Press release

22 Feb 2022

Transformation and growth are the top drivers of cloud adoption, says EY-NASSCOM survey

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EY India

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Related topics Technology Growth
  • Four in every five enterprises are set to increase their cloud budgets over the next 12 months
  • Driven by the pandemic, one in two companies has accelerated its cloud journey
  • 92% of small enterprises and 80% of medium enterprises are faced with gaps in how they manage security related risks
  • ITes organizations lead cloud adoption followed by healthcare and BFSI sectors 

Bengaluru, 22 February 2022:  Although cloud adoption has been on the rise, the last couple of years have demonstrated the need and importance of cloud as a critical ingredient of future business growth. This year’s EY-NASSCOM cloud survey depicts how cloud has emerged as the primary driver of business growth amidst uncertainty given that, four in every five enterprises are bullish about their cloud budgets next year. The EY survey conducted in collaboration with NASSCOM deconstructs the key factors driving cloud adoption among Indian enterprises based on the responses from 504 C-suite executives. In addition to remote working, the other top reasons for increased cloud adoption are changes in product/service delivery, new channels for connecting/reaching customers, changes in organizational processes and maintaining a competitive edge.

Although the COVID-19 pandemic altered many paradigms of conducting business in new ways, majority of the respondents ranked business growth and transformation as the top drivers for cloud adoption. Cloud also played an integral role in helping enterprises to sustain despite lockdown scenarios and IT infrastructure inconsistencies, enabling them to innovate faster thereby enhancing speed to market, agility, and responsiveness. As per the survey, while 67% of the large enterprises accelerated cloud adoption, 39% of medium-sized companies and 38% of small companies embarked on their cloud journey. However, 92% of small enterprises and 80% of medium enterprises faced gaps in how they manage security related risks. To address the acute shortage of digital talent, organizations focused on new talent acquisition efforts (73%) as well as embarked on automation initiatives (66%) to augment the skill gap.

The survey also throws light on the core benefits of cloud adoption like the amount of flexibility it offers when it comes to different aspects of cost, allowing organizations to explore multiple strategic options. The different cloud models and cloud service options are not only offering organizations with alternatives to implement cloud in different ways but also enabling them to plan their technology budgets.

Nitin Bhatt, Technology Sector Leader, EY India saidBoards and CEOs are increasingly viewing cloud as a strategic imperative for growth and business transformation. They have realized that simply lifting and shifting workloads for cost reduction and resilience will not automatically transform their businesses and are therefore adopting cloud for benefits such as flexibility, agility, and innovation. They value being able to leverage data and AI on the cloud, enable richer insights and real-time decisions that improve performance and facilitate market differentiation in a secure and trusted environment. To realize transformational value from cloud investments, CEOs must ensure that their cloud strategy is embedded in their larger business strategy.”

Sangeeta Gupta, Senior Vice President and Chief Strategy Officer, NASSCOM said “With rapid digital acceleration and everything becoming on-demand and need-based, migration to cloud-based services is providing a significant competitive advantage for enterprises in the new normal. With increasing investments in building cloud infrastructure across industries, demand for a digitally skilled ecosystem has emerged as top CEO priority. India today has the potential to become the leading hub for cloud based talent globally. For this, we would need to balance the right cloud skillsets coupled with collaborative ecosystem enablement to encourage industry-wide reskilling across the country.”

Nitin Sawant, Leader, Cloud and Enterprise Architecture, EY India saidCloud adoption in India would benefit from closer collaboration between hyperscalers and user organizations. By co-developing the cloud journey and migration roadmap there would be better clarity around issues related to costs and value of cloud adoption. Since talent shortage is a critical roadblock to scaling cloud, companies need to double down on their automation and reskilling efforts to accelerate their cloud journeys. Lastly, better management of cloud related business risks, especially those in the areas of security, privacy and compliance can go a long way in building trust between cloud ecosystem partners.”

As enterprises continue to explore various cloud models, here are some of the key survey findings:

  • While private cloud is the most preferred option, there is an increased openness to adopt hybrid and public cloud models with 68% of the small enterprises preferring public cloud owing to its cost advantages
  • Owing to the pandemic and rising dependencies on remote working, healthcare, and digital payments, 78% ITes companies and 53% healthcare and BFSI companies reported a steep spike in cloud adoption
  • 84% of large enterprises report adopting Software-as-a-service (SAAS)
From this year’s survey results, we may conclude that Indian organizations are truly on a path to transitioning to the cloud. The results and interviews reveal that cloud will continue to be leveraged as a potent enabler for digital transformation. Consequently, we will continue to see an evolution of more mature cloud applications and cloud models to adapt to new paradigms of business strategy, including cost, customer outreach, employee engagement and new business models.

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