Executive summary

Our third annual international study of cloud adoption among 500 senior IT and C-suite decision-makers reveals an uptick in spending and ease of migration.

As the cloud increasingly becomes the norm for enterprises, our report sets out the attitudes and objectives of the people at the sharp end of implementation.

Here are five key things they told us about common barriers to cloud success and how they’ll seek to optimise existing cloud operations – with the spending, security and performance benefits that it promises to bring.

  1. Businesses are continuing to shift to the cloud, and the biggest anticipated spend spans the next 24 months
  2. Sustainability is front of mind – a core component of cloud adoption for decision-makers
  3. IT leaders’ time is split evenly between the main elements of cloud strategy: planning, testing, migrating and optimising. But a larger focus on optimisation could see firms reap greater rewards
  4. Despite voicing the typical barriers of cloud adoption, early adopters have found it easier than they expected to migrate. Much of this is down to strong partner support on their journey
  5. Enterprises are achieving KPIs quicker than expected. On average, IT leaders say they’ve met 49% of their goals already, while 11% have completed their cloud project KPIs#

Research methodology

Our research partner Censuswide* polled a total of 500 senior IT decision-makers – including cloud decision-makers and C-suite respondents – at companies in the UK, Germany, France, Italy, Spain, Singapore and Japan.

They work in retail, media & entertainment, healthcare & pharmaceuticals, manufacturing, travel, transport & logistics, financial services, telecoms and IT. The research was conducted online between 29 April and 16 May 2022.

NB: All statistics included in this report are rounded to the nearest whole number.

*Censuswide, an independent retail consultancy, abides by and employs members of the Market Research Society, which is based on ESOMAR principles.

Introduction

“There is no business strategy without a cloud strategy.”

We think this statement by Gartner vice-president Milind Govekar follows an unprecedented era of growth in spending on cloud services. The main drivers are the profound workplace changes we’ve seen over the past two years, alongside the ever-increasing demand for digitisation.

According to Gartner ®, worldwide cloud revenue will reach

$474bn in 2022 – an increase from just over $400bn in 2021. In addition, the firm says 85% of organisations will be cloud- first by 2025.

These figures confirm what our previous research indicated: cloud adoption is not only expanding rapidly, it’s here to stay.

So, with a large share of organisations shifting to the cloud already and even more committing to do the same, the time has come for IT leaders and the C-suite to map what their enterprise wants, needs and expects from cloud technologies.

With that in mind, Colt’s third annual survey of senior tech bosses and business leaders across Europe and Asia focuses on cloud optimisation.

What do companies think of their journey to the cloud so far? And what must they improve to make migration a roaring success?

Cloud services have the power to transform business results. Adoption increases IT stack agility, improving productivity, scalability and future-proofing for firms.

This is reflected in the massive appetite for cloud applications across all sectors and markets we surveyed. But as our respondents revealed, many factors can shape the difference between struggling and success.

One key finding is the equal share of time committed to cloud projects’ strategic side: planning, testing, migrating and optimising.

Without a greater focus on optimising cloud spending, security and performance, enterprises could miss out on transformative outcomes.

By bringing you the latest trends in cloud migration, we aim to guide your organisation’s strategy, investment, and vendor and technology selection to optimise cloud adoption and boost your bottom line.

Gartner Press Release, Gartner Says Cloud Will Be the Centerpiece of New Digital Experiences, November 10, 2021. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

Key findings

Cloud projects are set to swell in the next two years

73% of IT leaders said they’d spend the biggest proportion on cloud projects within two years. 50% revealed this will happen between one and two years from now.

Only 16% expect to allocate most of their money between three and five years from now, with a further 9% claiming to have already hit the max of the cloud project spend.

A lingering effect of the pandemic

As people worked from home and demand for connectivity boomed, companies were busy revising their approaches to cloud migration.

Similar proportions said their journey to cloud implementation was slowed (31%) or accelerated (38%) during the pandemic. While activity lagged most at firms in France (41%), 65% of Spain-based sped up cloud adoption by comparison. 15% of respondents admitted they revised their strategy, and 9% said it has completely changed.

