A Cloud-Based Digital Fabric Supports a Transformed Enterprise - THE 2021 CDW CLOUD REPORT
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THE CDW 2 02 1 CLOUD R EP ORT A Cloud-Based Digital Fabric Supports a Transformed Enterprise THE 2021 CDW CLOUD REPORT CDW.ca | 800.972.3922 CDW.ca/cloud | 800.972.3922 1
THE CDW 2 02 1 CLOUD R EP ORT
TABLE OF CONTENTS
Section 1:
Digital Leaders are Delivering Superior Digital
Experiences for Customers Using Cloud Services 5
Section 2:
Current State of Cloud Adoption 14
Section 3:
Benefits of Cloud 19
Section 4:
Workloads in the Cloud 23
Section 5:
Security and the Cloud 29
Section 6:
Future Outlook/Guidance 32
CDW.ca/cloud | 800.972.3922 2
THE CDW 2 02 1 CLOUD R EP ORT EXECUTIVE SUMMARY: Cloud services are becoming integral to Canadian organizations’ ability to achieve their digital transformation ambitions. As organizations try to take advantage of cloud technology, it is important to understand best practices and key considerations for successful adoption. This report explores how organizations approach their cloud journey from the perspective of digital experiences, cloud adoption maturity, benefits achieved, workloads and security. It provides an overview of best practices and some of the leading technology trends that CDW is seeing in the Canadian market to help organizations invest in cloud successfully. Organizations across Canada are continually looking to overcome their business challenges by leveraging innovative technology solutions. The onset of a global pandemic has further expedited the need for scalable and reliable solutions in order to sustain business operations and employee productivity while introducing digital services and experiences. Cloud platforms are often at the centre of these solutions, and as a result are one of the most common discussion points for IT teams, senior leaders and even Boards of Directors today. CDW.ca/cloud | 800.972.3922 3
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Digital Leaders are Delivering Superior Digital Experiences for One in three medium-sized firms found cloud helped drive digital transformation in
Customers Using Cloud Services their organizations
The No. 1 reason that Canadian CEOs are embracing digital transformation is that Cloud services enable Canadian organizations to achieve their innovation goals
customers are demanding it
Companies that are further along their digital transformation journey are more Workloads in the Cloud
focused on revenue growth, while those further behind are more focused on cost Canadian organizations are shifting from running workloads in internal data centres to
savings and cash flow management third party cloud data centres
Digitally determined organizations view technologies that improve user experience Enterprise applications are being run on-premise and in cloud environments resulting
as more important to their digital strategy than their peers that are behind in their in 56% of organizations deploying a hybrid IT model
transformation journey
Nearly half of Canadian organizations repatriate workloads from the cloud to run in
The ability to deliver reliable digital services and experiences at scale will grow in different computing environments
importance over the next five years
Canadian organizations balance various factors when deciding to migrate or repatriate
Organizations will invest in analytics, cloud and AI/ML to ensure reliable digital services applications
and experiences
Digitally determined organizations consider security, workload business value and the
86% of organizations that move to the cloud will repatriate some workloads due to ability to use cloud capabilities to support analytics and AI/ML as important factors in
security, performance and cost their workload placement decisions
As of 2020, one in three Canadian organizations stated that they had an edge
Current State of Cloud Adoption computing strategy
Public cloud adoption continues to accelerate in Canada
Data gravity is pushing computing to the edge for those customers that have an edge
Public cloud adoption by medium-sized Canadian organizations is behind their smaller strategy
and larger peers
Medium-sized organizations are not prioritizing investments in PaaS and IaaS Security and the Cloud
solutions Security remains the most important feature when it comes to hybrid cloud
COVID-19 has affected cloud investment plans Canadian organizations need to focus on people and process to create secure cloud
Cloud adoption is growing but organizations really want cloud maturity as quickly as environments
possible Training and awareness are critical to ensure cloud security
Benefits of Cloud
Constrained or reduced IT budgets are typically one of the most common factors that
lead Canadian organizations to consider using cloud services
Organizations that are progressing along their cloud journeys found they realized the
greatest benefits from improved IT security, improved business agility, scalability and
simplified and standardized IT infrastructure and applications
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Section 1: Digital Leaders are Delivering
Superior Digital Experiences for
Customers Using Cloud Services
FINDING 1: The No.1 reason that Canadian CEOs are
embracing digital transformation is that customers are
demanding it.
CDW defines digital transformation as: the realignment of, or new investment
in, technology, business models and processes to drive new value for
customers and employees and more effectively compete in an ever-changing
digital economy. This new value can include operational efficiencies, financial
benefits and improvements to the customer experience1.
