IDC Survey: Majority of Manufacturers use Cloud

IDClogoA majority of manufacturers worldwide have turned to cloud services for at least two applications, according to results from a the recent IDC survey, Worldwide Cloud Adoption in the Manufacturing Industry

The report, which analyzes current and future trends for cloud adoption in the manufacturing industry, found that 66% of respondents are using public cloud for two or more applications and 68% are using private cloud.

In conducting the report, IDC questioned 593 manufacturers from 17 countries across North America, South America, Europe, and the Asia-Pacific region. 73.7% of respondents were IT professionals, and the remaining 26.3% were line of business (LOB) professionals.

61.6% of respondents indicated a “cloud also” strategy for new and replacement IT investments. “Cloud also” is defined by IDC as a strategy in which businesses consider cloud as well as traditional on-premise IT solutions.

Traditional IT spending is on the decline, according to a statement from IDC, but manufacturers are finding significant advantages from cloud computing, such as flexibility and low cost, as their IT organizations adopt cloud. In the statement, the IDC encourages manufacturers to “update their cloud roadmaps to ensure their investments benefit the business.”

“Because of cloud’s tremendous value in making IT resources available to the business based on business terms –speed, cost, and accessibility- manufacturers must  ensure that the line of business and IT management work together in defining their requirements,” said Kimberly Knickle, research director, IDC, in the statement.

There are some regional variations in the report’s results: only 41% of respondents in the United States indicated that they are accessing resources via public cloud, while in Europe almost 50% said that have adopted or will adopt ERP in the public cloud. In the Asia-pacific region, 495 of respondents are using cloud or plan to do so.

At present, IT operations are reaping most of the benefits from manufacturers cloud adoption; only 30-35% of respondents indicate  that operations, supply chain and logistics, sales or engineering expect to benefit.

The status quo won’t last long, though.

IDC predicts a paradigm shift in manufacturer use of cloud computing as the Internet of Things (IoT) continues to emerge. Cloud computing, IDC says, will bring “significant value” to manufacturers by allowing them to easily make sense of the torrential stream of data coming from connected products, devices, and machinery in the supply chain.

Several major cloud service providers (Amazon and Microsoft come to mind) have already made plays at the IoT market.

IDC experts say that, in the short term, manufacturers will prefer using private cloud for internal IT infrastructure, due to security concerns, overblown or not. However, IDC predicts that manufacturers will shift to public clouds for noncritical efforts as confidence in public cloud security increases.

For more information on IDC’s survey check out their video below, or read the official press release.

Jeff Edwards
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