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Adoption of Cloud Services in North America

Adoption of Cloud Services in NA - Blog
April 6, 2018 / Evolve IP

This year’s Cloud Adoption Survey examined the following topics and uncovered trends you’ll absolutely want to read:

  • Cloud Beliefs
  • Current and planned deployments
  • Expectations and concerns
  • Cloud access
  • Budgets
  • Vertical breakouts for Healthcare and Finance


About a decade ago, front office executives and managers looked on incredulously as teams started trying out a little-known player known as “The Cloud”. Unwilling to risk their franchise, most kept with their current lineup. However, over the next few years, The Cloud posted some big wins and teams began experimenting. The Cloud was new and exciting and got lots of buzz from the media. The front office loved The Cloud as he didn’t require the same investment as legacy players. Finally, after delivering in the clutch year after year, virtually every organization wanted The Cloud on their team.In Evolve IP’s 2017 survey on cloud adoption, we’ve learned that “The Cloud” has gone from promising rookie to the face of the franchise. In fact, based on the results, he has believers in every part of the organization, he is well liked (even loved), he integrates with virtually everyone, and he is trusted like never before. As you would expect, with this kind of universal appeal, The Cloud is in high demand.Monday morning quarterbacks concur. According to Gartner, “IT spending is steadily shifting from traditional IT offerings to cloud services (cloud shift).” In fact, according to their 2016 news release, the aggregate amount of cloud shift is estimated to increase to $216 billion in 2020. 

Evolve IP’s exclusive research, which trends statistics going back to 2013, looked at the impact of The Cloud with the following areas of concentration:

  • IT and executive beliefs
  • Cloud services adoption trends
  • Cloud implementations
  • Expectations and concerns
  • Accessing the cloud
  • Budgets
  • Industry Segmentation
The survey was exclusively focused on IT professionals and executives involved in approving and/or implementing cloud strategies. 1,527 individuals participated in this seminal web-based survey, making it one of the most thorough examinations completed on this topic.Did you know… This survey is the 4th study on the adoption of cloud services conducted by Evolve IP since 2013? 

Executive Summary

Evolve IP’s 2017 North American Cloud Adoption Survey revealed that The Cloud has gained corporate alignment, increased real business benefits and has near ubiquitous adoption. 

Cloud Beliefs

90.5% Future CloudRespondents almost universally believe that cloud computing is the future model of IT for businesses with 9 out of 10 respondents (90.5%) agreeing.Virtually everyone acknowledges the tectonic shift from premise to cloud and the majority believes that the change is good. 7 in 10 (72.5%) consider themselves cloud believers while 15.5% remain unconvinced.  Just 1 in 10, (12%) feel they don’t have enough information about the cloud to levy an opinion showing that the market generally believes it is well educated about the technology.  

Services in the Cloud

Keeping in li88% plan to move to the cloudne with Gartner’s note on cloud shift, nearly nine in 10 respondents indicated they would be moving new or additional services to the cloud in the next three years. This is a significant increase of 13.5 points (74.5%) in 2017.On average, those surveyed have approximately four services in the cloud. Servers/data centers, Exchange/Office, and Disaster Recovery were cited as the top deployed cloud services. Interestingly, even among those that remain unconvinced about the cloud, 76% have deployed hosted services with an average number of 2 services in the cloud.

Cloud Deployments

Respondents indicated that they were relatively comfortable with their team’s understanding of cloud technologies with 63% noting they felt their staff could implement a cloud services strategy independently. Furthermore, just one in four (22.5%) were concerned about a lack of IT associate knowledge about the cloud.With 6 in 10 confident, they could move to the cloud by themselves, we asked those that had already migrated services how they got there. Over 5 in 10 (53.5%) handled the process internally, which was statistically unchanged from 2016. However, 44% said they would outsource the deployment to a third party if they could start the process over again.
  • For those that used a third party 35.5% used a consultant or VAR, 31% worked directly with a cloud services provider, and 11.5% worked with a data center/infrastructure provider.

