Organisational-led initiatives, user experience and security have become the top three drivers for enterprises across ASEAN when buying cloud services, according to a new study of companies in the region.
The emergence of these drivers sees the traditional priorities of cost and scalability which, while still important, now play second fiddle to the new top three, according to industry analyst firm GlobalData.
GlobalData’s recent report, 2021 ASEAN Cloud Buying Trends: Cost and Scalability are No Longer the Top Criteria – the result of a study examining 158 decision-makers across ASEAN – suggests that accelerated cloud adoption over the past 18 months across the region is changing enterprises’ buying behaviour and solution criteria when considering new cloud services.
“As ASEAN enterprises advance in their cloud journey, they are seeing the technology more as solution to address their business challenges rather than an IT product,” said Alfie Amir, principal analyst at GlobalData. “The traditional cloud benefits such as cost and scalability are still important, but there are other more crucial drivers that map the technology more closely to business priorities.”
According to the analyst firm, ASEAN was considered a relative cloud laggard up until quite recently, but the pandemic has driven enterprises in the region to rapidly migrate more workloads to the cloud over the past 18 months.
Indeed, 2020 saw many ad-hoc deployments to address the urgent need during lockdowns, such as remote working, according to GlobalData.
This year, the firm said, ASEAN enterprises have become more mature with cloud and are looking for more complex deployments to align the technology with business outcomes.
As a result, organisational-led initiatives are now the top driver for ASEAN enterprises as they turn to cloud as a key enabler for various initiatives across different business units.
It is thought that this trend also shows that enterprises are moving from fragmented cloud implementations to more streamlined deployments across organisations.
Perhaps the biggest change in ASEAN enterprise cloud buying behaviour, according to GlobalData, is security, which has shifted from being the top barrier to the third most important driver.
This has been driven by the increase in threats, especially in the last 18 months, as well as the advancements in cloud security technologies offered by service providers, such as cloud access security broker and security at the edge, GlobalData said.
As a result, enterprises are considering cloud as an alternative to existing infrastructure, but also to enhance the overall protection of corporate data.
Meanwhile, improvements in user experience have always been a key driver but have now become more important for enterprises when considering cloud.
In the current business landscape, user experience largely relates to remote work, but ASEAN enterprises are also considering more complex approaches such as multi-cloud and network management to further enhance the outcome, according to the analyst firm.
Besides the new cloud buying drivers, there have also been shifts in solution criteria, GlobalData noted, with cloud security, vertical capabilities, managed services and cost management features now among the top areas enterprises are looking for when considering new cloud services.
“Service providers need to react fast by aligning their proposition with the new buying drivers and solution criteria,” Amir said. “Understanding customers’ cloud strategy is important and everything else such as SD-WAN and security will fall naturally in place.
“This will offer them an advantage to capture the high growth opportunity and differentiate against other players in the competitive market,” he added.
Earlier this year, fellow analyst firm Synergy Research Group claimed that global enterprise spending on cloud infrastructure services continued to ramp up aggressively in 2020, growing by 35 per cent, to reach almost US$130 billion.
At the same time, in 2020, worldwide spending on the enterprise data centre hardware and software typically used in on-premises environments – comprising servers, storage, networking, security and associated software – was US$89 billion.
The analyst firm pointed out that this ratio continued a decade-long trend of explosive growth in cloud and virtual stagnation in the market for enterprise-owned data centre equipment.
However, it is thought that Covid-19 helped to egg the trend on, with the two markets being of nearly equal size in 2019, but 2020 seeing a major shift in worldwide IT operations, with a swing towards cloud.