A report from The Economist Intelligence Unit

Ascending cloud:
The adoption of
cloud computing
in five industries
Executive summary

Sponsored by
 Ascending cloud: The adoption of cloud computing in five industries
Executive summary

Contents

Introduction 2

Cloud computing—findings for all industries 3

Manufacturing—a special case of cloud adoption 8

1 © The Economist Intelligence Unit Limited 2016

 Ascending cloud: The adoption of cloud computing in five industries
Introduction
A new report published today March 1, 2016 by
The Economist Intelligence Unit (EIU), sponsored
by VMware, predicts that cloud computing will
grow at a rapid pace to become a factor in the
digitisation of major industries.
• Cloud computing has strong growth potential,
with only 7% of all IT and business executives
surveyed believing it currently has a pervasive
presence across all industries.
• However, a diverse range of global executives
predict the rapid growth of cloud in five key
industries: banking, retail, manufacturing,
education and healthcare. Approximately
70% of panelists expect cloud will be a major
factor across their own industry in five years.
• Across all industries, the greatest challenges
were seen to be ensuring data security (47% of
all executives) and finding qualified personnel
to build out and operate cloud systems (35%).
2 © The Economist Intelligence Unit Limited 2016
Executive summary
Ascending cloud: The adoption of cloud
computing in five industries, sponsored by
VMware, is based on a global survey of 360 senior
executives who are familiar with cloud computing
in their industry and country. The sample was
comprised of senior executives, with over half of
them from the C-Suite of their companies or
non-profit organisations. The panel was divided
equally into sub-panels representing the banking,
retailing, manufacturing, education and
healthcare industries. Developed and developing
countries were equally represented in the survey.
For the full report, which contains an analysis of
manufacturing, click here. Please click here for
the reports on healthcare and continuing
education.
The following is a summary of the key findings of
the report. For further information, please contact:
West Coghlan
Senior Editor, Technology
Economist Intelligence Unit
westcoghlan@economist.com
 Ascending cloud: The adoption of cloud computing in five industries
Executive summary

Cloud computing—findings for all

industries

1. Current presence of cloud computing

On a global basis, cloud is seen as having a significant current presence (43%), but with significant
potential to grow (only 7% of respondents said cloud was pervasive at the current time).
Current rates of cloud penetration differ by industry. Information-based industries such as banking
lead in penetration, while “physical” industries such as manufacturing and regulated ones like
healthcare and education appear to be adopting cloud more slowly.

How would you characterise the current presence of cloud in the following industries?
% of respondents reporting a significant or pervasive presence
Pervasive presence
Significant presence
1
7
57
52
7 7

42 10 43
8
34
31

Banking Retail Manu- Education Healthcare Industry

facturing average
Source: EIU Survey “Cloud Computing and Economic Development”, October 2015

3 © The Economist Intelligence Unit Limited 2016

 Ascending cloud: The adoption of cloud computing in five industries
Executive summary

2. The growth of cloud across 3. The challenges of cloud

all industries
Cloud is expected to grow rapidly from this
relatively low base. Almost 70% of panelists
believe that cloud computing will be a major
factor across all surveyed industries in five years.
The deployment of cloud is seen to have
significant challenges. As is the case in many parts
of the technology industry, data security is held to
be the greatest challenge to the deployment of
cloud. Poor infrastructure was seen as a particular
challenge in developing countries. The availability

Rate of cloud penetration of qualified personnel is seen as a challenge

% saying cloud will be a moderate or major factor across industries on a global basis.
Average of all industries

Major factor
Moderate factor What are the greatest challenges to cloud?
In order of importance
69 (% respondents)
40
Hacking, cyber-crime and cyber-espionage
47
19 Poor infrastructure
37
Qualified personnel
47 36
43 Consumer resistance
29
Foreign competition
21 29
Lack of entrepreneurs
28
Poor education system
In one In three In five
year years years 26
Vested interests
Source: EIU Survey “Cloud Computing and
Economic Development”, October 2015 25
Lack of capital
22
Competes with existing business
20
Government regulation
15
Source: EIU Survey “Cloud Computing and
Economic Development”, October 2015

4 © The Economist Intelligence Unit Limited 2016

 Ascending cloud: The adoption of cloud computing in five industries
Executive summary

