Research report

Cloud 2020:

Cloud Accelerates
with Urgency

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


Going native: The next-generation cloud
wins the long game

Second-generation cloud marks a move—a shift away from traditional monolithic architectures, and toward developing applications directly in the cloud.

In that cloud native environment, companies can use microservices, containers, autoprovisioning and PaaS to build the kind of applications that are so integral to digital competitiveness today: APIs, mobile apps, chatbots.

It’s still early days, but the momentum behind this shift is growing—and today’s business environment will only accelerate the trend.

On average, our surveyed firms develop 5 percent of their new applications in the cloud, and they expect that figure to have risen to 10 percent by 2025 (see Figure 1). The share of their applications running open-source in the cloud, meanwhile, will rise from 8 percent to 13 percent over the same timeframe.

Firms are further ahead on migration. More than a quarter of their applications (27 percent) have been migrated to the cloud, rising to 41 percent by 2025. Many of these will be refactored—recreated to run directly in the cloud without losing performance or capability—to run seamlessly in a cloud native environment.

Figure 1. Share of applications developed in or migrated to the cloud, 2020 and 2025

  • Developed in the cloud from scratch

  • Open source in the cloud

  • Migrated to the cloud

  • In the process of migrating

  • Not cloud-based


The reasons for the shift are obvious. “Cloud native offers scalability, flexibility, resiliency, and simplicity,” says Chris Pasternak, managing director at Accenture.

“Cloud native takes away most of the management requirements,” he says. “Firms can execute their growth strategy without having to spend a lot of time planning and guessing how the business is going to grow over the next 6 or 12 months.” This simplicity also contributes to faster speed to market, he says: “How much time does an organization spend standing up servers and installing software when it could deploy a data analytics platform in hours or minutes?”

Governance is another benefit, according to Deloitte’s David Linthicum. “Microservices, container-based systems, configuration management—they all give you the ability to manage very complex deployments using sophisticated tools that can abstract you from the complexity.”

Figure 2. How respondents see cloud native

Making our apps, DevOps, and workloads cloud native is integral to our organization being competitive

Cloud native workloads and applications open up opportunities for deeper collaboration between development teams

  • Agree

  • Disagree

  • Neutral

Migration maximizes

The migration of on-premises applications, particularly older or complex ones, can be a challenge for cloud native adoption, even in the best of times. Refactoring the applications to run in a cloud native architecture is the surest way to maximize their performance, although this can be time-consuming and, in the current business environment, some companies may choose to delay it. There are options available to them short of refactoring, such as replatforming (rebuilding or redeploying an application on an upgraded operating system) that can confer at least some of the performance advantages the cloud offers.

And while the investment needed for businesses to establish their first- and second-generation cloud infrastructure may be high, the majority are convinced it is valuable in the long run. In fact, the majority of survey respondents agree that investing in a cloud native future is critical to the success of their business. More than two-thirds (67 percent, and 75 percent in the banking, financial services and insurance sector) say that shifting their applications, DevOps and workloads to a cloud native architecture is integral to their firms’ competitiveness (see Figure 2).

For Brazilian pharmacy retailer Grupo DPSP, the return on investment that cloud infrastructure offers is the ability to meet the time-to-market needs of the business. Eliseu Rocha, head of IT and infrastructure at Grupo DPSP, says: “Adoption of a cloud-based infrastructure that allows efficient and flexible allocation of resources and greater agility in deliveries, means that—even with the addition of new volume in demand—we can guarantee growth and levels of customer service, in addition to solving the seasonality challenges of business.”

“Adoption of a cloud-based infrastructure means that—even with the addition of new volume in demand—we can guarantee growth and levels of customer service.”

Eliseu Rocha, Head of IT and Infrastructure, Grupo DPSP

Meet the leaders

We have identified in our findings a group of “cloud leaders,” who say cloud native is a core part of their strategy. Another group, the “aspirers,” are pursuing cloud native as one element of a wider cloud strategy. Then there is a third group, the “followers,” whose cloud native plans are more tentative—they say they intend to test the approach (see Figure 3).

Figure 3. The size of the cloud leader, aspirer, and follower groups

Note: due to rounding, numbers do not add up to exactly 100%.

As we will see, the leaders are more advanced than the firms in the other groups—and considerably more advanced than the followers—in their development of some second-generation cloud capabilities.


The leaders are:

  • Ahead in developing applications in a cloud environment, or moving them to one

  • Well ahead in the adoption of autonomous technologies, including autonomous database

  • More advanced in their use of AI and ML

  • More likely to have moved all mission-critical workloads to the cloud

  • More likely to say ML and data science capabilities will enhance their cloud operations

“Cloud native offers scalability, flexibility, resiliency, and simplicity.”

Chris Pasternak, Managing Director, Accenture