Stan Lepeak, Director, KPMG Global Sourcing Advisory Research

KPMG recently released a comprehensive global market study on cloud computing adoption and usage.  On November 15th, I will be leading a webcast discussion related to the study.  An initial analysis of the results identifies some interesting findings.  One of them is the disparity of cloud services adoption rates among businesses across major geographies.

Organizations in Asia Pac (51 percent of respondents from China, and the balance from Japan, Australia and India) are adopting cloud computing services at a faster pace than their peers in North America (US 82 percent, and the balance from Canada and Mexico) or Western Europe.  Thirty-one percent of Asia Pac respondents (198 out of a total of a total sample size of 806 end-users) indicated that their organizations have fully implemented a cloud environment compared to 23 percent in Western Europe and just 20 percent in North America.

And it is not as if the higher adoption rate is fueled by throwing money at cloud aspirations.  Eighty-six percent of Asia Pac respondents indicated that cost reductions and/or savings are a necessary prerequisite for their organizations to move to a cloud environment.  This compares to seventy-two percent of Western European and seventy-one percent of North American respondents.  Additionally, a higher percentage of  Asia Pac firms than North American or Western European indicated that required costs savings need to be in the 11-25 percent range (vs. 1-10 percent).

Asia Pac organizations are utilizing all cloud computing models (e.g., private, hybrid, public) to drive deployment.  In each of these three categories, a higher percentage of Asia Pac respondents than North American or Western European cited use or intent to use each of these cloud computing models.

There are several potential reasons why Asia Pac organizations are more rapidly adopting cloud computing.  One is that firms, especially in rapidly growing markets such as China, have more discretionary funds to invest in cloud computing services.   They have the need to support quickly expanding market requirements and are rapidly innovating their delivery models and support systems.  These same organizations, especially in China and India are less likely to have the legacy IT baggage (e.g., homegrown IT systems, dated and bloated commercial enterprise software systems) that slows and complicates many Western firms cloud adoption plans.

Regardless of the drivers, assuming there are true benefits to end-user organizations of adopting cloud computing, these adoption trends are advantageous to Asia Pac organizations and, if they continue, could potentially create or expand competitive advantage against Western peers.  More aggressive use of cloud computing services could enable Asia Pac firms to more rapidly catch-up and even some (many?) could surpass Western peers’ IT and business services capabilities.

This is not to imply that Western firms must more rampantly or haphazardly rush into cloud computing.  Rather it highlights (yet another) dimension of business where Asia Pac countries and firms are becoming much more aggressive against their Western-based competition and against which that competition must formulate and execute a response.

For more on Cloud computing, visit equaterra.com/cloud or the KPMG Shared Services and Outsourcing Institute Cloud Computing topic page.

Filed under: Cloud Computing, Information Technology (IT), Market Trends and News by EquaTerra