Research report

Cloud 2020:

Cloud Accelerates
with Urgency

Advancing the shift to second-generation
cloud for a changed world

Introduction

From cloud uptake to cloud ubiquity

Any doubts about the utility of the cloud have been put to rest in 2020. Amid global health and economic crises, businesses are maintaining their operations, employees are working remotely, scientists are collaborating on vital research, and families and friends are connecting in ways that were unthinkable not long ago. That’s due to cloud computing capabilities.

Cloud adoption rates are accelerating with unprecedented urgency. In April 2020 for instance, CNBC reported that daily downloads of cloud-based video communications provider Zoom’s app had increased 30 times year-on-year, and the number of daily users on the platform spiked at 200 million in March—up from 10 million just three months earlier.1

In times like these, it’s hard to believe that just two years ago, a McKinsey study found enterprise cloud adoption to be “low,” with the average enterprise having achieved less than 20 percent public or private cloud adoption.2 Today’s business landscape tells a very different story.

Our new research confirms this trend:

  • More than half (53 percent) of businesses have now migrated most or all of their mission-critical workloads to the cloud.

  • More than two-thirds (67 percent) say that cloud native is integral to their firms’ competitiveness.

  • A quarter (25 percent) of businesses have deployed an autonomous database; it is a strategic priority among a further third (35 percent) of firms.

For business leaders, the message is clear:

Cloud adoption is accelerating with urgency, as firms set their sights on the next generation of cloud computing capabilities.

 

A new frontier for a new normal

The first-generation of cloud technology transformed businesses. Public clouds built with conventional infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) capabilities gave existing firms new-found speed, scalability, and operational cost-efficiency. It also bred countless new firms with pioneering business models.

Now, its successor is taking shape. Second-generation cloud gives businesses the ability to master the intelligent technologies that are becoming increasingly integral to competitiveness. And many firms now recognize the necessity.

“Most companies were always planning on moving most of their existing workloads to the cloud over the next 5 to 10 years,” says David Linthicum, chief cloud strategy officer at Deloitte. “Now, they're compressing that to 2 to 5 years.”

We wanted to understand how businesses are doing that. So we surveyed 1,150 senior executives whose firms are at different stages of cloud implementation but have at least nascent plans to move to a cloud native application environment.

In this report, we delve into the results. Where does second-generation fit within their broader cloud strategy—and how is it enabling their ambitions for the digital future? Are they ready for the autonomous enterprise? And have they come to terms with the security advances and skills capabilities required to seize the opportunities ahead?

At a glance

Businesses are speeding toward cloud native

The share of applications developed in the cloud is set to double by 2025. What’s more, cloud native forms a core part of the cloud strategy for almost a quarter (23 percent) of firms—a select group we call the “cloud leaders.”

At a glance

Second-generation cloud heralds the autonomous enterprise

Cloud leaders have gained an edge by adopting a vital component of enterprise autonomy: the autonomous database. While it has been deployed by 25 percent of all surveyed firms, for cloud leaders, the figure is 37 percent.

At a glance

Cloud security is helping mission-critical migration

Most respondents (63 percent) say the cloud has improved protection from cyberattacks without threatening the integrity of their mission-critical workloads.

At a glance

Firms must focus on skills in conjunction with technology

Among firms’ toughest obstacles to cloud adoption are skills gaps in the workforce. While survey respondents consider workforce skills to be the area of the business that is least compatible with operating in the cloud, there are ways to overcome this challenge.

What do we mean by second-generation cloud?

Technology capabilities are advancing, fundamentally altering enterprise computing by changing the way organizations receive, manage, and secure business data. In tandem, intelligent automated systems are quickly taking hold in many industries. Together, these shifts are paving the way for a new generation in cloud computing—the second-generation cloud—which builds on the features and lessons of the first-generation cloud to provide a new infrastructure and a full set of platform capabilities.

One of the features of second-generation cloud is its support for a cloud native application architecture. That kind of architecture is used by a growing number of businesses that are building or recreating their applications directly in the cloud using technologies such as PaaS, microservices, containers, and autoprovisioning.

Another feature is autonomous systems. These are intelligent, self-governing information systems that are powered by artificial intelligence (AI) and machine learning (ML).

About the research

The analysis in this study is based on a survey of 1,150 senior executives, which was carried out on behalf of Oracle by Longitude, a Financial Times company, between January and March 2020.

The respondents are based in 19 countries, with the EMEA region accounting for 39 percent; Asia Pacific, 26 percent; North America, 22 percent; and Central and South America, 13 percent. Of the 14 sectors represented, the largest groups are banking, financial services and insurance (BFSI), industrials and chemicals, real estate and construction, hospitality and leisure, professional services, and energy, mining and utilities, each of which contributes 10 percent.

Most of the respondents are from large organizations, with 78 percent in firms earning annual revenue of US$1 billion or more and the rest in firms earning between US$500 million and US$1 billion.

And they are in senior positions. One in five (20 percent) are in C-suite roles, and the rest hold other senior positions (vice-president, director, head of department, senior manager). They work in a range of different functions, including operations and production (15 percent), procurement (15 percent), marketing (13 percent), IT (12 percent), and strategy and planning (12 percent).

To gather additional insights for this report, Longitude also undertook in-depth interviews with the following executives and subject-matter experts:

  • Dr. Gerard Gorman, reader in computational science, Imperial College London

  • Fred Kost, vice president of product marketing—security, Oracle

  • David Linthicum, chief cloud strategy officer, Deloitte

  • Chris Pasternak, managing director, Accenture

  • Eliseu Rocha, head of IT and Infrastructure, Grupo DPSP