Driven by shifts in consumer demand and the need to stay ahead of
competition; the imperative to engage in digital transformation is not lost on
Canadian CEOs. An IDC study (Figure 1) of CEO priorities conducted in February
2020 found that:
26% of Canadian CEOs reported that their customers were demanding
they engage in digital transformation
24% of CEOs cited that engaging in digital transformation allows for
improved earnings
18% of CEOs highlighted the fact that they must contend with increased
competition from both new and existing competitors
13% of CEOs highlighted ambitions to disrupt their market by providing
digital offerings and experiences
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CDW Whitepaper: How to Accelerate Digital Transformation 5
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Figure 1: What is the primary reason your organization is providing digital
products, services and/or experiences?
Canada
Our customers are demanding it 26%
We expect to have improved earnings as a result 24%
There are new market entrants providing digital offerings 18%
and experiences
Our existing competition is now providing digital offerings 13%
and experiences
We are intending to disrupt the market by providing digital 13%
offerings and experiences
Our Board of Directors has set a target and timeline for us to 5%
follow
Source: IDC WW CEO Priorities Survey 2020, February 2020, N=38
Customer demands and increased competition from other companies and new
digital offerings are driving CEOs to change the way their organizations deliver
services.
FINDING 2: Companies that are further along their digital
transformation journey are more focused on revenue
growth, while those further behind are more focused on
cost savings and cash flow management.
Business priorities such as improving productivity, hiring and retaining staff
and refining product portfolios to remain competitive are equally important for
Canadian organizations, regardless of their digital transformation maturity.
However, when we consider business priorities that are more clearly aligned to Organizations on the path of digital
revenue growth or financial improvements, we see a gap forming between those
companies that are further along in their digital transformation journey than transformation are now reaping the
those that are lagging.
benefits as they are able to deliver
value to internal stakeholders and
external customers in an agile and
effective manner. The ability to
execute on a digital strategy becomes
easier as organizations retire their
CDW.ca/cloud | 800.972.3922 technical debt and legacy processes.6
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Organizations that have an integrated enterprise-wide digital strategy with
continuous innovation programs that leverage advanced technologies are "digitally
determined." While those that have a more tactical approach with no long-term
focus or integrated strategy are "digitally distraught."
54% of digitally determined companies see increasing market share and
revenue as a top business priority as compared to only 37% of digitally
distraught companies
Sales and marketing initiatives are a top business priority for 32% of firms
further ahead in digital transformation but only 18% of firms behind in digital
transformation
Conversely, cost savings are a priority for 43 percent of the digitally distraught, and
only 28 percent of firms that are digitally determined. While cash flow management
is a business priority for 25 percent of firms behind in digital transformation yet
only five percent of firms that are further ahead.
Clearly, those that are digitally determined are more focused on top-line revenue
growth, while those that are digitally distraught are more likely to be focused
on financial-related business priorities that are often seen in more defensive
positions.
Figure 2: Overall - Looking out into the next year, what will be your
organization's top business priorities?
Digitally Digitally
Distraught Determined
Operational efficiency and productivity gains 57% 58%
Increasing market share and revenue 37% 54%
Sales and marketing initiatives 18% 32%
Refining product/service portfolio 27% 30%
Hiring and retaining talent 35% 28%
Organization-wide cost savings 43% 28%
Market expansion 23% 26%
Investments in R&D 16% 19%
Managing supplier & distribution partnerships 14% 16%
Cash flow management 25% 5%
Source: IDC Canada Top Executive Survey 2020, March 2020, N=156
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THE CDW 2 02 1 CLOUD R EP ORT Organizations on the path of digital transformation are now reaping the benefits as they are able to deliver value to internal stakeholders and external customers in an agile and effective manner. The ability to execute on a digital strategy becomes easier as organizations retire their technical debt and legacy processes. The momentum garnered from completed digital transformation projects and initiatives drives additional investments to improve and enhance internal processes. This will result in even better customer engagement and services. FINDING 3: Digitally determined organizations view technologies that improve user experience as more important to their digital strategy than their peers that are behind in their transformation journey. Organizations engaging in digital transformation leverage a wide array of technologies to achieve their goals. These technologies need to enable organizations to sustain and scale their business and operations, hereby warranting organizations to build out a digital platform or digital fabric. IDC defines the "digital transformation platform" as the future technology architecture that accelerates digital transformation initiatives for the enterprise — enabling the rapid creation of externally facing digital products, services and experiences while aggressively modernizing the internal IT environment toward an "intelligent core." Digitally determined organizations place higher importance on a broader range of future technologies than those that are digitally distraught. A 2019 IDC study on digital transformation asked Canadian organizations to rate the importance of various technologies to their digital strategies. The study found there was a wider gap in importance between the digitally determined and digitally distraught on technologies like customer experience, analytics, application programming interface (API) management and data management. These technologies make for a deeper, richer digital experience by presenting user-centric information in a simplified, friendly experience. CDW.ca/cloud | 800.972.3922 8
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Digitally determined organizations also view supporting technologies like security,
IT infrastructure and cloud as being more important than organizations classified
as digitally distraught. This suggests that digitally determined organizations realize
that user-focused, data-centric digital environments are required to thrive in the
digital economy – a realization that digital laggards need to embrace quickly to
remain competitive.