4. Cloud computing and 5. The impact of cloud on the

banking
There is an expectation of rapid adoption of
cloud in banking—almost three out of four predict
cloud will be a major factor in banking in five
years. Cloud is expected to be deployed to
support a range of banking products, and to
enable the extension of banking services to poor
and remote populations.
Future cloud penetration of the
banking industry
% saying cloud will be a moderate or major factor
retail industry
Our retail experts expect a similar pattern of rapid
cloud penetration in the retail industry, with 70% of
panelists expecting cloud to be a major factor in
the industry in five years. From a relatively modest
base, the expectation is that cloud will grow
five-fold as a major factor in retailing. One of the
impacts of cloud appears to be making retailing
more consumer-friendly, as a technology being
used to increase access, lower prices and
reducing costs for the customer.

Major factor Future cloud penetration of the retail industry

Moderate factor
53 74 % saying cloud will be a moderate or major factor

Major factor
19 Moderate factor
70
43
52
14
36
57

15 41

In one In three In five 23

year years years

Source: EIU Survey “Cloud Computing and

Economic Development”, October 2015 In one In three In five
year years years
Source: EIU Survey “Cloud Computing and
Economic Development”, October 2015

How important is cloud in supporting

sectors of the banking industry?
% saying cloud will be somewhat or very important
Very important
Somewhat important
New ways to make payments
68 21
Lowering banking costs
60 32
Banking for remote populations
How important is cloud in supporting
sectors of the retail industry?
% saying cloud will be somewhat or very important
Very important
Somewhat important
Reducing costs of goods and services
58 33
Helping new companies grow

57 34 49 45
New ways of saving Increasing access to retail

50 45 48 41
Banking for poor populations
Making goods more available
43 42 43 44
New ways of lending
Making shopping more convenient
42 47
40 51
Source: EIU Survey “Cloud Computing and
Economic Development”, October 2015 Source: EIU Survey “Cloud Computing and
Economic Development”, October 2015

5 © The Economist Intelligence Unit Limited 2016

 Ascending cloud: The adoption of cloud computing in five industries
Executive summary

6. The impact of cloud on 7. Cloud computing and

manufacturing education
Manufacturing is expected to experience a high Education shows a somewhat slower initial
rate of cloud penetration, with 71% of panelists adoption rate than other industries, but with
projecting it will be a major factor in the industry in acceleration in the 3-5 year timeframe. Possible
five years. Cloud is expected to impact each reasons include a less competitive environment
stage of the manufacturing value chain, from and traditionally slower rates of technology
suppliers to distribution to customers. adoption by government.1 Cloud is expected to
impact all sectors of education, but with the
greatest impact on higher education.
Future cloud penetration of the
manufacturing industry
% saying cloud will be a moderate or major factor Future cloud penetration of the
Major factor education industry
Moderate factor % saying cloud will be a moderate or major factor
71
43 Major factor
Moderate factor
67
15 20 29

46 43 55
47

21
18
In one In three In five
year years years In one In three In five
year years years
Source: EIU Survey “Cloud Computing and
Economic Development”, October 2015 Source: EIU Survey “Cloud Computing and
Economic Development”, October 2015

How important is cloud in supporting

How important is cloud in supporting
sectors of the manufacturing industry?
% saying cloud will be somewhat or very important
sectors of the education industry?
% saying cloud will be somewhat or very important
Very important
Somewhat important Very important
Somewhat important
Supporting production processes
Higher education (university)
60 30 51 34
Better supply chain management Education for remote areas

54 35 42 38
Continuing/adult education
Enabling design and prototyping 40 44
52 39 Mid-level students (ages 11-17)

40 46
Inventory, orders and distribution
Education for low-income
48 40
34 42
Source: EIU Survey “Cloud Computing and
Economic Development”, October 2015 Educating young students (ages 3-10)

25 48
1. Information Week, Public
Sector Slow to Adopt Source: EIU Survey “Cloud Computing and
Cloud Computing, June Economic Development”, October 2015
2012

6 © The Economist Intelligence Unit Limited 2016

 Ascending cloud: The adoption of cloud computing in five industries
Executive summary

8. Cloud computing and

healthcare
Cloud is expected to become a major factor in
healthcare by 61% of healthcare experts. Cloud is
geared to support remote diagnostics and
treatment, helping to empower the patient with
knowledge of their own condition. It may also
support the extensive data requirements of
preventative care, supporting a long-term industry
goal of holistic medicine.

