Few organisations utilize cloud services to full effect – public sector sees biggest increase

More and more industries are using cloud services, yet only about one in ten organisations can be considered a mature user. The finance sector tops the list, but the biggest increase in cloud maturity comes from the public sector. This is concluded in this year’s edition of the Cloud Maturity Index survey from Tieto and research company Radar.

Cloud service usage has increased dramatically in the Nordics over the last few years and the trend seems to continue in 2016, according to the Cloud Maturity Index survey, which has been produced by research company Radar on behalf of service and software company Tieto for the second consecutive year. Almost four out of five (77 percent) large Swedish organisations and enterprises utilize cloud services, compared to 60 percent in 2015. On average, Swedish organisations spend 4.9 percent of their IT budgets on cloud services and investments are expected to increase by 22 percent during 2016.

- The strong market growth is in part due to IT providers gradually replacing traditional services with new cloud based solutions. But primarily it’s about customers realizing the value of using cloud services to digitalize their entire business, even the more complex and critical parts, as security continues to improve, says Inger Ekman, Vice President, Technology and Modernization Services at Tieto Sweden .

However, a majority of Swedish organiaations is still at an immature or basic level when it comes to using cloud services. Only 12 percent can be considered mature and 24 percent as knowledgeable, while 49 percent are considered to have basic knowledge and 15 percent are viewed as immature in their usage. The report also shows that cloud mature organisations are showing considerably better performance compared to others, not the least because of clearly reduced IT costs (on average 34 percent lower than others).

- Almost half of all decision makers view cloud services as the best solution to support innovation within the organisation, but many still use the services in an inefficient way. Too many still view cloud services as a short-term solution to cut costs, rather than as an important part of their business strategy. A rethink is required to avoid the risk of falling behind in the transition brought on by digitalization, says Inger Ekman.

Strategies for cloud services on the rise – the public sector is reducing the gap

The study clearly shows that cloud services are high on the organisations´ agenda, and 42 percent state that they currently have a strategy for cloud services, compared to 34 percent in 2015. The difference in maturity between different industries has also decreased during the last year. Both the public sector and manufacturing industry have taken big steps, with the public sector seeing the biggest increase. The finance sector is still the most mature when it comes to using cloud services.

- The big increase for the public sector is due to more suppliers offering cloud services that are customised for the specific needs and demands of the public sector, along with an increased understanding of the benefits of using the services. The manufacturing industry is also improving, but is still lagging somewhat behind overall, says Inger Ekman.

For more information, please contact:

Inger Ekman, Vice President, Technology and Modernization Services at Tieto Sweden ,
phone: +46 70 304 56 35, e-mail: inger.ekman[at]tieto.com

Erik Johannisson, Head of Marketing, Technology and Modernization Services at Tieto Sweden,
+46 730 82 58 13, erik.johannisson[at]tieto.com

Highlights from the Cloud Maturity Index 2016 (the 2015 figures in brackets):

  • Level of usage of cloud services:
    - In mature 15 % (18 %)
    - Basic 49 % (51 %)
    - Knowledgeable 24 % (21 %)
    - Mature 12 % (10 %)
     
  • The main reasons for using cloud services (indexed 1-5)
    The reason ”reduced business risk” increase the most:
    - Improved flexibility 3,8 (3,8)
    - Short start-up time 3,7 (3,3)
    - Easy to buy and implement 3,6 (3,5)
    - Cost efficient 3,4 (3,4)
    - Positive effects on innovation 3,4 (3,2)
    - Improved quality 3,1 (2,8)
    - Reduced business risk 3,0 (2,4)
    - Improved IT security  3,0 (2,5)
     
  • Average cloud maturity per industry:
    - Public sector: Strategic 3,7 / Operational 5,1 (3,0/4,1)
    - Manufacturing: Strategic 3,4 / Operational 5,1 (2,9/4,2)
    - Retail: Strategic 3,8 / Operational 5,4 (3,5/5,2)
    - Consulting: Strategic 3,8 / Operational 5,4 (3,2/4,9)
    - Finance: Strategic 4,7 / Operational 5,9 (4,3/5,8)
    - Total Sweden: Strategic 4,2 / Operational 5,7 (3,7/5,2)
     
  • Number of organizations that use cloud services: 77 % (60 %)
     
  • Cloud services ‘share of total IT budget: 4,9 % (4,1 %)
     
  • Cloud mature organizations use different types of cloud services:
    What clearly distinguishes cloud services mature companies is that they use multiple types of cloud services such as SaaS , PaaS and IaaS . Today, nearly a quarter (23 percent) uses all of the three cloud solutions, compared with 14 percent in 2015. Among cloud mature organizations, the proportion is 70 percent. 
     
  • Priorities for cloud services during 2016
    82 percent believe that the development of internal expertise is a key area of priority, and 74 percent believe that the integration of cloud services with current IT strategy is a priority.

About the study
The study was conducted by Radar on behalf of Tieto during the period April to June 2016. The quantitative study includes 203 organizations with more than 250 employees in Sweden (131) and Norway (72). Of these, 24% come from the public sector and 76 % from the private sector. Download full study on Tieto's website.

About Tieto  
Tieto aims to capture the significant opportunities of the data-driven world and turn them into lifelong value for people, business and society. We aim to be customers’ first choice for business renewal by combining our software and services capabilities with a strong drive for co-innovation and ecosystems. www.tieto.com.

About Us

Tieto is the largest IT services company in the Nordics providing full lifecycle IT services. We also provide global product development services for companies in the communications and embedded technologies arena. Through industry insight, technology vision and innovative thinking, Tieto proactively strives to inspire and engage its customers in finding new ways of accelerating their business.Building on a strong Nordic heritage, Tieto combines global capabilities with local presence. Headquartered in Helsinki, Finland, Tieto has over 13 000 experts in more than 20 countries. Turnover is approximately €1.5 billion. Tieto’s shares are listed on NASDAQ in Helsinki and Stockholm. www.tieto.com

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