International. Nutanix, Inc., an enterprise cloud computing solutions company, announced the findings of its Enterprise Cloud Index Report, which measures retailers' plans to adopt private, hybrid and public clouds.
The report revealed that enterprise workloads are rapidly moving away from traditional data center infrastructure, falling from 44% today to just 18% over the next two years as cloud use accelerates. The retail industry has the second highest penetration of hybrid cloud deployments at 21%; and 93% of its members identify hybrid cloud as the ideal IT model, surpassing the global average of other industries.
Today's consumer expects to get an imperceptible shopping experience across all channels in stores, online, and through new ways of shopping, such as on mobile devices, in apps, or even on smart TVs. At the same time, retail distributors need to collect, analyze, and keep their data safe. This pressure to stay one step ahead of their customers' expectations is leading retailers to implement innovative IT practices in less time than ever before.
Perhaps not surprisingly, distributors are also adopting public clouds faster than their counterparts in other industries; however, the control of their spending in the public cloud is better than that of their peers in other industries. With the seasonal nature of the retail industry and increases in traffic impacting year-round workload needs, retailers have experience moving workloads to the public cloud as demand requires. Today, there is a 15% use of public cloud in the retail industry compared to a global average of 12%; and this usage is projected to increase to 22% over the next two years, surpassing the industry-wide global average by an even wider margin of 7%. However, the percentage of above-average retail distributors who say hybrid cloud is the ideal IT deployment model (93%) also indicates that the public cloud is not a panacea for the retail industry.
Nutanix commissioned Vanson Bourne to conduct a survey of more than 2,300 IT decision makers, including 329 resellers around the world, about where they use their business applications today, where they plan to use them in the future, what their cloud challenges are, and what priority their cloud initiatives are against other IT projects and priorities. The survey includes companies from multiple industries, sizes and geographic regions in the Americas, Europe, the Middle East, Africa (EMEA) and Asia-Pacific and Japan (APJ).
The optimistic outlook for hybrid cloud adoption globally and in other industries reflects an increasingly automated IT environment that is flexible enough that companies have the option to purchase, build, or lease their IT infrastructure resources based on application requirements. For retailers, having the flexibility to choose the right cloud for each application was most often seen as the benefit of deploying hybrid cloud (at 18%), followed closely by using the cloud "on the spot" to support periods of high traffic loads. Given the seasonal nature of the enterprise and the variance of IT and network consumption needs throughout the year, retailers understand the need to keep their IT area flexible.
Here are other important findings from the report:
Retailers better control cloud spending. One motivation for deploying hybrid clouds is the need for companies to exert more control over their IT spending (where 35% of organizations using the public cloud say they exceeded their budgets for public cloud services). Retail companies, perhaps from their experience, seem to do a better job of managing their public cloud spending. About 69% of retail companies said their public cloud spending was below or within budget, and only 29% reported over budgeting, compared to 35% of global companies in other industries.
IT talent and security are obstacles to hybrid cloud adoption, but cost is also at the top of the list: Globally, more than half of respondents said data security and compliance, performance, management, and total cost of ownership are critical factors when deciding where to place their application workloads. While 88% of respondents globally expect hybrid cloud to have a positive impact on their businesses, hybrid cloud skills ranked second in scarcity for retailers (30%), where the top shortage manifests itself in AI skills and machine-based learning. Retailers placed a strong emphasis on cost, compared to other industries (nearly 20% cite cost as a criterion of utmost importance).
"More than many industries, retailers are acutely aware of how IT strategy and execution have a direct impact on the customer experience and baseline of operations. The high adoption rate and planned growth of hybrid cloud in retail shows that retailers understand that hybrid cloud is the best solution to keep up with customer demands while keeping flexibility, security and costs online," said Chris Kozup, Senior Vice President of Global Marketing at Nutanix. "I expect the retail industry to maintain its leadership in IT innovation as they form new strategies to rejoice their customers in the retail experience."
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