Figure 3: How important will each of the following technology areas be for your
digital platform strategy over the next 12 months?
Digitally Digitally
Distraught Determined
Security 73.2% 84.2%
Advanced analytics 62.9% 83.5%
Customer experience 63.9% 82.7%
IT infrastructure 70.1% 82.0%
Data management software 67.0% 80.5%
API management technologies 55.7% 79.7%
Multi-service cloud platforms (IaaS and PaaS) 70.1% 77.4%
Cloud management and orchestration software 66.0% 75.9%
Open source 67.0% 66.9%
Source: IDC Digital Transformation (DX) Executive Sentiment Survey 2019, August 2019 Digitally
Distraught N= 97 Digitally Determined N=133
As digital transformation gains momentum, organizations can shorten the time
from ideation to implementation, enabling them to realize benefits faster. They are
also able to leverage the learnings, new processes and tools from prior initiatives to
more quickly solve other internal challenges.
FINDING 4: The ability to deliver reliable digital services and
experiences at scale will grow in importance over the next
five years according to Canadian CXOs.
Senior line of business (LOB) and IT executives in Canada expect nearly 50 percent
of their revenue to be generated by digital products, services and experiences over
the next five years, according to an IDC study2. As a result, 75 percent of Canadian
CXOs believe that delivering innovative services and experiences will be important
over the five years (Figure 4). These ambitions will strain IT systems and will put
pressure on organizations to ensure scalability and reliability.
As a result, nearly four in five Canadian CXOs believe their organizations' ability to
reliably deliver digital services and experiences at scale will be very more important
in the next five years (Figure 5).
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IDC CEO Priorities Survey 2020, February 2020 9
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Figure 4: Delivering innovative services and experiences at scale- Please
identify to what extent this area will be important to your organization over the
next five years as compared to today.
Canada
Much less important 7%
Less important 4%
Same level of importance 14%
More important 39%
Significantly more important 36%
Source: IDC CxO View of the Future Enterprise in the Digital Economy 2020, February,2020 N=100
Figure 5: Ensuring reliable digital services and experiences - Please identify
to what extent this area will be important to your organization over the next
five years as compared to today.
Canada
Much less important 0%
Less important 4%
Same level of importance 18%
More important 45%
Significantly more important 33%
Source: IDC CxO View of the Future Enterprise in the Digital Economy 2020, February,2020 N=100
FINDING 5: Organizations will invest in analytics, cloud
and artificial intelligence (AI)/machine learning (ML) to
ensure reliable digital services and experiences.
To deliver reliable digital services and experiences Canadian organizations
realize they will need to invest and modernize their existing capabilities.
78% of CXOs stated their organizations are investing in data mining
and analytics technologies to support reliable digital services and
experiences
52% of CXOs stated their organizations are investing in cloud-based
infrastructure and applications, as well as AI and ML technologies
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Data mining, analytics and AI/ML enable personalized digital experiences, like
making product recommendations based on transaction history and personal
interests (Figure 6). AI/ML enables organizations to gather insights from external
sources like social media as well as to innovate and improve their internal processes.
Cloud-based AI/ML services allow organizations to quickly access this technology
and existing toolkits.
Figure 6: With respect to ensuring reliable digital services and experiences, in
what technologies will you invest in 2020-2021?
Canada
Data mining and analytics 78%
Cloud-based infrastructure and applications 52%
Artificial intelligence/machine learning/deep learning 52%
Containers and microservices 48%
Governance/regulatory tools 35%
Agile software development processes 26%
Blockchain 22%
Source: IDC CxO View of the Future Enterprise in the Digital Economy 2020, February,2020 N=23
Cloud-based infrastructure and applications based on containers and
microservices enable reliable digital experiences as they can abstract multiple
instances of an application from the underlying infrastructure, and provide
unlimited scalability, enabling:
Retailers to manage surges in e-commerce volumes
Customers to access streaming media services that require high
bandwidth
Citizens being able to access digital government services during
unprecedented events
Healthcare providers to manage surges in telehealth and engage in
remote patient monitoring
Large numbers of organizations to collaborate remotely during the
COVID-19 pandemic
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Cloud-based deployments of AI/ML for data mining and analytics allow
organizations to quicky achieve results, ensuring that organizations will continue
to invest in these solutions.
FINDING 6: Organizations will invest in cloud technologies to
deliver digital services and experiences at scale.
