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2 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
Contents
01 Cloud maturity 4
02 Drivers and challenges 6
03 Current usage 10
04 Future plans 16
05 About the survey 22
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 3
Introduction
Cloud adoption in Norway is increasing; but a lack of cloud expertise and the complexity in migrating legacy applications are still holding the adoption back.
Reduced time-to-market with new digital solutions is driving cloud adoptionThe most important business driver for cloud adoption is reduced time-to-market with new digital solutions. Cost savings are less important among the respondents this year; hence being able to release new digital services faster with the support of a scalable cloud platform seems to be more important than costs.
The lack of cloud expertise and the complexity in migrating legacy applications are holding cloud adoption back The percentage of respondents that considers the lack of cloud expertise as a challenge related to using cloud services has increased significantly since last year’s survey. The complexity in migrating legacy applications is still a barrier for large-scale adoption of cloud services. This indicates that Norway is still immature when it comes to cloud computing and that more experienced people within the domain are required to handle the current cloud transformation.
DevOps and serverless are mainstreamThe number of respondents that are applying DevOps methods has increased significantly this year. About 39% of the respondents are using serverless PaaS cloud services. These findings indicate that these methods and services are now mainstream in the Norwegian market.
Multi-cloud is the new blackAbout 74% of the respondents are using two or more IaaS or PaaS providers — indicating that a multi-cloud strategy is popular among the largest organizations in Norway.
Compared to 2018, there is an increasing focus on executing on cloud initiatives rather than developing cloud strategiesAbout 32% of the respondents have even planned to start the migration of all their datacenters to Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) in 2019, showing that many large Norwegian organizations have decided to embrace the cloud fully.
4 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
01 Cloud maturity
01 Cloud maturity
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 5
01 Cloud maturity
Cloud maturity of organizations operating in Norway, the Nordics, and Europe or globally are at a similar level
Average cloud maturity of the respondents is between two and three.
Organizations with a Norwegian footprint have lower average cloud maturity than the ones with a Nordic and European or global footprints. This can be attributed partly to the relatively low maturity of the government and public sector respondents.
Average cloud maturity based on geographical footprintAverage cloud maturity level of respondents on a scale of one to five, where five is the highest
The power and utilities sector has the highest cloud maturity, followed by transportation and logistics, and construction.
The government and public sector has the lowest score of 2.1 on the maturity scale. The financial services and insurance, and consumer products and retail sectors have low maturity as well.
Average cloud maturity based on sectorAverage cloud maturity level of respondents on a scale of one to five, where five is the highest
2.3 2.4 2.4
Norway Nordic Europe/Global
2.1
2.2
2.2
2.3
2.3
2.7
2.7
2.8
3.1
Government and public sector
Financial services and insurance
Consumer products and retail
Oil and gas
Industrial products
Health and life sciences
Construction
Transportation and logistics
Power and utilities
6 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
02 Drivers and challenges
02 Drivers and challenges
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 7
02 Drivers and challenges
Reduced time-to-market with new digital solutions is driving cloud adoption; but the lack of cloud expertise is holding companies back
There are many business drivers for moving to the cloud. Reduced time-to-market with new digital solutions is the most important driver this year, followed by digital transformation and business innovation.
However, there is less interest in moving to the cloud to drive revenue growth, just like in last year. Reducing costs is also a less important driver in this year’s survey.
Key business drivers for moving to the cloudPercentage of respondents reporting the driver
Just like in 2017, greater scalability is the most commonly mentioned benefit of using cloud services. Shorter time-to-market is reported as a significant benefit. As these two successfully improved IT operational efficiency last year, it seems that flexibility and scalability are still viewed as more important than cost reduction and efficiency improvements.
Larger geographic reach is reported as a more significant benefit than last year. This indicates that cloud services are more commonly used to expand the geographical reach of Norwegian organizations.
Benefits of using cloud servicesPercentage of respondents reporting the benefit
2019
201819%
49%
68%
59%
57%
70%
59%
3%
17%
31%
55%
62%
66%
66%
69%
Other
Drive revenue growth
Develop new products and services
Reduce costs
Improve business scalability
Drive business innovation
Drive digital transformation
Reduce time-to-market with newdigital solutions
2019
2018
38%
5%
22%
35%
51%
43%
30%
54%
32%
46%
35%
65%
73%
0%
3%
17%
24%
31%
34%
41%
41%
45%
48%
48%
52%
52%
55%
59%
72%
Do not use cloud
Other
Business continuity
Larger geographic reach
Higher performance
Improved customer experience
Move from CapEx to OpEx
Cost savings
Reduced IT operational risk
Increased developer productivity
Improved IT operational efficiency
Improved IT security
Shorter IT infrastructure deployment time
Higher availability
Shorter time-to-market with new digital solutions
Greater scalability
8 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
02 Drivers and challenges
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 9
02 Drivers and challenges
Lack of cloud expertise and complexity in migrating legacy applications are reported as the most significant challenges related to using cloud services. Concerns related to security and compliance or regulations are also reported as challenges.