Expectations and Barriers

Did You KnowScalability (75%), flexibility (70.5%) and Disaster Avoidance / Business Continuity (70%) were the top three expected benefits of moving to the cloud and the data set shows nominal changes across the board since the survey’s inception in 2013. Additionally, as more organizations have moved to the cloud, and their deployments have become more mature, expectations have stayed aligned with perceived benefits. In fact, of those with services in the cloud today, the top expected benefits are identical to the top experienced benefits.The top barrier in moving to the cloud was security – noted by 50.5% of respondents, which is down slightly from 55% in previous years. Budget concerns increased slightly from 2016 from 30% to 37% and privacy rounded out the top three concerns at 34%. 

Data Safety: Cloud vs. Premise

Safest in the CloudIn our previous surveys, security concerns were considered an issue when moving to the cloud and, as evidenced above, this still remains a hurdle. In this year’s survey, however, it became clear that respondents – including those without services in the cloud actually feel their data is more secure in the cloud than it is on premises.For this dataset, we looked at three scenarios: hardware failure (the most common disaster scenario), malicious attacks, and environmental disasters. In all three categories, the cloud outperformed on-premises solutions in terms of expected security. Not surprisingly, 5 out of 10 respondents are using, or are planning to use, private clouds, while 46% will have hybrid environments. Public cloud experienced a significant lift from 2016 with 39.5% using or planning a deployment. 

Network Access

Network CostDespite a general decline in network costs, 1 in 3 respondents (32%) felt that the cost of access was still a point of pain for their organization. SD-WAN, or software-defined networking, is an emerging tool to bond and manage networks and is a potential solution for these organizations.However, much like where the cloud was years ago, respondents seem to be hesitant to try the service and/or are unaware of the technology.  Approximately 45.5% were not familiar with SD-WAN and just 28% had evaluated it as a potential solution. Overall, just 11.5% of respondents had deployed SD-WAN for their headquarters and 10% had deployed the solution for branch locations.  


As you might predict from the data presented so far, budgets for cloud services are increasing or remaining steady. 46.5% said their budget increased in 2016 and 48% of respondents expect their budget for cloud to increase again in 2017. The increase in budget in 2016 aligns closely with expectations from 2015 where about half expected their budget to increase the following year. Budget concerns were cited as a barrier by approximately 1 in 3 respondents (37%); a 7% uptick from 2016.How IT’s available budget will be applied may be markedly different from years past as businesses shift to an OPEX model. In 2017 we began asking about respondent’s organizations’ preferred buying model and of the 681 that expressed a preference, 53% preferred OPEX to CAPEX. 

Cloud Beliefs: What Do You Believe?

Over the last several years “The Cloud” has grown from a promising rookie to a high performing, dependable pro that is embraced by the entire organization. With the promise of cost savings, disaster avoidance & recovery, and a flexible/scalable computing environment, “The Cloud” has turned into quite the all-star.Based on the survey results, nearly 9 out of 10 respondents (90.5%) agreed that cloud computing is the future model of IT. In terms of believing in the value of the cloud, 72.5% of respondents say they are cloud “believers.” Just 12% of those surveyed still feel they need more information to decide and just 15.5% remain unconvinced about the cloud.

9 out of 10 agreed that cloud computing is the future

BENCHMARK: Executives and IT Professionals that consider themselves Cloud believers
  • 2013: 53%
  • 2014: 58.5%
  • 2015: 67.5%
  • 2016: 72.5%

Services in the Cloud

Deployment in the cloud has sped up significantly, and businesses maintained their numbers in 2016 with those surveyed reporting they had an average of 4 services in the cloud. Adoption was even faster for those who considered themselves “cloud believers” with an average of 4.25 hosted services. Even those that stated they were unconvinced about the cloud were on the cloud track, however. 76% of the unconvinced were using cloud services and averaged two cloud services.Perhaps most interestingly, of those without any cloud services today, 68% expect to migrate some cloud services in the next three years. The services most attractive to this group are data backup, servers/data centers, Microsoft products such as Exchange and Office, and phone systems. 

Deploying Cloud Services

A major change in last year’s study was an over 100% increase (from 24% to 50%) in those indicating that if they could “replay the down” on their last cloud deployment, (meaning do it over), they would use a third party instead of attempting it themselves. This number dropped slightly in 2017 to 44.5% but remains a point of concern for those deploying services independently. Also in line with 2016’s results were the number of cloud deployments that were handled internally; 53.5% kept it in the locker room while 46.5% outsourced to a third party – these numbers were essentially unchanged.Deploying Cloud ServicesDespite the assumed issues indicated by a DIY approach, respondents are still comfortable with their team’s knowledge of the cloud. In fact, only 2 in 10 (22.5%) indicated a “lack of staff knowledge” about the cloud as a concern. Furthermore, when asked if their staff could “implement a cloud strategy independently,” 63% said yes. That number, as expected, dropped to 4 in 10 (43%) when looked at by those who would outsource if they had to start again.

