HOW BUSINESS FUNCTIONS ARE DRIVING PUBLIC CLOUD ADOPTION ACROSS THE TECHNOLOGY, MEDIA & ENTERTAINMENT INDUSTRY
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1 HOW BUSINESS FUNCTIONS ARE DRIVING PUBLIC CLOUD ADOPTION ACROSS THE TECHNOLOGY, MEDIA & ENTERTAINMENT INDUSTRY Telecoms, Media & Entertainment Industry Report Contents Executive Summary Context for the Sector Key Findings About the Research Why This Study? Recommendations
2 Executive Summary After a tough period of economic difficulty, the Telecoms, Media & Entertainment () sector is rebounding and recovering to the point where few can doubt the impact the sector is having on new and old economies. Despite being a relatively young industry, it is regularly creating disruptive technologies that blur the boundaries between enterprises. Cloud computing, mobile and analytics solutions are creating innovative business models and products. From audiobooks to smartphones, to interactive online newspapers new offerings continue to evolve. Yet despite this relentless period of innovation, and subsequent disruption, many segments of these industries face significant challenges, forcing industry players to rethink the way they operate more efficiently. Key challenges now are very different from those a few years ago concerns over the worldwide economy are reduced and with them a fall in those respondents viewing lack of consumer demand as a factor. New pressures surround pricing and competitiveness as companies fight to stay ahead and take full advantage of the upswing. Against this backdrop, and in a bid to drive efficiencies across their department, many Line of Businesses (LOBs), are turning to public cloud services in order to cope with the growing number of disruptions. Findings from a study from EMC, VCE and VMware showed that 90 percent of Line of Business (LOBs) decision makers in the UK industry use some form of public cloud service, driven by ease of use (34 percent of respondents cited this as the number one reason for procuring public cloud services), its affordability (30 percent), and that they felt internal IT teams took too long to provision private cloud services (18 percent). So what should IT departments do to ensure their organisations can benefit from the scalability and efficiency of the public cloud, without risking any associated security or compliance and regulation issues? The answer lies in a hybrid cloud approach, where the affordability, ease-of-use and scale of public cloud can be achieved, without compromising safety and compliance regulations, as businesscritical applications remain in-house. 2
3 CHALLENGING TIMES FOR THE SECTOR 90% of business functions in the industry use some form of public cloud services The industry is evolving at breakneck speed, and customer demands are keeping pace with these sweeping changes. Any business within the Information Technology, Media or Telecoms industry is aware that nothing stands still, and those that do will be left behind. A recent Deloitte report highlighted that the industry will continue to face pressure from increasing competition, further digital disruption and technological change. For many, these challenges won t just come from established competitors. With lower barriers to entry and unburdened by any legacy infrastructure, new competitors that can scale operations and bring products to market faster than ever before will be a persistent challenge. 3
4 CHALLENGING TIMES FOR THE SECTOR Looking at the Media & Entertainment industry more closely, whether it is film or music, content owners are seeing tremendous value in the opportunities cloud technologies bring to them, and rightly so. In a digital world where the end consumer expects low disc space utilisation, back-up in the event of loss and multi device usability/inter-connectedness, copyright owners are harnessing the power of those cloud enthusiasts with substantial device and online store market share. Technology can play a key role in enabling businesses within the sector to compete and survive in this new landscape. Cloud services can enable businesses to run operations in a more agile manner and enable collaboration between departments, providing organisations with the ability to look and act upon new trends and opportunities that emerge at a moments notice. Cloud technologies also mean that infrastructure can be easily scaled up without the need to find more data centre space, helping retailers to meet surges in demand for services or goods. Successful businesses within are also looking to harness customer insights and use social media to identify individual customer preferences and behaviours. While cloud technology offers a way to explore the potential of big data, there remain complications with running commercially sensitive data in a non-secure environment. There s a huge range of ways in which the public cloud can help organisations. Thanks to their intuitive design, widespread availability and low cost barriers, many employees already know how to use these tools and aren t afraid to deploy them where they see the need. While this is an exciting way to empower workers and excel the pace of innovation across all departments, from a security and data management perspective the use of the public cloud within an enterprises can pose several risks. The industry regularly handles commercially sensitive data that has to conform to strict guidelines laid down by regulators. The chief issue is that data is not always secure in the public cloud as it is hosted in third party data centres. While most public cloud service providers will advocate their security controls, businesses are ultimately placing trust in an infrastructure and application they do not control. 4
5 Why this study? In light of these pressures, this study explores the views of over 600 decision makers and heads of departments from within retail organisations, including finance, marketing, HR and customer services, to capture the breadth of uses of the public cloud across the entire organisation. Commissioned by EMC, VCE and VMware, it identifies the motivations and rationale behind different departments within Public Sector organisations procuring public cloud services. The research was conducted by Opinion Matters between March 2015 and April 2015 among 604 decision makers / heads of departments across six industries*. The aim of the study was to compare the influence and impact public cloud purchases has on department efficiency levels. This report aims to help IT departments in the industry find workable cloud solutions, which don t impede innovation but also keep the organisation s data safe namely, through adopting a hybrid cloud approach. 4 Industries surveyed: Telecoms & Media, Financial Services, Retail, Public Sector, Manufacturing and Oil & Gas. 5