It seems there is a new divide between businesses rushing to the cloud due to the lasting changes of the pandemic and those that have slowed their implementation. Both approaches have pros and cons, and companies are taking more time to make the right decision.

Cloud spending so far has varied by market and sector:

The data reveals that most firms still have yet to spend big on cloud migration.

So, what can IT decision-makers learn from the experiences of the early adopters who have already made the shift?

Takeaway: Time is of the essence
The fact that 50% anticipate their biggest spend on cloud projects will be made between one and two years from now is in line with the usually lengthy research and buying process for cloud technology.
However, this means that decision-makers must act on longer lead times. If your enterprise hasn’t got moving on cloud projects yet, don’t leave it any longer. Take note also of the growing gap between enterprises that have slowed down or sped up cloud migration; you don’t want to be left behind and become less competitive in this emerging two-tier market.

Early adopters are encouraged by the ease of migration

67% of firms that have already invested in cloud applications found migration easier than anticipated. This was true across a range of applications:

There’s further evidence of migration going well so far. On average, respondents claimed they’ve already met nearly half (49%) of the KPIs for their existing cloud projects. In fact, 11% said they’d completed the work.

This early success is breeding confidence to migrate more of their firm’s applications. If they haven’t moved operations already, a significant number intend to do so within two years (tallying with their spending intentions).

Overall, it’s a positive picture. But there’s plenty for cloud decision-makers to do and our data highlights the dangers of a casual approach to cloud migration.

Takeaway: don’t wait too long
Clearly, there are risks as well as benefits to cloud migration. It would be easy to avoid pitfalls by believing that your IT systems are fine as they are. These findings tie back to the proposed period before many cloud projects will begin (see page 13) – firms want to be sure that shifting to the cloud is the right thing to do.
But enterprises that leave adoption too long could miss out on many benefits and see their rivals pull ahead. That’s why the voice of the early adopters is both important and reassuring.

Sustainable solutions

According to reports1, the global sustainable IT market will triple from $11.2bn in 2020 to $36.6bn by 2025. This considerable growth was reflected in our poll.

74% of IT leaders said sustainability is an important consideration for their cloud operations. This includes 27% who stated it’s significantly important.

Takeaway: falling footprint ESG efforts are rising on the boardroom agenda, not least in the telecoms and technology sectors. Scrapping on-site servers and off-site recovery systems can help enterprises consume less power. Furthermore, because cloud servers scale to suit business needs, firms only use the energy they need, making cloud computing a strong option to lower your carbon footprint. A company’s attitude towards its ESG commitments is now a deal-breaker for many businesses. Working with suppliers that contribute to your goals is critical.  

Many barriers threaten smooth cloud migration

We know firms can face barriers when it comes to cloud migration. In our 2021 study, security, migrating legacy technology and cost were named the top three issues.

But it’s also worth considering some of the overlooked aspects IT leaders might encounter during cloud projects.

We’ve identified 11 barriers to better cloud projects – all of which have proven to be a problem for respondents. Across nearly all of these factors, at least seven in ten cloud decision- makers saw them as stumbling blocks.

Budgets are the top barrier for enterprises. While we’ve seen that the biggest spend on cloud is yet to come, this isn’t the case for all businesses.

Sometimes, projected costs spiral out of control for various reasons. Incorporating additional features, like flexible bandwidth, can mitigate an unexpected need for more budget (see page 15).

Integration is the second biggest obstacle. While migrating to the cloud is easier than expected for most, integrating specific applications and systems can be a tricky component. You’d be wise to schedule more time to work on integration if it’s a vital part of your cloud migration.

The third barrier is technically complex solutions. Cloud migration can be a huge, tricky task depending on your sector and enterprise size. Complexity can lead to higher costs and more time to accomplish and deliver the solution.

