Trends in Cloud IT: Dissecting Adoption Across Thousands of Organizations
June 11, 2015
7 minute read
You’ve heard it before: the shift to the cloud is underway. What you haven’t heard, or seen for that matter, is a comprehensive look at the demographics of 1,500 IT professionals and the factors contributing to their adoption of cloud IT.
For four years, BetterCloud has been at the forefront of the shift to the cloud, specifically as it relates to cloud office systems. Our insights, management, and security tools for cloud office systems, combined with our commitment to creating a world-class customer experience, have helped us develop a network of IT professionals from around the world that we count as customers.
From a network of more than 95,000 IT professionals, we identified and surveyed 1,500 who represent organizations from 53 countries. Our goal was to better understand the pace of cloud IT adoption, the differences in cloud office systems and their customers, the current and expected usage rates for cloud applications, and the effects of cloud office systems on productivity, collaboration, costs savings, and much more.
The result: our most exhaustive dataset yet.
Survey Highlights
Cloud Adoption: The number of organizations that run 100% of their IT in the cloud is rapidly increasing. By 2022, 62% of all organizations surveyed will run 100% of their IT in the cloud.
Cloud Application Usage: Every year, organizations are replacing legacy applications and relying more heavily on cloud applications. In 2015, enterprise organizations run an average of 18 cloud applications. By 2017, that number will nearly triple (52).
The survey data uncovered several angles that deserve significant attention, leading to the decision to release our findings in a series of blog posts, rather than all at once. In our first post, we’ll take an in-depth look at the overall adoption of the cloud based on a variety of contributing factors. We’ll also explore the number of cloud applications used by organizations today, and more importantly, what that number will look like in the future (hint: significant changes ahead).
Much of the data below focuses on answers to one question: “When do you believe 100% of your organization’s IT will be running in the cloud?” This question may sound extreme, but some companies already operate in a 100% cloud environment, and while many believe they are a decade or less away, others feel they will never get there at all.
We are in the midst of a gigantic shift and it’s interesting to see who’s pioneering the change and why.
Cloud Adoption
Cloud adoption is only in its infancy, but it won’t be for long.
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Today, 12% of organizations surveyed run 100% of their IT in the cloud; in five years, nearly 50% of our respondents said they will be moving their IT entirely to the cloud; in 10 years, that number will climb past 70%.
Every year, more organizations will abandon legacy applications (think Microsoft Exchange) for their lighter, more nimble replacements: cloud applications (think Office 365 and Google Apps). In doing so, organizations of all ages and sizes will begin to rely on the cloud—not only for cloud office systems, but for their entire IT infrastructure.
“As the Director, I can vouch for the fact that I sleep so much better now that I don’t have to worry about hardware, power, backups and availability of our collaboration suite.” —Non-profit, Google Apps, 340 employees, avg. employee age: 45-54
66% of Google Apps customers who took the survey expect to run 100% of their IT in the cloud by 2022, versus only 49% of Office 365 customers.
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For some (commonly smaller, younger, and Google-based) organizations, the shift to cloud office systems is a headfirst dive into total transformation—an entirely new way of working. For others (commonly larger, older, and Microsoft-based), the transition to the cloud must be gradual. These companies likely find comfort in continuity, easing the transition by avoiding an overnight overhaul of the way people work.
“Google Apps is a great service and I am very glad we went with it. All around, it does everything we needed and more. I have been able to expand the way we do business and marketing by using Google Apps, as well as in-house IT functionality.” —Business Supplies and Equipment, 40 employees, IT 100% in the cloud
Larger organizations are much slower to fully adopt the cloud.
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By 2020, more than 50% of all SMB organizations surveyed expect to run 100% of their IT in the cloud, while enterprises are a full five years behind—not until 2025 will 50% of enterprise organizations run 100% of their IT in the cloud.
The quicker rate of adoption gives smaller organizations a distinct advantage. Small businesses can adapt faster, quickly transforming their organization and enabling employees to work from anywhere at any time. Enterprises face the challenge of transitioning potentially hundreds (or even thousands) of legacy applications to the cloud. It’s not out of the ordinary for some enterprises, particularly those using Lotus Notes, to run more than 10,000+ custom applications.
Even though enterprise organizations face a more difficult path to cloud adoption, over time, the gap between small businesses and enterprises begins to shrink.
“Office 365 is close [to ideal], but relying on on-prem infrastructure as well just increases our points of failure.” —Automotive, Office 365, 3,500 employees, 30+ years in operation
Younger workforces are much more accustomed to working with cloud applications. Many of these younger workforces consist entirely of digital natives who have grown up working in the cloud.
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More experienced workforces typically have operated on local versions of programs like Outlook, Excel, and PowerPoint for years, sometimes decades. Naturally, these organizations are not as keen to adopt new technology because it requires more training. With that said, all organizations, particularly enterprises, should understand that in order to future-proof themselves, acceptance of—and preparation for—the upcoming shift to the cloud is vital.
