Infosys, a leader in next-generation digital services and consulting, today unveiled the Infosys Cloud Radar 2021 which has revealed the links between enterprise cloud usage and business growth. The independent study shows that enterprises in the 6 regions surveyed can add up to $414 billion in net new profits, annually, through effective cloud adoption.
The study found that the highest performing businesses had annual profits growth that correlated with using cloud in six ways.
1. Speed up how they develop and launch new solutions
2. Add new functions to software in use
3. Expand processing capacity
4. Foster collaboration
5. Unlock value from data via AI
6. Discover new revenue sources.
We asked Umashankar Lakshmipathy, Senior Vice President & Regional Head (EMEA) at Infosys about whether he thinks the acceleration in cloud adoption is due to the pandemic and whether or not he thinks this acceleration will continue, he replied:
“Our study has unearthed that for around 65% of organisations, the pandemic has indeed been a catalyst for cloud adoption. However, on the flip side 35% of companies with stronger cloud performance had already begun accelerating their shift to cloud before the pandemic took hold. The benefit for these organisations has been twofold: Companies with more established cloud systems when the pandemic hit could firstly better navigate business disruptions, and secondly return focus to strategic business goals. For those not prepared to use cloud to connect and collaborate at the outset of the pandemic, that developed into a full-time job and top priority. It’s the work that companies did pre-pandemic that really set them up to achieve better business performance in the cloud today.”
Distinct performance cohorts
The research describes four distinct performance cohorts – minimally effective, effective, highly effective, and exceptional. This means businesses can benchmark themselves against each cohort by exploring the cloud radar digital experience and learn how to improve their cloud strategy and performance.
- Exceptional performers (16%) use a larger mix of cloud service providers and more frequently employ hybrid cloud arrangements.
- Highly effective performers (19%) have shifted nearly as many business functions to the cloud as exceptional performers. They are motivated to use cloud for accelerating deployment of new solutions and services.
- Effective performers (33%) have rapidly shifted business functions to cloud but started with fewer business functions in cloud two years ago. This cohort is more focused on cloud for cost savings than better-performing peers.
- Minimally effective performers (32%) are least likely to use public cloud and have the least certainty in estimating cloud expenditures.
Despite the acceleration in cloud adoption, only a fraction of large companies reached the highest level of performance and adoption. The Cloud Radar study found that nearly 1 out of 6 companies achieved exceptional cloud performance. In cloud adoption terms, fewer than one in five have crossed the 60% threshold to reap the profit benefits. By 2022, more than 40% of enterprises surveyed plan to shift over 60% of systems into the cloud, from 17% today.
Lakshmipathy explained how the future of the cloud is multi-faceted. “Between AI, industry-specific specialisations, regulatory standards, and regional legal requirements, companies will find themselves using a mix of clouds. The cream of the crop will develop the ability to adjust and orchestrate their clouds rapidly and frequently. Getting this right requires clear strategy and transparent orchestration. Companies using AI and data in the cloud will hit upon a virtuous cycle that leads them to more AI, more data, and more cloud. Cloud expands to handle more data and then to provide more compute for next-level AI functions. Better AI then requires more data and more data requires more cloud. The cloud has landed and is here to stay.”