Our study drilled down further into the aspects most likely to prevent IT decision-makers from achieving their goals:

Takeaway: support brings success
An experienced partner can help, whether you’re undergoing your first cloud project, dealing with components you haven’t previously had to consider in past cloud projects or working on years of experience. Leaning on expertise can help make certain aspects less challenging and smoother, bringing more benefits to enterprises.

The importance of selecting the right partners

A large majority said they used cloud partners to support a range of tasks, from Systems Integrators and Cloud Service Providers to connectivity providers.

Despite this, an internal resource was the most frequent type of support (78%). 30% of IT leaders stated they had a lot of or significant support in this area, which is understandable from a cost perspective.

Yet while in-house resource was the top- ranked support option, most areas of ongoing cloud optimisation have required support.

Only one in ten respondents across all factors mentioned said they needed no help; this demonstrates the critical role partners play in cloud optimisation.

The key is to choose your partner wisely depending on your goals, stage of migration, and previous experience of switching to and managing cloud applications.

Takeaway: stronger connections 
IT leaders listed connectivity providers and consultants as the two types of partners they turn to most for support.
This suggests that reliance on in-house know-how for connectivity might mean enterprises are missing out on making the most of the added value external expertise can bring.

Look at where cloud project time is being spent

It’s interesting to note the strategic areas where IT decision-makers said they spend their time. Notably, they have divided their time relatively evenly between tasks – but there’s always room for renewed and improved focus.

These are the stages of moving to and managing cloud services where partners can offer support, making strategies as effective as possible.

Takeaway: focus on optimisation
Businesses that consider themselves well versed in cloud strategy should now shift to optimising their migration and all of its benefits.
Positive outcomes of getting the best processes in place include better security, more efficient spending and improved performance.

The power of optimising connectivity

Respondents who have overseen optimised cloud connectivity reported multiple benefits.

Takeaway: slicker systems, better outcomes
These are the top three benefits we see when organisations optimise their cloud projects:

Security: Improved by bringing in more products or solutions, like SASE.
Performance: Greater focus for internal and external teams on project areas that will deliver on KPIs.
Network: This has become more complex in recent years; IoT devices, cloud applications, remote employees and security issues are all adding to concerns. Greater visibility means quicker decision- making, better allocation of resources and improved performance.

It’s vital to get the right partners in all areas – but network, in particular, is crucial. This requires centralised support that can scale across all locations rather than having disparate teams with varying levels of experience spread over multiple sites.

Creating connectivity issues is a major regret

Hindsight is a wonderful thing. Many IT leaders regretted not plugging in certain cloud features during previous migration projects. But they’re now out to fix that.

Takeaway: planning for success
The ‘regrets’ listed above reveal crucial areas of cloud project planning you should address from the outset. Here’s our take on why they matter:
 
Flexible/private connectivity/SASE: When cloud projects are a success, they’re followed by more requests that fixed connectivity might not handle. Planning for flexible connectivity to scale up with demand during projects and scaling down when assessing, testing or optimising mitigates this problem.
API integration: Automation is increasingly occurring across the IT stack, helping streamline processes and enabling the best experiences for customers and employees.
Integrating voice: Bringing voice into contact centres or collaboration applications can provide a better user and customer experience, which are critical for daily operations.
Hybrid/multi-cloud orchestration: If enterprises deal with multiple cloud deployments from different vendors, this aspect can improve infrastructure performance and reliability and reduce costs.
 
The table above shows that most firms that have not yet factored connectivity into their cloud migration strategy are set to do so.

Top three negative impacts of overlooking:

Among IT leaders overlooking the aspects set out on the previous page, more than nine in ten admitted it had caused problems in their business. Negative outcomes include poor user experience, increased costs and security issues. All ultimately deliver a hit to the bottom line.