6 KEY FINDINGS WHICH EXTERNAL IT RELATED SERVICES DOES YOUR DEPARNT USE? Public cloud deployment is widespread in : 90% of Line of Business (LOBs) decision makers in the industry use some form of public cloud services. Google App Engine 33% Amazon Web Services 22% Microsoft Azure 18% Local UK external IT service 29% WHAT DOES YOUR DEPARNT USE THESE EXTERNAL SERVICES FOR? Ease of use / easily set up Cheaper solution 30% 34% Ease of use is the main reason for public cloud deployment, but concerns with IT department remain Internal IT takes too long to provision private services 18% Ease of use (34%), affordability (30%), and that IT teams took too long to provision private cloud services (18%) were the top three reasons cited by respondents as to why they procured public cloud services
7 KEY FINDINGS WHAT ARE THE MAIN REASONS FOR CHOOSING TO BUY-IN EXTERNAL CLOUD SERVICES WITHIN YOUR DEPARNT? Majority of deployment are done to drive collaboration and efficiencies Almost half (43%) of public cloud deployments within the industry are used as a platform to host internal digital applications and services, followed by using it for testing and development (37%), and website hosting (31%) Platform to host digital applications and services (internal) For testing and development of digital applications and services (internal) Website hosting 43% 37% 31% WHICH OF THE FOLLOWING STATEMENTS BEST DESCRIBES YOUR / YOUR DEPARNT S INTERACTION WITH IT WHEN IT COMES TO PURCHASING ANY EXTERNAL / PUBLIC CLOUD SERVICES: We run everything by them, including the final decision-making process 45% businesses work closely with the IT department We consult with them, but leave them out of the final decision-making process 34% Almost half (45%), run all purchasing decisions past the IT team, while 34% consult with them, but admit to leaving them out of the final decision making process. 10% We don t consult with them but we do let them know once the final decision has been made
8 KEY FINDINGS HOW MUCH OF YOUR ANNUAL BUDGET DO YOU EXPECT TO SPEND ON IT RELATED SERVICES OVER THE COMING TWELVE MONTHS? 100, ,999 1,000-99, , ,999 13% 11% 11% DO YOU EXPECT THE AMOUNT SPENT ON IT RELATED SERVICES OVER THE COMING TWELVE MONTHS TO INCREASE WHEN COMPARED TO THE PREVIOUS TWELVE MONTHS? 17% 17% 15% LOB expenditure on public cloud is set to rocket YES 10-19% YES 20-29% NO stay the same Business functions expect to spend an average of in excess of 1,000,000 ( 1.31m) over the next 12 months on public cloud services. This is set to increase by 30% next year. IT must be an enabler of innovation: The IT department should align itself with the business priorities of the entire organisation and find ways to help it meet the challenges of driving data use in a digital era in a safe, secure and scalable manner. 8
9 1 A 2 3 WHY LOOK TO A HYBRID CLOUD APPROACH? hybrid cloud approach offers the best of both worlds to organisations, by providing the flexibility, affordability, agility and scale of the public cloud, without compromising safety and compliance regulations. It ensures that business-critical applications remain in-house, while instantly provisioning the infrastructure from public cloud to cope with new projects and set up virtual servers to handle a new system. It can be scaled back just as easily when needed, a distinct advantage given the difficultly or sometimes impossibility of taking workloads back out of the public cloud. A true hybrid cloud allows organisations to use a common platform for seamlessly extending their existing data center to the cloud while leveraging the tools, existing security policies and processes that they already use on-premise. HOW TO GET STARTED WITH A HYBRID CLOUD DEPLOYMENT: Get used to the idea of not building all the IT services internally The IT team should instead be focused on managing the consumption of services from multiple service providers, including their own internal functions. Think about possible future data sets For instance, the Internet of Things could bring new potential data streams to the organisation so it is important to consider how this could one day be integrated into your hybrid cloud environment. Design every integration with security at front of mind Ensure you are able to manage the identities of the users you want to have access. Simplicity should be front of mind So the whole process can be easily repeatable. Engaging a specialist service integrator to ensure this simplicity as a blueprint may be the best approach. Select an integrator with a proven track record Of the specific integration your business is looking for and make your assessment outcomes-based, (rather than time and materials). Look at development and testing as a starting point A hybrid cloud makes it possible to quickly develop and test applications in the cloud and easily move them to onsite production if required. It s an easy, fast, and cost-effective way to gain on-demand capacity for a limited time period. Ensure disaster recovery is built in Many departments do not have the budget, expertise or time to develop a disaster recovery plan. Disaster recovery in the cloud is emerging as a compelling alternative due to the flexibility in commitment, capacity and cost. 9
10 With secure, flexible and manageable access to public cloud data through a hybrid cloud approach, the entire organisation can focus on surviving and thriving within the exciting, fast-paced era of digital enterprise. Click here to find out more About EMC EMC Corporation is a global leader in enabling businesses and service providers to transform their operations and deliver IT as a service. Fundamental to this transformation is cloud computing. Through innovative products and services, EMC accelerates the journey to cloud computing, helping IT departments to store, manage, protect and analyze their most valuable asset information in a more agile, trusted and cost-efficient way. Additional information about EMC can be found at About VMware VMware is a global leader in cloud infrastructure and business mobility. Built on VMware s industry-leading virtualization technology, our solutions deliver a brave new model of IT that is fluid, instant and more secure. Customers can innovate faster by rapidly developing, automatically delivering and more safely consuming any application. With 2014 revenues of $6 billion, VMware has more than 500,000 customers and 75,000 partners. The company is headquartered in Silicon Valley with offices throughout the world and can be found online at About VCE VCE provides converged solutions that accelerate the adoption of cloud-based computing models for enterprises and service providers globally. Based on VCE s industry-leading converged infrastructure, VCE converged solutions dramatically simplify IT, enabling customers to focus on business innovation instead of integrating, validating and managing IT infrastructure. About Opinion Matters Opinion Matters is an award winning insight agency, providing consultancy and market research solutions for businesses, organisations and agencies in the UK and overseas. Founded in 2000 as a communications driven research specialist, our expertise is now also key to providing foundations for creating business strategies, gaining insight on perceptions, collecting audience intelligence, providing product development insight, or establishing reaction and need created by compliance and legislation. 10
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