about its practical implementation by the companies. We.CONECT provides IT decision-makers with the new XaaS Evolution 2017 event, a tailor-made platform that discusses successful projects in the context of the use of cloud services and discusses topics directly from the companies’ working practice. This article summarizes the current needs and biggest concerns of cloud users among the leading companies in Germany, Austria and Switzerland.

For the past ten years, cloud computing has been associated with a number of benefits: scalability, flexibility, faster resource provision, and significant cost savings. Whether it is software (SaaS), Platform (PaaS), or Infrastructure as a Service (IaaS), cloud services are supposed not only to enable the companies’ IT to drive the business, but also form the basis for accelerating innovation and expanding the portfolio, and even for developing new business models. At least this was the basic promise.

While technology vendors attest to cloud technologies that they by 2016 they have already became the mainstream (Tableau 2017) and announce the Autonomous IT & Artificial Intelligence in the Data Center, Infrastructure Orchestration and Serverless Infrastructure, Cloud Integration Hubs, IoT & Industrial Clouds, and Hardware Clouds as Top Trends for 2017 (Crisp Research 2017), the main question for most technology users is the implementation of cloud services and concrete examples of their practical use: What are the use and business cases in which industry, what are the results and what are the main difficulties in implementing them?

In a survey of December 2016, we.CONECT devoted itself to the subject of cloud services and received exciting insights into the strategic considerations and practical challenges of leading companies from the German-speaking countries. The survey included decision makers and experts from fields of IT Infrastructure, IT Architecture, IT Service Management, IT Strategy, IT Security and IT Operations from more than 60 companies, including Daimler, Commerzbank, Volkswagen, Deutsche Telekom, Allianz, DHL, Bayer, Deutsche Bahn, Continental, UBS, Siemens, Swiss Life, sIT Solutions, Heidelberger Druckmaschinen, Zurich, Mondi, Scania, Festo, Schaeffler, Krones and others. (we.CONECT 2016)

Due to the fact that large companies with hybrid system environments had participated in the survey, a wide range of different cloud service models had to be assumed. Almost three-quarters of the surveyed companies already use several cloud service models: 72% use SaaS, while 41% (additionally) use PaaS and 31% of companies use IaaS. In addition, 82% of respondents highlighted that their company had a cloud strategy. Interestingly, only 3% rated it as very good, while 19% were dissatisfied with their company’s cloud strategy. Around 37% of respondents viewed their respective cloud strategies as average. Asked about the areas in which their businesses expect or are already experiencing an improvement through the use of cloud services, 59% of respondents named the fast implementation of new solutions, for 41% it was the service automation, and for 35% the introduction of new features. Just as many (35%) expect the use of XaaS to replace the legacy systems and nearly one third the increase of business performance.

But what counts when it comes to choosing a cloud solution? The costs issue was the most important one, identified by 71% of respondents, followed by security, which is a major criterion for selecting Cloud Services for 62%. For 58%, the simplest possible integration into the existing environment plays a central role, while half of all respondents would like to see data protection ensured. For more than one-third of respondents, the functionality and customization possibilities of the solution are considered to be particularly important, and more than a quarter of respondents are particularly concerned about the independence of providers.

Around 67% of companies hope to reduce their costs by using cloud services. More than half expect to accelerate innovations and increase the flexibility of the business due to the changes in the market. 40% of enterprises identified improved capacity utilization and resource use as a key driver for the use of cloud services, while 37% expect to increase the speed of development. 63% of companies assess the legal compliance as the most important challenge in the use of various cloud services. For more than half of all respondents the greatest difficulties with implementation are related to the integration into the existing system and with regard to the overall impact on the IT organization. One quarter also fears the lack of clarity of the overall costs, whereas 23% generally assumes high implementation costs. For every fifth company, the issue of data security remains a particularly difficult one in this context. In fact, for 68% of surveyed enterprises, this is the biggest challenge in implementing cloud services.

The second biggest challenge is the coordination and integration of IT: 59% of the respondents questioned the coexistence of cloud services and the old IT pool (software, infrastructure, network, etc.): How can legacy and XaaS work together? While it will be interesting to discuss and learn about practical experiences of whether and how approaches such as a bimodal IT (Gartner), as used by the Deutsche Post DHL (Ziarko 2017), or even a multi-modal IT  (Laitenberger 2016) are already taking effect, possible facing additional difficulties and costs will  still concern many companies for some time. Some 44% of respondents consider the promised cost-effectiveness of cloud services to be questionable and problematic, even though the cost reduction for more than half of the companies is one of the most important expectations with regard to the the use of XaaS. Additionally, 35% of the companies share their worries about a possible vendor lock-in, i.e. the dependency on the provider.

For 64% of the leading companies in the DACH region, the risks and security of the use of as-a-service solutions is the central question: where are the critical data best preserved? Particularly interesting are also the use and business cases in the context of cloud services: what expectations are they related to and what are the practical experiences of the companies?

Moreover, the interest of many companies is closely linked to the security and cost issue of the increasing importance of a so-called exit strategy: do other companies have one at all and, if so, what does it look like? Last but not least, the organization of the old IT and the maintenance tasks are topics that many established companies currently deal with and which are also related to the costs. Thus, while start-ups and smaller companies completely rely on the cloud, for big companies the change is more complex and it is obvious that here the use of cloud services needs to be seen as a longer process.

For the most exciting use and business cases of leading companies from Germany, Austria and Switzerland, their biggest challenges and most successful solutions, join the newest we.CONECT event – the XaaS Evolution 2017, Europe’s only end-user driven networking event on the practical use of cloud services.