Data residency is an important subject that has been highly discussed lately. Norwegian organizations perceive that storing of data outside Norway is a challenge related to using cloud services.
Challenges related to using cloud servicesPercentage of respondents reporting the challenge
2019
2018
5%
11%
36%
30%
35%
46%
51%
57%
70%
43%
3%
7%
10%
14%
28%
45%
45%
48%
52%
52%
52%
59%
62%
Do not use cloud
Other
Performance
Move from CapEx to OpEx
Complexity of managing multiple cloud services
Current identity management solutions and processes
Complexity of managing cloud costs
Storing data outside of Norway
Compliance and/or regulations
Security concerns
Vendor lock-in
Complexity in migrating legacy applications
Lack of cloud expertise
10 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
03 Current usage
03 Current usage
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 11
03 Current usage
The current usage of cloud-based services is still low but increasing with Microsoft as the dominant service provider
Norwegian organizations have a relatively low cloud adoption as 73% of the respondents use cloud services for only 1%–19% of their applications.
Share of cloud-based IT applications Percentage of responses within each range
Respondents with a Nordic footprint have a higher share of cloud-based IT applications than those with a Norwegian or European or global footprint.
The organizations with a Norwegian footprint have the lowest share of IT applications in the cloud. The considerable number of government and public sector respondents with a purely Norwegian footprint might contribute to that.
Share of cloud-based IT applications Percentage of respondents with each range split on the respondent’s geographical footprint
0.0%
73.4%
10.0%
10.0%
3.3%
3.3%
Do not use cloud
1%–19%
20%–39%
40%–59%
60%–79%
80%–100%
81%
75%
60%
6%
20%
13%
10% 10%
25%
0% 100%
Norway
Nordics
Europe/global
1%–19% 20%–39% 40%–59% 60%–79% 80%–100%
12 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
03 Current usage
The situation is similar to the 2018 report results with Microsoft Office 365 being the most used cloud-based IT application in the Norwegian market. Microsoft still has an overall strong position with Office 365, Power BI and Dynamics 365. JIRA, GitHub and Confluence are more commonly used than last year, which indicates an increased focus on the use of SaaS-based IT applications for software development and IT operations.
SaaS-based IT applications usedPercentage of respondents using the application
2019
2018
5%
3%
3%
11%
5%
5%
11%
5%
19%
24%
14%
22%
22%
19%
32%
32%
35%
38%
32%
76%
4%
4%
4%
4%
4%
7%
7%
7%
11%
11%
14%
14%
21%
25%
25%
25%
32%
39%
46%
50%
50%
75%
Do not use SaaS
Oracle HCM cloud
Oracle Sales Cloud
SAP Ariba
Zendesk
AppDynamics
Google G Suite
Hubspot
Workday
Box
New Relic
SAP Sucessfactors
Salesforce.com
Visma.net
Dropbox
Other
DocuSign
Adobe Creative Cloud
ServiceNow
Slack
Microsoft Dynamics 365
Confluence
GitHub
JiRA
Microsoft Power BI
Microsoft Office 365
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 13
03 Current usage
About 93% of the respondents have below 40% of their IT infrastructure in the cloud. The share of cloud-based IT infrastructure is significantly lower than the share of cloud-based IT applications, which indicate that Norwegian organizations currently are adopting SaaS based IT applications faster than IaaS/PaaS cloud-based IT infrastructure.
Share of cloud-based IT infrastructure Percentage of responses within each range
The majority of the respondents use two or more IaaS or PaaS providers, and 28% uses three or more providers. The low level of respondents using only one provider indicates the popularity of a multi-cloud strategy in the Norwegian market.