Third Party

 One of the challenges facing IT departments today is choice. Choice in the types of clouds, choice of underlying technology and the choice of providers/hosts. From private to virtual private, and public to hybrid, finding the right solution for services is complex.Accordingly, 56% of those surveyed would prefer to rely on a single cloud provider to handle their various services like servers/data centers, disaster recovery, Exchange, phone systems, call centers, desktops, etc. When we looked at the data by company size, we found that even half of the enterprise respondents (48.5%) preferred a single vendor option.One interesting takeaway from the data appeared when we compared C-suite executives to IT managers and Directors in this category. While 51.5% of the IT pros preferred this methodology, fully 67% of executives would prefer working with a single CSP.

Single Provider


Expectations for Cloud Benefits

The cloud adoption survey has been running since 2013, and while adoption, budget, and belief in the cloud have changed over the years, the expectations for the cloud are virtually unchanged. In fact, both in terms of percentages as well as a stack rank, the data is remarkably consistent.This year, the top three expected benefits are:
  • Greater Scalability
  • Flexibility
  • Disaster Avoidance / Business Continuity

Evolve IP – Our Take on TCO

Total Cost of Ownership, in theory, should be an easily identifiable benefit to cite after deploying cloud services. However, the shift from a CAPEX to an OPEX model makes quantifying actual TCO extremely difficult for organizations that don’t have a sophisticated method for identifying, measuring and comparing all of the cost centers in a premise-based solution vs. cloud services.At Evolve IP we have grouped these into 7 “vaults” and put together a process that helps organizations better predict and account for their true costs. The vaults are:
  • Physical data center/hardware
  • Software & licensing
  • Power and environmental
  • Hardware maintenance and software assurance
  • Support personnel and training
  • Disaster recovery and business continuity
  • Intangibles

We have created a comprehensive TCO calculator and guide that covers these seven vaults to assist organizations in evaluating whether a move to the Cloud is right for their business.

Data Security and Other Concerns

As in our previous surveys, about 5 in 10 respondents have noted security as a concern in moving to the cloud.  This has been remarkably consistent since the survey’s outset, but as has been demonstrated by rapid cloud adoption, it hasn’t been viewed as a stop sign.

50.5% noted security as a concern


Where Is Your Data Safe From Malicious Attacks?

This year, with 50.5% noting the concern, security as a barrier is at its lowest levels since the survey’s inception. We also broke down security in more detail and uncovered some interesting information.
  • When looking at a malicious attack, 51% of respondents felt that their data would be best protected in a private cloud as compared to an on-premises data center (34.5%) or public cloud (14.5%).
  • During a hardware malfunction, 49% preferred a private cloud compared to 33% for public cloud and 18% for on premises
  • For environmental disaster, 49.5% indicated a preference for private cloud compared to 40.5% for public cloud and 10% for on-premises.
This clearly demonstrates that security is a general vs. cloud concern and that the point of storage has become less of an issue for most IT professionals and executives.


Accessing Cloud Services

Prior to 1954, the sport of basketball didn’t use a shot clock. As a result, teams could deliberately slow down the game resulting in horrific scores in the teens and twenties. Similarly, nothing puts a drag on business more than a slowdown. For today’s organizations that slowdown is most noticeable in network access and the ability to get to cloud services.An emerging technology called SD-WAN or “Software Defined Networking in a Wide Area Net-work” is helping to increase network speeds while decreasing costs. Typically the technology is a bonding solution that supports multiple connection types, enables dynamic paths and has a configurable management portal.However, much like where The Cloud was years ago, respondents seem to be hesitant to try the service and/or are unaware of the technology.
  • 10% had deployed the solution for branch locations
  • 11.5% had deployed SD—WAN for their headquarters
  • 28% had evaluated SD—WAN as a potential solution percent were not familiar with SD-WAN
Interestingly, 1 in 3 respondents (32%) felt that network access costs were a point of pain for their organization and in many cases SD-WAN can deliver significant costs savings to the business. We expect to see a significant uptick in both awareness and adoption of SD-WAN in the coming years and will continue to track its deployment. 


