Top 10 Cloud Adoption Trends in North America, Europe & Asia

There's no one-size-fits all approach to global cloud adoption. See the cloud buyer regional differences & explore the latest IDC Cloud Pulse data with Chris Kanthan.
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Successful cloud vendors know that there is no one-size-fits-all strategy to gain competitive advantage and market share. Cloud providers must personalize their marketing/sales messages based on customer demographics – for example, CTO versus developer, SMB versus large enterprises, or financial firm versus manufacturing company. In this blog post, we look at how cloud buyers vary across three important global regions: North America, Western Europe, and Asia-Pacific.

Among these regions, there are substantive differences in cloud adoption, digital transformation, business objectives, investments, technical skill sets etc. These are compelling insights that will enable global cloud and service providers to optimize their outreach efforts, fine-tune their investments in products and services, and increase revenue.

The charts and data in this blog are from IDC’s Cloud Pulse buyer view surveys that were done in Q1 2020 and Q2 2020.

The abbreviations in the charts are “NA” for North America, “WE” for Western Europe, and “A/P” for Asia-Pacific. The number of respondents in the surveys were 1328 for Q2 and 2000 for Q1.

Let us dive into the Top 10 insights about the global regional differences among cloud buyers.

1. Broad implementation of production applications in cloud:

IDC 2020 Broad implementation of production applications in cloud

Looking at who is broadly deploying production applications in the cloud, North America comes ahead with 33%; and Europe comes last with 21%. This is an opportunity for cloud vendors to help their European customers. However, cloud vendors must have in-depth understanding of Europe’s compliance and regulatory laws, which is a factor in slower adoption of cloud.

European enterprises are also tad more sensitive to cost. Thus, cloud vendors must be prepared to demonstrate compelling TCO and ROI benefits of cloud. Finally, security and cloud management concerns are two prominent issues that must be addressed to encourage customers to move their production applications to the cloud.

2. Significant increase in cloud spending next year

IDC 2020 significant increase in cloud spending 2021 for regions

More than 40% of enterprise customers in North America and Asia Pacific say they will significantly increase their spending on cloud. However, only 27% of European respondents say the same. Those who are nimble and agile will adapt to the pandemic-induced crisis and shift more workloads to the cloud.

3. “Public Cloud Only” Strategy

IDC 2020 Public cloud only strategy by region

Again, due to various compliance, privacy, and governance regulations such as GDPR, Europe is half as likely to adopt a “public cloud only” strategy as compared to the other two regions. Cloud vendors will be better off positioning private clouds to European customers – especially solutions like Amazon AWS Outposts, which offer the best of both worlds – for more security/compliance and ease of integration with public cloud.

4. Single Cloud Provider

The U.S. leads the world in multicloud adoption. Given that American companies like Amazon, Microsoft, Google, IBM, and others are the pioneers and innovators of cloud computing, the results are not surprising. Asia and Europe are still relatively conservative in adopting multicloud architecture, but they will undergo drastic transformation in the next five years. Europe’s new initiative called GAIA-X might be a game-changer and could spur cloud ecosystems and adoption of multicloud architecture.

IDC 2020 enterprises who use a single cloud provider by region

5. AI/ML being routinely used for Cloud Ops

As multicloud adoption goes mainstream, enterprises need sophisticated tools to monitor, manage, and secure all the cloud resources – virtual machines, containers, applications, storage, networking etc. AI/ML is far superior to traditional methods in detecting intrusions, attacks, and other security anomalies. The future of cloud operations will be AIOps. For now, North America and Asia are twice more likely to use AI for cloud operations than Europe.

IDC 2020 AI/ML for Cloud Ops - routine use by region

6. Where significant investments are being directed

Where are enterprises primarily directing their investments? In North America, the areas are cloud management, enterprise applications, and security. Europe’s focus is on              cloud infrastructure, security, and staff training. In Asia-Pacific, the targets are somewhat similar to those in the USA: security, enterprise applications, and cloud infrastructure.

7. DX, BX and ITX over the next five years

IDC 2020 Business Transformation (BX) and IT Transformation (ITX) over the next 5 years by region

This chart is revealing. Asia is very bullish on business transformation (BX) and IT transformation (ITX) in the next five years. China is leading the pack with a bold embrace of emerging technologies such as 5G, AI, blockchain, FinTech, digital currency, robotics, IoT, autonomous vehicles, smart cities, and quantum computing. Europe is well behind the other two regions in the sense of urgency; and this is an area where cloud vendors can educate and guide their customers.

As for digital transformation disrupting their industry in the next five years, the following are the stats for NA, WE and AP respectively: 46%, 28%, 70%. Again, European – and to some extent, American – enterprises might be underestimating the tsunami of disruption that is accelerated by COVID-19.

8. First to adopt new technologies

IDC 2020 first to adopt new technologies by region

Both North American and Asian enterprises are more willing to take risks and adopt emerging and untested technologies than their European counterparts. This bold attitude is necessary to spur innovation, create new digital strategies, become resilient, and expand market share.

9. Interdependencies in applications – today and two years from now

IDC 2020 high interdependencies in apps today and 2 years from now

Applications that easily communicate with one another eliminate silos and increase efficiency. Frictionless interactions between applications also eliminate data silos and lead to more helpful insights, which improve customer experience and optimize business process. Modern applications are going to be modular, cloud native, and based on standardized API’s.

10.Most critical workloads in 2 years

In the next two years, what will be the three most critical workloads? CRM and ERM show up for all three regions. The third one is Big Data for Europe and Asia. For North America, the third one is Supply Chain Management (SCM).

“Know your customer” is a crucial guiding principle in the business world. However, successful vendors also act as trusted partners who can transform the customer’s business models, modernize their IT, and empower customers to thrive in rapidly evolving market dynamics. Cloud vendors can greatly benefit from studies such as Cloud Pulse, which give granular insights into preferences, objectives, capabilities, and many more aspects of enterprise buyers of cloud services. With a clear understanding of the customer, cloud vendors can deliver optimal marketing/sales messages and redirect their own R&D investments into the most impactful products and services.

Explore IDC’s most recent Cloud Pulse survey findings:

Chris Kanthan

Research Manager, Cloud BuyerView