Number of IaaS or PaaS providers usedPercentage of respondents within each category
10.0%
66.7%
16.7%
3.3%
3.3%
Do not use cloud
1%–19%
20%–39%
40%–59%
60%–79%
80%–100%
0.0%
14.3%10.7%
46.4%
21.4%
7.2%
None One Two Three Four or more
14 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
03 Current usage
Microsoft Azure is the most popular IaaS or PaaS provider among the respondents with Amazon Web Services (AWS) not far behind, having increased its popularity by 31% since last year. Google Cloud Platform has made it to the list of top three most popular IaaS or PaaS providers with a relatively higher share than the other providers, which indicates that taking a larger market share than the top three is difficult for the other providers.
IaaS or PaaS providers usedPercentage of respondents using the provider
Apps and databases are reported as the most used cloud workloads. There is a high cost and limited flexibility involved when using databases on premise, which can be a reason for a higher share of the respondents using cloud databases.
Cloud workloads usedPercentage of respondents using the workload
18%
4%
7%
7%
7%
11%
21%
54%
75%
Do not use IaaS/PaaS
Force.com
Alibaba Cloud
Heroku
Oracle Cloud Platform
IBM Bluemix/Cloud
Google Cloud Platform
Amazon Web Services (AWS)
Microsoft Azure
2019
2018
22%
8%
19%
11%
0%
8%
11%
14%
17%
17%
39%
22%
22%
28%
44%
18%
4%
7%
7%
7%
11%
14%
14%
25%
25%
29%
29%
29%
36%
64%
Do not use Iaas/PaaS
Push notifications
Desktop
High performance computing
Other
Internet of Things (IoT)
Container services
Disaster recovery (backup)
Front end solutions
Machine Learning
Data analytics
Integration services
Storage
Databases
Apps
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 15
03 Current usage
There is a high share of respondents that use a large number of unsanctioned as well as sanctioned cloud services. This indicates that the Norwegian market still has a fairly low cloud maturity.
Use of unsanctioned and approved cloud services Percentage of responses within each range
Organizations using only 1–9 approved cloud services have many unsanctioned cloud services. The use of unsanctioned ones are also high in those organizations reporting the use of 10–29 approved cloud services.
Number of unsanctioned cloud services used by the respondents with 1–9 approved cloud servicesPercentage of respondents within range
6.7%
46.7%
36.7%
3.3%
6.6%
6.7%
43.3%
40.0%
10.0%
Do not use cloud
1–9
10–29
30–50
>50
Unsanctioned cloud services*
Approved cloud services
* Cloud services that are not formally approved for use in the organization
7%
57%
29%
7%
Do not use cloud 1–9 10–29 >50
16 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
04 Future plans
04 Future plans
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 17
04 Future plans
Executing on cloud road maps and implementing increased automation and cloud management or monitoring are major priorities in 2019
The responses reflects a high focus on the execution of cloud road maps and increased automation in digital development life cycle. Security concerns, compliance and storing of data outside Norway are reported as challenges in using cloud services.
Compared to 2018, there is an increasing focus on executing on cloud initiatives rather than developing cloud strategies. About 32% of the respondents have planned to start migration of all their datacenters to Iaas or PaaS in 2019, showing that many Norwegian organizations have decided to embrace the cloud fully.
Top cloud initiatives planned for 2019Percentage of respondents reporting the initiative
Organizations with a Nordic footprint have more focus on executing on their cloud road map compared to those with a European or global footprint.
Top two cloud initiatives planned for 2019 based on geographical footprintPercentage of respondents reporting the initiatives split on the respondent’s geographical footprint
2019
201819%
19%
44%
25%
47%
31%
25%
36%
36%
4%
7%
11%
32%
43%
43%
46%
46%
50%
57%
57%
Other
Run a tender process toward IaaS/PaaS technology providers
Run a tender process toward managedcloud IaaS/PaaS service providers
Start the migration of all our datacenters to IaaS/PaaS
Develop a cloud strategy
Migrate legacy systems to the cloud
Build new cloud native digital applications
Implement improved securityin our digital development lifecycle
Implement cloudmanagement/monitoring
Implement increased automationin our digital development lifecycle
Execute on our cloud road map
44%
56%
55%
45%
60%
40%
Execute on our cloud road map
Implement increased automation in our digital development life cycle
Norway Europe/global Nordics
18 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
04 Future plans
Organizations in the Norwegian market are planning to increase the use of cloud-based applications as well as increasingly transitioning the IT infrastructure to the cloud
The share of IT applications that are cloud-based is expected to increase in the coming five years. Within three years, 11% of the respondents estimate to have 80%–100% of their IT applications to be cloud-based.
