Study: Adoption Of Cloud-Native Applications Set To Double By 2020

Study: Adoption Of Cloud-Native Applications Set To Double By 2020

New research from global consulting company Capgemini has indicated a significant step change in enterprise cloud adoption through the increased use of cloud native applications – applications and services built to perform optimally in the cloud, leveraging platform as a service (PaaS).

According to the study, 15 per cent of new enterprise applications are cloud native today, with adoption set to increase rapidly in the next three years, jumping to 32 per cent by 2020.

Franck Greverie, cloud and cybersecurity group leader at Capgemini, said: “This is an exciting shift in our industry. We predict that cloud-native architectures will become the default option for customer-facing applications by 2020, driven by a need to continuously deploy innovations at an accelerated pace and enhance the customer experience.

“Businesses that delay adopting this approach will struggle to make up the gap with cloud-native competitors.

“Organisations need to listen to their CIOs and understand the huge potential of cloud-native technology to deliver business benefits and innovation. CIOs must also address culture and skills gaps within their own organisations on the road to being cloud-native leaders.”

The study of more than 900 senior professionals working in both IT and the wider business, from 11 countries across Europe, the Americas and Australia, attributes this shift in cloud adoption to a desire to improve business agility (74 per cent), increase collaboration with external partners (70 per cent) and deliver better customer experiences (67 per cent).

It identifies a small group of ‘leader’ organisations that are already committing to cloud-native applications – those with more than 20 per cent of their new enterprise applications developed in this way – with these leaders almost twice as likely to report increases in organisational revenues attributable to cloud-native applications than slower adopters (84 per cent versus 44 per cent).

Compared with the laggards (organisations where less than 10 per cent of new applications are built using a cloud-native approach), cloud-native leaders also:

  • Are more likely to describe their approach to software development as agile (69 per cent to 37 per cent), their deployment as automated (78 per cent to 46 per cent), and their development operations teams as integrated (69 per cent to 38 per cent).
  • Display a more growth-focused attitude towards IT functions, with improving the customer experience (90 per cent), business agility (87 per cent) and scalability (85 per cent) viewed as higher priorities than reducing costs (79 per cent).

The study found that as adoption increases, CIOs at organisations leveraging or planning to leverage cloud-native applications expect IT to become even more central to supporting business ambitions, including the development of new business models (67 per cent), rapid scaling of the business (72 per cent), quicker updating of products/services (71 per cent) and adopting new routes to market (68 per cent).

However, many CIOs are facing challenges in building business cases to invest in cloud-native apps from business leaders that see cost reduction as the priority for IT teams.

These challenges range from the organisational, including battling an ingrained culture that is opposed to the nature of cloud-native working (65 per cent) and a skills shortage when developing cloud-native apps (70 per cent), to the technical, such as difficulties integrating with legacy infrastructure (62 per cent) and being locked in to vendor contracts (58 per cent).

Digital challengers drive sector disruption

Just over a quarter of high-tech firms (26 per cent) and almost a third of manufacturing firms (29 per cent) are cloud-native leaders, compared with just 11 per cent of banking providers, 18 per cent of insurers and 22 per cent of consumer products, retail and distribution (CPRD) firms.

Priorities are changing as a result of the digital challengers – banks now build 10 per cent (the average across all banks surveyed, including leaders, late adopters and laggards) of their new applications using a cloud-native approach, while almost half of insurers (47 per cent) and almost one-third of CPRD firms (27 per cent) say that cloud native forms a core part of their technology strategies.

All three groups – banks, insurers and CPRD firms – plan to spend considerably more on PaaS in three years than they do today (41 per cent, 44 per cent and 41 per cent respectively).

Building a cloud-native business

The report also offers six recommendations to help CIOs turn their organisations into cloud-native leaders:

  • Assess the application portfolio and identify priorities for cloud-native development.
  • Build credibility by demonstrating a cloud roadmap and ability to deliver growth.
  • Start small and then scale up to develop a skilled team.
  • Adapt the IT operating model to support both business agility and stability.
  • Be pragmatic in selecting technologies.
  • Incubate a culture of innovation, collaboration, testing and learning.


Please login with linkedin to comment

capgemini cloud-native applications einsights

Latest News

Atomic 212° Wins BMW Group’s Media Planning & Buying
  • Media

Atomic 212° Wins BMW Group’s Media Planning & Buying

Following a competitive pitch process with representation from major agency groups, BMW Group Australia has appointed Atomic 212° as the lead agency to manage their media planning and buying. The appointment is effective from January 1st 2021 and is a testament to Atomic 212°’s data-led smarter, faster and accountable media model. The account will sit […]

Deliveroo Turns On Beach Delivery For This Summer
  • Media

Deliveroo Turns On Beach Delivery For This Summer

With temperatures up to 40 degrees across Australia last week, it’s safe to say it’s officially Summer weather. Enter beach delivery by Deliveroo to guarantee a sand-free sandwich or burger whilst you enjoy the rays and waves. From 2 December, Australians nationwide will be able to set many of the country’s 10,000 beaches as their […]

Ex-Hogarth Executive & Fusion Co-Gounder Bucks Agency Model With New Product Design Firm, Diagram 
  • Advertising

Ex-Hogarth Executive & Fusion Co-Gounder Bucks Agency Model With New Product Design Firm, Diagram 

John Chaplin (pictured), former Chief Product Officer of Hogarth Australia and Co-founder of award winning digital agency Fusion, has launched a new digital product design company, Diagram. Based in Sydney, Diagram are a collective of creators and makers who partner with individuals, agencies, startups, business and industry to design and build considered, elegant digital products. […]

Salesforce Makes Moves In Automation And Digital Transformation As Part Of Dreamforce 2020
  • Media

Salesforce Makes Moves In Automation And Digital Transformation As Part Of Dreamforce 2020

After announcing the mega acquisition of workplace chat company Slack yesterday, tech giant Salesforce has made a raft of announcements as part of this year’s annual Dreamforce event, which has been held virtually. Headlining the announcements was news of Salesforce Hyperforce, which comes as a reimagination of the company’s platform architecture built to securely and […]

Marketing strategy on digital mobile platform - cross-device tracking programmatic advertising and multi targeting with laptop and mobile phone gadgets.
  • Media

DoubleVerify Launches Publisher Suite For Digital Publishers

DoubleVerify has today announced the launch of the DV Publisher Suite, providing the measurement, insights and tools digital publishers need to improve ad delivery, assess inventory quality and maximize yield. For publishers, generating revenue has never been more complex. Today’s demand-side landscape consists of thousands of potential buyers, each with their own unique requirements, transacting […]

Chocolate Cookie  -Photographed on Hasselblad H3D2-39mb Camera
  • Technology

Verizon Media Launches ConnectID As A Cookie-Less Solution

Verizon Media has announced the launch of its new unified identity solution, Verizon Media ConnectID. Built on the foundation of Verizon Media’s consumer-first values and market-leading advertising technologies, the new unified ID solution is designed to support advertisers, publishers and consumers as the digital landscape evolves away from cookies as a way to manage and […]

Fleur Head Steps Into MD Role At VMLY&R New Zealand
  • Advertising

Fleur Head Steps Into MD Role At VMLY&R New Zealand

VMLY&R NZ announces Fleur Head is stepping into the role of Managing Director VMLY&R New Zealand following the resignation of current MD James Mok. Head was previously Managing Director of VMLY&R Wellington. Wellington-based Head, who has more than 25 years agency and management experience across both the Auckland and Wellington markets, will lead VMLY&R NZ […]