Thank you for Subscribing to Apac CIO Outlook Weekly Brief
The State of Cloud Adoption in Asia Pacific
By Naveen Chhabra, Senior Analyst Serving Infrastructure & Operations Professionals, Forrester
To thrive in the age of the customer, organizations will have to internalize the concept of customer obsession, accept the fact that digital innovations have disrupted their business models and created customers that are digitally savvy and entitled. CIOs today must partner with customer-facing business leaders to deliver business technology that enables their organizations to deliver a differentiated customer experience, and many are adopting public cloud services to achieve their objective.
While business teams initially drove the adoption of public cloud services due to its attractive cost model, speed of implementation, and ease of use, CIOs are now embracing public cloud services to enable digital transformation within their firms.Public cloud services continue to gain tremendous momentum in Asia Pacific (AP) markets as organizations seek to advance along their digital journey.In my recent report ‘Sizing The Public Cloud Services Market In Asia Pacific’, I projected that the public cloud services market in Asia Pacific will grow from $7 billion in 2015 to $23.8 billion in 2020.
Cloud Enables Modern Digital Ecosystems Built for the Future
We are seeing a shift in the way organizations think about and use cloud. Many are moving from using cloud for tactical point solutions or cost savings to using cloud to drive business results and innovation. While it drives speed, cloud can deliver innovative business services which would not typically see the light of the day using internally sourced technology. A cloud ecosystem may also integrate with a traditional ecosystem to offer decidedly different characteristics, including a multitenant architecture, self-service on-boarding, and real-time integration, and is overall an easy and cost-effective way to connect with partners, customers and devices.
"Public cloud services continue to gain tremendous momentum in Asia Pacific (AP) markets as organizations seek to advance along their digital journey"
With the rapid adoption of cloud services in Asia Pacific, it does not surprise me when I see it is touching the lives of the rural population as well in the region. For example, it has simplified and sped up the business process of a dairy farm group in rural parts of India. Traditionally, the milk co-operative sand individual milkmen supplying milk will engage in quite a manual way. Come today, using a combination of ubiquitous network services, sensors (which monitor milk quality at the milk collection center and push every qualitative &quantitative parameter to cloud hosted application services),integration with banking services that simplify the payment process, what used to take days or weeks in its offline mode can now happen quite instantaneously. Such examples of increased efficiencies are helping drive cloud adoption in the region by small and medium-sized businesses, alongside adoption by large enterprises that have started several years ago.
An Expanding Portfolio of Application Services Drives Adoption
Application services, or SaaS solutions, will remain the largest category in the Asia Pacific public cloud market, and is expected to grow from $5.6 billion in 2015 to $15.6 billion in 2020, at a CAGR of 23%.This will remain the largest portion of the overall market, accounting for more than 80% of public cloud revenues in 2015 and about 65% in 2020.
The demand for public cloud application services is expected to continue growing as enterprises apply them to new types of applications, which now include business applications like big data analytics, business intelligence, compliance and risk management, enterprise asset management, and finance, and is also replacing existing licensed software. Forrester also expects the adoption of application services to finally start gaining traction in categories like g ERP and supply chain management for which such services have existed for a decade. In a Forrester survey, 69% of software decision-makers whose firms use or plan to use SaaS said that gaining access to a wide ecosystem of solutions via public cloud application services was important or very important in their firms' decision.
CIOs Must Prepare Hybrid Cloud Management
As businesses host new customer-facing applications in the public cloud, these apps integrate with on-premises systems of record — the systems that store the data and execute the transactions. Firms use cloud services from multiple service providers and each of these service provider services are governed and managed differently. CIOs live in a hybrid world and must ensure that their tech management team has the skills to implement a hybrid cloud management capability.
CIOs, while they understand the hybrid cloud they are in, are not investing enough in its comprehensive management, although there are a host of software and services-based offerings.