Share of IT applications estimated to be cloud-based in the following yearsPercentage of responses within each range
Within five years, 25% of the respondents estimate to have over 80% of their IT applications to be cloud-based. Compared with the last year’s findings, this is a substantial increase of 47%.
Share of IT applications estimated to be cloud-based in five yearsPercentage of responses within each range
1%–19% 20%–39% 40%–59% 60%–79% 100%
57%
7%
7%
25%
50%
14%
7%
21%
36%
7%
11%
18%
4%
7%
18%
4%
7%
0% 100%
1 year
3 years
5 years
80%–99%
21.4%
53.6%
25.0%20.0%
63.0%
17.0%
0%–39% 40%–79% 80%–100%
2019
2018
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 19
04 Future plans
About 79% of the respondents estimate having less than 40% of their IT infrastructure in the cloud in 2019. However, 71% estimate having more than 40% of their IT infrastructure to be cloud-based in five years.
Share of IT infrastructure estimated to be cloud-based in the following yearsPercentage of responses within each range
Within five years, 29% of the respondents estimate to have more than 80% of their IT infrastructure in the cloud. Compared with the last year survey, this is an increase of 50%.
Share of IT infrastructure estimated to be cloud-based in five yearsPercentage of responses within each range
1%–19% 20%–39% 40%–59% 60%–79% 100%
0% 100%
1 year
3 years
5 years
80%–99%
7%
4%
4%
50%
11%
4%
21%
39%
21%
7%
14%
18%
4%
18%
25%
4%
14%
7%
14%
14%
0%
2019
2018
28.6%
42.8%
28.6%33.3%
47.2%
19.5%
0%–39% 40%–79% 80%–100%
20 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
04 Future plans
The IT department is taking a larger responsibility for cloud-based technology
Defining cloud security policy and deciding or advising on which applications to implement in the cloud are reported as two most important roles of the IT department with regard to cloud. In addition, managing cloud contracts and deciding on policies for cloud use are also of high priority. This is supported by the findings on the challenges related to cloud services with respect to security concerns and compliance.
The role of IT department with regard to cloudPercentage of respondents reporting the role
Almost all respondents report GDPR compliance as the most important IT security requirement they have for cloud providers. Data processing agreements (DPAs) and location of the customer data are also considered as important requirements. This is supported by the findings on the challenges related to cloud services with respect to security concerns and compliance.
Important IT security requirements for the cloud provider Percentage of respondents reporting the requirement
4%
54%
54%
75%
75%
79%
82%
Do not use cloud
Manage all cloud deployments
Manage/optimize costs of cloud
Set policies for cloud use
Manage cloud service contracts
Decide/advise on which applications to implement in the cloud
Define cloud security policy
4%
36%
39%
50%
68%
86%
96%
Other
ISAE3402/SOC 1 Report
SOC 2 Report on GDPR/Privacy or similar
Visibility of all the parties involved in the service delivery
Where your data is located
Data processing agreement (DPA)
GDPR compliance
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 21
04 Future plans
DevOps has become mainstreaim and Serverless PaaS services are widely used
39% of the respondents use serverless PaaS. This indicates that more advanced PaaS services are now mainstream in the Norwegian market.
Usage of serverless PaaSPercentage of respondents using or not using serverless PaaS
A total of 64% of the respondents report of applying DevOps methods, which is a significant increase from last year’s survey.
Application of DevOpsPercentage of respondents applying DevOps
39%
61%
Yes No
2019
2018
64%
36%
47%
53%
Yes
No
22 | EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services
05 About the survey
05 About the survey
EY Norwegian Cloud Maturity Survey 2019 | Current and planned adoption of cloud services | 23
05 About the survey
Geographical footprintPercentage of respondents
SectorPercentage of respondents
54%
14%
32%
Norway Nordic Europe/global
Organizational sizePercentage of respondents
43%
36%
21%
<1,000 1,000–9,999 >10,000
4%
4%
4%
4%
7%
7%
21%
21%
29%
Health and life sciences
Construction
Transportation and logistics
Industrial products
Oil and gas
Power and utilities
Government and public sector
Consumer products and retail
Financial services and insurance
The survey was conducted in November 2018, and distributed to 148 of the largest organizations in Norway, both in the private and public sector.
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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.
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EY contacts
Christian MjaanesPartner Ernst & Young AS | Advisory | Technology Consulting+47 951 50 088 christian.mjaanes@no.ey.com
Sophus SlaattaDirector | Cloud ComputingErnst & Young AS | Advisory | Technology Consulting+47 408 56 699sophus.slaatta@no.ey.com
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