Future cloud penetration of the

healthcare industry
% saying cloud will be a moderate or major factor

Major factor
Moderate factor 61
32

25 49

26 28

In one In three In five

year years years

Source: EIU Survey “Cloud Computing and

Economic Development”, October 2015

How important is cloud in supporting

sectors of the healthcare industry?
% saying cloud will be somewhat or very important

Very important
Somewhat important
Centralisation of health records

57 27
Supporting preventative care

53 32
Care for low-income populations

45 35
Supporting remote diagnosis

44 32
Supporting remote treatment

43 37
Source: EIU Survey “Cloud Computing and
Economic Development”, October 2015

7 © The Economist Intelligence Unit Limited 2016

 Ascending cloud: The adoption of cloud computing in five industries
Executive summary

Manufacturing—a special case of

cloud adoption

Our panelists were asked for their views on which industry will have most impact on economic growth. By
a sizeable margin, manufacturing was expected to make the greatest contribution to economic
prosperity. With this in mind, a deeper analysis was made of the impact of cloud on manufacturing. The
manufacturing sub-panel was asked to assess cloud’s impact on four key stages in the manufacturing
value chain—supply chain, design and prototyping, production and distribution to customers.

Which sectors will drive economic growth?

Which of the following do you feel will have the greatest impact on your country’s overall economic
prosperity in the next three years?
(% respondents)

New forms of manufacturing through new technologies 28

New forms of education through new technologies 20
New forms of retailing through new technologies 20
New forms of banking through new technologies 18
New forms of healthcare through new technologies 13
Source: EIU Survey “Cloud Computing and Economic Development”, October 2015

1. Cloud and the What will be the importance of cloud in

manufacturing supply chain manufacturing supply chain in one year’s
time?
(% respondents)
Cloud will have a strong impact on supply chain
management, with 89% of manufacturing experts
1 10 Very
saying cloud will be somewhat or very important. unimportant
Interviews with experts identified cost reduction, Somewhat
unimportant
expanding the base of suppliers and the ability to
Somewhat
track shipments as areas where cloud may make important
54 35 Very
a contribution.
important

Source: EIU Survey “Cloud Computing and

Economic Development”, October 2015

8 © The Economist Intelligence Unit Limited 2016

 Ascending cloud: The adoption of cloud computing in five industries
Executive summary

2. Cloud and design and What will be the importance of cloud in

prototyping manufacturing design and prototyping in
one year’s time?
(% respondents)
90% of manufacturing experts predict cloud will
be somewhat or very important in the design and
4 6 Very
prototyping stage of manufacturing. They unimportant
identified cost reduction, acceleration of time to Somewhat
unimportant
market and product customisation as activities
Somewhat
that could become cloud-enabled. important
51 39
Very
important

Source: EIU Survey “Cloud Computing and

Economic Development”, October 2015

3. Cloud computing and What will be the importance of cloud in

manufacturing production manufacturing production in one year’s
time?
Cloud will also have a significant impact on the (% respondents)

production phase, with 90% of manufacturing

experts saying cloud will be somewhat or very 4 6 Very
unimportant
important. Manufacturing experts identified Somewhat
unimportant
increased operating efficiencies and boosting
Somewhat
manufacturing flexibility as processes that cloud 30 important
could support. Very
60 important

Source: EIU Survey “Cloud Computing and

Economic Development”, October 2015

4. Cloud and the What will be the importance of cloud in

manufacturing customer manufacturing distribution and customer
relationships in one year’s time?
(% respondents)
88% of manufacturing experts believe that cloud
will be somewhat or very important in the 1 10 Very
distribution and customer relationships stage of unimportant
Somewhat
manufacturing. Manufacturing experts identified unimportant
increased visibility into shipments and increased Somewhat
partnerships between suppliers and customers as 48 important
Very
two areas that might be supported by cloud 40 important
computing.

Source: EIU Survey “Cloud Computing and

Economic Development”, October 2015

9 © The Economist Intelligence Unit Limited 2016

 Ascending cloud: The adoption of cloud computing in five industries
Executive summary

Whilst every effort has been taken to verify the accuracy

of this information, neither The Economist Intelligence
Unit Ltd. nor the sponsor of this report can accept any
responsibility or liability for reliance by any person on this
report or any of the information, opinions or conclusions
set out in the report.
Cover: Shutterstock

10 © The Economist Intelligence Unit Limited 2016

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