“Leadership is hesitant to move applications to the cloud because they think we’ll have less control of the data.” —Government, Office 365, 3,000 users, avg. employee age: 35-44
One of the strongest correlations with cloud adoption is the age of the organization itself.
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The majority (66%) of organizations five years old or younger expect to run 100% of IT operations in the cloud by 2017. Only 9% of organizations 21 years or older expect to be running fully in the cloud by 2017. Contributing factors to the slow growth for older organizations are likely infrastructure complexities, dependencies on legacy systems and the cemented business processes built around them, number of employees, and even the employees themselves, who may not be accepting of a cloud-based work environment.
Much like it does for smaller organizations, the cloud offers younger organizations an advantage over companies that are deeply entangled in legacy systems. Over time, younger organizations will be able to move at a much faster pace. Nearly all surveyed organizations (96%) that started within the last five years expect to run 100% of their IT in the cloud by 2026.IT professionals with fewer years of experience are more likely to currently run 100% of their IT in the cloud.
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These IT professionals are also more accepting of cloud IT over time, adopting it faster than more experienced IT professionals. However, IT professionals of all experience levels expect a huge shift to cloud IT over the next 10 years.
Cloud Application Usage
The following data focuses on the answers to two questions: “How many cloud applications does your organization use today?” and “How many cloud applications do you expect your organization to use in two years?”
Two years may not sound like much time, but the landscape of cloud IT will look totally different in 2017 than it does it today—in large part due to the quickly rising use of cloud applications.
Our respondents expect the number of cloud applications they use today (8) to more than double in two years (17).
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Surveyed organizations running Google Apps for Work currently average more cloud applications than those that use Office 365. However, in just two years’ time, Office 365 organizations expect to surpass those that use Google.
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Cloud application usage is relatively similar across the board, regardless of which cloud office system an organization uses. Yet there are some notable differences. This is likely due to the fact that enterprise organizations, which more commonly use Office 365, expect to use far more cloud applications in the near future than small and medium-sized businesses (as you’ll see in the next chart).
“[My dream IT product would be] cloud for all financial applications.” —Individual & Family Services, Office 365, 800 employees, 25+ years in operation
Surveyed enterprise organizations expect more than a 185% increase in cloud application usage in two years.
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The larger the organization, the more cloud applications they are likely to use today. This correlation is even more apparent when looking at expected cloud app usage in two years. By 2017, surveyed enterprise organizations expect to run, on average, 52 cloud applications. It’s expected for larger organizations to run more cloud applications, but it’s the acceleration of cloud app usage that is impressive. The data shows that we could be reaching a tipping point where enterprises are truly embracing cloud applications.
Surveyed organizations founded more than 21 years ago expect to more than double cloud application usage in two years.
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On average, younger organizations (1-5 years) run more cloud applications today than organizations that have existed for more than five years. Organizations founded 21 or more years ago expect the greatest increase in cloud app usage.
On average, IT admins with fewer years of experience currently run the least amount of cloud applications.
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Our data shows that IT professionals with more experience currently work for organizations that run more cloud applications today. When asked how many cloud applications these IT admins expect to run in the next two years, the data becomes a bit more muddled. However, it is clear that admins with the most experience (16+ years) expect to be running more than double the number of cloud applications in two years than they are today.
What We’ve Learned
We are at the beginning of the biggest shift in IT in more than 20 years. The growing use of cloud office systems and the increasing reliance on cloud applications is driving us to a tipping point—an entirely new way of working.
Cloud office systems are the foundation of the transition to the cloud, serving as the gateway to overall cloud adoption. Running 100% of IT in the cloud was unthinkable only a few years ago, but as our data shows, in less than 10 years it will be the norm.
The change of organizational philosophies brings change for IT, too. IT admins are set to undergo a drastic change in the way they work, taking on a much more proactive role within the organization. Ultimately, the way everyone works will fundamentally change and improve; the data we’ll publish in the near future proves this.
Next Up in Trends in Cloud IT: Google Apps for Work vs. Office 365
Two companies are serving as the focal point of the shift to cloud IT: Google and Microsoft—the only two true players in the cloud office system space.
For a short time, Google was the only cloud office option, making it an easy choice for progressive organizations. Yet the recent entrance of Microsoft’s Office 365 suite is a pivotal moment for overall cloud adoption; it’s a loud-and-clear signal that says, “This shift to cloud IT is real. Take notice.” Our data from IT professionals around the world echoes that sentiment.
Organizations that have relied on legacy Microsoft and Lotus Notes products for decades are slowly transitioning to Office 365, joining a crop of early adopters that have already gone all in with Google Apps for Work.
In our next post, Google Apps for Work and Office 365 are going under the microscope. We will be releasing never-before-seen data and comparing the suites in-depth to see how they differ when it comes to adoption and usage rates, financial impact, the effect of each one on IT work habits, and much more.
