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Enterprises Embracing Cloud Computing For Reasons Beyond Cost Efficiency

By Paul Liu
Monday, January 26th, 2015

Cloud Computing is rapidly transforming the business landscape all over the world. While the general perception is that organizations are migrating to the cloud only to take advantage of the cost benefits that the technology offers, the reality is significantly different. As per a recent study conducted by KPMG, businesses are joining the cloud computing revolution for a number of reasons beyond cost efficiency. The study targeted dozens of organizations from several different industries and its results were published in the annual edition of KPMG’s “Elevating Business in the Cloud” report.

According to the report, cost efficiency continues to be the top reason why businesses are migrating to the cloud. Among the participants, as many as 49 percent admitted that embracing the cloud has improved cost efficiencies of the organization. However, in a significant departure from the past, 42 percent of the respondents are also using the cloud to enable a mobile and flexible workforce, 37 percent to improve interaction and alignment with the customers and business partners, 35 percent are leveraging cloud data to make better business decisions, 32 percent are using the technology for innovation and development of new products, 30 percent to develop new business models while 28 percent are embracing the technology to shift to a global shared services model as well as reduce the time taken to reach the markets.

The report also sheds a light on the benefits experienced by the businesses by moving to the cloud. As per the statistics made available by KPMG, 73 percent organizations are witnessing better business performance by embracing the cloud technology, 72 percent have seen improved levels of service automation, 68 percent are able to integrate systems in a better way and introduce new features and functions, 67 percent are now able to deploy new solutions faster and enhance the interaction with the constituents while 66 percent of the participants were able to replace legacy systems through the cloud technology.

The report also shows how workforce mobility in conjunction with cloud computing is transforming businesses around the world. As per the report, 54 percent businesses have witnessed improved employee productivity as a result of embracing the cloud, 48 percent saw higher employee satisfaction, 45 percent were able to improve field service operations, 44 percent were able to gain a competitive advantage, 43 percent experienced better sales and revenues, 38 percent were able to improve or maintain their competitive advantage and 37 percent organizations witnessed a significant decrease in IT costs.

In the report, KPMG also lists down the key challenges experienced by businesses while migrating to the cloud. According to the report, 53 percent of the participants cited data loss and privacy risks as their top concern, 50 percent were worried about intellectual property theft, 49 percent were concerned about the impact of the move on their current systems, 48 percent were worried about high cost of implementation while 46 percent expressed concerns regarding legal and regulatory compliance, integration with existing architecture and lack of clarity regarding the total cost of ownership. Nevertheless, the report remains optimistic about the growth of the cloud technology and predicts that it will achieve a revenue of $133 billion by 2020, a significant improvement from 2013’s revenue of $58 billion.