Takeaway: overcoming strategy gaps
Common unintended consequences of cloud project oversights include:
 
Security issues
Decreased productivity
Poor user/customer experience
Negative perception of cloud migration
Delayed/scaled-back projects
 
In addition to the problems above, respondents pinpointed network issues they’ve encountered. Network quality (33%) was the most prevalent, followed closely by security snags (32%)
and cost (30%). But other network wrinkles persisted: from installation and reliability issues to latency and throughput problems. This shows the critical importance of connectivity in migration projects. Get it wrong, and the problems can be significant
How Colt can help
We support businesses through cloud projects, from planning to implementation and optimisation. Here are the key ways we can help migrate your business operations:   Cloud connectivity

We are the perfect partner for you to accelerate your digital transformation and embrace change  in an increasingly connected world:

Customer-first: Our industry-leading NPS score underlines our customer-first approach, enabling us to provide you with a painless experience.

User experience (UX): Our interactive customer portals give you complete visibility and control of your network, allowing you to scale bandwidth up and down in minutes.

Innovation: We’re recognised leaders in SDN/ NFV solutions and are taking customer experience to the next level with AI and machine learning technology.

When it comes to hybrid and multi-cloud projects, we can help connect your on-site premises, your edge locations and the cloud.

Voice

Contact Centre as a Service (CCaaS): We help you dramatically improve the service you provide your customers while enhancing the productivity and performance of your agents with our full cloud contact centre solution, which offers a full-service wrap of numbers, connectivity and software.

Together with Atos and powered by NICE CXone, we offer an easy-to-deploy omnichannel solution that provides the tools and data-driven insights to support your customer experience strategy and organisational outcomes with a productive and fully remote workforce.

Intelligent Communications: Colt Intelligent Communications combines the power of Microsoft’s cloud productivity applications with enterprise communication tools. This integrated solution includes enterprise productivity and unified communications applications; Microsoft Office 365, high-bandwidth fibre connectivity, professional services for transition and deployment, handset and headset delivery and enterprise-grade voice services.

Sustainability

Sustainability is a core ingredient of Colt’s DNA and future business strategy. That’s why we’re taking ownership to reduce our environmental impact globally and make sustainability a key strategic driver. It matters at all levels of our organisation. As part of our sustainability journey, we’ve set comprehensive near-term science-based targets to cut emissions. We’re working on developing our long-term targets and net-zero strategy.                                          

On Demand

Colt On Demand represents a genuine breakthrough for enterprises that need fully flexible connectivity solutions between data centres, Cloud Service Providers and enterprise buildings. Using our simple portal, you can scale up and down your bandwidth in minutes (instead of waiting days or months) and only pay for what you use:

  • Gain control over your network with our feature-rich self-service portal
  • Benefit from real-time service provisioning and say goodbye to long delivery times
  • Choose from long-term fixed contracts or per- hour billing with no commitment
  • Connect to the cloud with a network offering that can match the cloud experience
Partners

Helping customers achieve their objectives requires an ocean of expertise across the digital society. Made up of software vendors, cloud service providers, data centres and technology partners, our digital partner ecosystem has been built to ensure your digital transformation delivers on its objectives.

Together we have the power to turn your digital transformation into a digital revolution.

For more information

Want more advice on how to connect your clouds, enable cloud-based voice services, or modernise your cloud operations in a hybrid world? We’d love to hear from you.

Get in touch with us through www.colt.net/contact-us. Or visit www.colt.net/cloud to learn more.

About Colt

Colt strives to transform the way the world works through the power of connectivity – taking what’s always been in its DNA to enable customers’ success. The Colt IQ Network connects more than 1000+ data centres and over 29,000 on net buildings across Europe, Asia and North America’s largest business hubs.

Colt understands today’s shifting connectivity requirements and provides agile, on-demand and secure high bandwidth networking and voice solutions to ensure enterprises can thrive. Customers include data-intensive organisations spanning over 210 cities in more than 30 countries. Colt is a recognised innovator and pioneer in Software Defined Networks (SDN) and Network Function Virtualisation (NFV).

Privately owned, Colt is one of the most financially sound companies in the sector, and because of this, it’s able to put its customers’ needs at its core. For more information, please visit www.colt.net.