This year 37% of respondents feel that a lack of budget is a barrier to continue their move to the cloud, a 7 point increase over 2016, and just 6% expect to see a decrease in their cloud budget. 46.5% have reported that their budget increased in 2016 and 48% expect their budget to increase in 2017.2016:
  • 5% had an increase in their cloud budget
  • 48% expect an increase in 2017
  • 5% had an increase in their cloud budget
  • 50% expect an increase in 2016
  • 42% had an increase in their cloud budget
  • 54% expected an increase in 2015
  • 43% had an increase in their cloud budget
  • 5% expected an increase in 2014
46.5% had a budget increase for cloud services in 2016 

Healthcare Vertical

Our study of 183 respondents revealed that the healthcare industry has been slower to adopt the cloud than other verticals and with severe HIPAA repercussions they are very carefully evaluating their options. The survey found that on average, organizations have between 2 and 3 services in the cloud – this is lower than the general average of 4 services.However, future adoption is expected to be strong with 83% of respondents planning to add new or additional cloud services in the next three years. The top services survey respondents expect to deploy in the cloud include data backup and servers/data centers (47.5% & 45.5%) Other SaaS (27.5%) and phone systems (26%).Additionally, healthcare IT is actually more comfortable with private cloud services for data safety compared to the general IT population.
  • For environmental disasters – 61 percent, (a 10.5 point increase over the general IT population), felt their information was safest in a private cloud.
  • For malicious attacks, 58 percent, (a 7 point uptick) preferred a private cloud to safeguard their data.
  • For hardware malfunctions, 58.5 percent, (a 9.5-point increase) preferred private clouds.
Additional Findings - Healthcare 

Financial Vertical

Interestingly, the financial industry (credit unions/banks etc.), another vertical with major compliance needs, also felt strongly about the ability of private clouds to protect data better than public clouds or on-premises options.
  • For hardware malfunctions, the most common scenario for disaster recovery, 52 percent felt their information was safest in a private cloud compared to 33 percent in a public cloud and 15 percent on premises.
  • For malicious attacks, 54.5 percent preferred a private cloud to safeguard their data versus 34 percent on premises and 11.5 percent in a public cloud.
  • For environmental disasters – 50 percent felt their information was safest in a private cloud compared to 43.75 percent in a public cloud and 6.25 percent on premises.
Other key results of the survey showed that, on average, financial organizations have around three services in the cloud. Servers/data centers, Microsoft Exchange and Office, and other SaaS offerings were cited as the top deployed cloud services. Additionally, the survey indicated that adoption will continue to be strong, with 87.5 percent of respondents planning on adding new or additional cloud services in the next three years.The survey results also found that 53.5 percent of organizations had deployed a cloud solution on their own versus using a third-party provider. However, when asked if they had to start the deployment over, nearly half (45.5 percent) said they would outsource to a solution provider the next time.Additional Findings:
  • The overwhelming majority of respondents indicated PCI and FFIEC compliance requirements (54 percent and 43 percent respectively)
  • Budget increases for 2017 were expected by 57.5 percent of respondents with just 4 percent planning a decrease.
  • The top services survey respondents expect to deploy in the cloud over the next three years include: data backup and servers (52 percent) Office / Exchange (43.5 percent / 42 percent) phone systems (31 percent)

About The Survey

This blind, web-based survey was conducted by Evolve IP during January of 2017, featuring 1,527 respondents in North America.76.25 percent of the respondents came from companies with between 50 and 5,000 employees, 10.25% were businesses with 11-49 associates, 9.5% were enterprise with 5,000+ associates and 4% were small businesses with 10 employees or less. 84.5% of respondents work in for-profit industries, 12.75% came from education and 2.75% were Government employees.Vital Stats:
  • 47.5% IT Managers or Directors
  • 18.5% CTOs, CIOs or IT Vice Presidents
  • 16.5% CEOs, CFOs or COO Executives
  • 12%    Operations or Finance Directors
  • 5.5% VPs of Finance or Operations
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