Manufacturing sector heads to the cloud

Enterprise Innovation editors
07 May 2015

The transition to "cloud also" or "cloud first" is well under way for manufacturers around the globe according to new survey results from IDC.

Data includes 593 manufacturers from the following countries - United States, Canada, United Kingdom, Germany, France, Sweden, China, India, Malaysia, S. Korea, Australia, Japan, Mexico, The Netherlands, Spain, Italy, and Brazil.

In Asia Pacific, 49% of manufacturing respondents are using cloud – public or private - or intend to use cloud.

In the United States, 41% of manufacturing respondents indicated they are accessing IT resources via the public cloud.

Also, almost 50% of European manufacturing respondents noted they have adopted or will adopt ERP in the public cloud.

The advantages of cloud computing for manufacturers are significant, as line of business leaders and their IT organizations increasingly rely on cloud to flexibly deliver IT resources at the cost and speed the business requires.

A majority of manufacturers worldwide are currently using public (66%) or private cloud (68%) for more than two applications.

Three-fifths (61.6%) indicated their company's posture for net new IT services is "cloud also", and the number is only slightly lower for replacing IT existing functionality (56.8%).

IT operations are the primary benefactor today from manufacturers' cloud strategy, and only 30% to 35% of respondents indicate operations, supply chain and logistics, sales, or engineering expect to benefit.

Cloud services and cloud architecture's share of the annual IT budget allocation is going to increase 27% in the next two years.

According to the report, one of the ways in which cloud will bring significant value to the business is in allowing manufacturers to more easily make use of the data that will be connected from sensors throughout the manufacturing operations with IP-based connectivity and the Internet of Things.

In the short term, IDC Manufacturing Insights expects that manufacturers may opt for private clouds as a means of extending internal IT infrastructure without raising significant concerns over data security, for the cost saving and operational agility.

However, capacity will likely shift to more cost-effective public clouds for noncritical efforts and even more over the long term as confidence and technology increases in security via the public cloud.

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