August 10, 2015

Why are so few large Nordic enterprises using the cloud to full effect?

Erik Johannisson

Head of Strategic Marketing and Marketing for Technology Services and Modernization, Tieto

Cloud services are widely used by large Nordic enterprises today, but according to a new study that Radar has conducted on behalf of Tieto, many of them aren't as cloud mature as they might think.

The cloud has been around for a while now, and today, the majority of large enterprises in the Nordic countries are using cloud services to some degree.

But are these organisations using the cloud to full effect? And how "cloud mature" are they, really?

Answering these questions was the aim of a new study that Radar conducted on our behalf, Benefits of Cloud Maturity: Cloud Maturity Index 2015. It looked at almost 300 large organisations across the region. We wanted to find out how mature organisations are when it comes to cloud adoption, what their barriers and drivers are, and how this has changed the way they do business.

The two dimensions of cloud maturity

Radar's maturity model looks at both the strategic and operational dimensions of cloud adoption. For an organisation to be considered strategically mature, it has to demonstrate an established strategy and definition of cloud services, the knowledge and ability to act on that strategy, and a sophisticated view of the drivers for cloud usage.

To be considered operationally mature, meanwhile, it has to demonstrate high cloud usage and penetration as a proportion of its IT portfolio, as well as sound procurement practices.

How cloud mature is the average Nordic organisation?

What we found was on average, large Nordic enterprises have a strategic cloud maturity of just 3.5 out of ten. Their operational cloud maturity is a little higher, at 5.3 out of ten.

To break this down further, 51 per cent of organisations are of a basic maturity. 21 per cent are more proficient in their cloud usage, while just ten per cent can be considered both strategically and operationally mature. The rest are immature.

So, why are so few large Nordic enterprises using the cloud to full effect? One of the reasons could be what we've called the "strategy debt": only a small handful of organisations have anchored the entirety of their cloud usage in an established strategy.

What are the benefits of cloud maturity?

Moving to the cloud is no guarantee of success in itself, but we can see from the study that the top ten per cent of Nordic enterprises - those that can be considered both strategically and operationally mature - have a wide range of advantages over their peers.

For one thing, they have greater control over their budgets. While cloud services account for twice as much of their total IT spend as in other organisations, this spend itself is 34 per cent lower.

Even so, for cloud mature organisations, optimising spend is just one driver for cloud usage. Others include the ability to support innovation and business development, for example, and to reduce time-to-market for new products and services. Their less mature counterparts, by contrast, care mostly about cutting costs.

Additionally, 71 per cent of cloud mature organisations use a combination of software, platform and infrastructure-as-a-service. Of the others, the figure is just eight per cent - and for those of basic maturity, software-as-a-service is the beginning and end of their cloud journey. So, the top ten per cent achieve wider, deeper and more sophisticated cloud usage than their peers.

How would your organisation measure up? Are you using the cloud to full effect, or are you lagging behind strategically, operationally, or both?

To learn more, read our study: Benefits of Cloud Maturity: Cloud Maturity Index 2015.

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