To progress on their digital transformation journey, Canadian organizations
clearly need to build out a robust and reliable digital platform or fabric that will
enable them to provide reliable services while scaling innovative services and
experiences.
The digital fabric will be underpinned by cloud services.
Many organizations have or plan to invest in cloud technologies, according to
CXOs surveyed by IDC (Figure 7).
52% of organizations are investing in SaaS in a bid to deploy or introduce
scalable business functionalities
45% of organizations highlighted investment in PaaS and IaaS enabling
them to leverage functionalities around application development and data
management while being able to drive scalability and agility
45% of organizations are seeking to leverage open source software and
tools to gain access to functionalities, control and support
However, given data residency, security and governance requirements,
organizations cannot deploy all their services on public clouds. That’s why 41
percent indicated investments in hybrid/multicloud technologies and hybrid/
multicloud management solutions.
Figure 7: With respect to delivering innovative services and experiences at
scale, what technologies will you invest in 2020-2021?
Canada
Cloud: SaaS 52%
Cloud: PaaS 45%
Cloud: IaaS 45%
Open source software and tools 45%
Containers and other hybrid/multicloud technologies 41%
Hybrid/multicloud management 41%
Low code/no code applications 17%
Source: IDC CxO View of the Future Enterprise in the Digital Economy 2020, February,2020 N=29
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Cloud solutions will continue to be a key method used by organizations to deliver
services and new initiatives. Organizations need to continue to leverage SaaS
services for availability, scalability, security and access to innovation.
FINDING 7: Eighty-six percent of organizations that move to
the cloud will repatriate some workloads due to security,
performance and cost3.
Moving to the cloud requires organizations to consider factors such as security,
performance and cost. During the early days of cloud adoption, in a bid to accelerate
their journey, many organizations quickly moved workloads to public cloud
services. However, not every organization did the due diligence to determine how
this shift would impact their performance, cost and security. This often resulted
in the repatriation of workloads from public cloud environments to dedicated
infrastructure (on-premise or private). In cases where technical issues were
resolved, organizations redeployed workloads back to the cloud. Adherence to
"data sovereignty" has also led to repatriation of workloads in a bid to comply with
provincial or federal mandates.
To accelerate their cloud journeys, many organizations adopted a "cloud-first"
strategy. For some, this turned into a "cloud-only" approach which led to issues for
certain workloads. There is no "one-size-fits-all" strategy. Whether organizations
choose to retire, rehost, replatform, retain or refactor their workloads, it is critical
to understand the needs of the business, the attributes of the workloads and the
strength of the platform to be leveraged. By avoiding “force-fitting” workloads,
organizations are able to ensure alignment and the best business value possible.
Technical debt and legacy investment
amongst medium-sized organizations
result in complex environments,
making it difficult to migrate services
to the cloud. At the same time, not
having access to the right skills can
make it difficult to plan and execute the
transformation of services to the cloud.
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IDC WW Cloud Pulse Q1 2019, June 2019 13THE CDW 2 02 1 CLOUD R EP ORT
Section 2: Current State of Cloud Adoption
FINDING 1: Public cloud adoption continues to accelerate in
Canada, with more than one in three organizations adopting
IaaS or PaaS.
Adoption of cloud services has accelerated over the past few years in Canada.
Organizations are leveraging cloud services to introduce software as a service
(SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS)
capabilities.
For many organizations, their first foray into cloud begins with SaaS as many
applications are easily accessible online. Organizations typically choose to move
non-mission-critical workloads to SaaS in a bid to reduce costs and improve
application management.
Adoption of PaaS and IaaS continues to grow, albeit a bit slower than SaaS, largely
due to existing on-premise deployments or factors such as security and skills. A
2020 IDC Canada study of IT decision makers (Figure 8) found that 92 percent of
organizations surveyed have adopted at least one SaaS solution, 47 percent of the
organizations have adopted PaaS and 34 percent of organizations have adopted at
least one IaaS solution.
FINDING 2: Public cloud adoption by medium-sized Canadian
organizations is behind their smaller and larger peers.
Medium-sized (100-499 employees) Canadian organizations are lagging behind
their peers in public cloud adoption, especially PaaS and IaaS (Figure 8). Smaller
(1-99 employees) and larger (500+ employees) organizations are two times more
likely to have adopted PaaS and they are three times more likely to have adopted
IaaS solutions than medium-sized organizations.
Medium-sized organizations are more burdened by technical debt than their
smaller peers. They are large enough to have built up substantial IT investments
over time that they don’t want to dispose of yet. As compared to their larger peers,
medium-sized firms are less likely to view the cloud as the platform for digital
innovation.
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Figure 8: Cloud Users by Different Cloud Categories in Canada, 2020
Organization size
Total Small Medium Large
(1-99 (100-499 (500+ 33% of large firms see
employees) employees) employees)
SaaS user 92% 97% 88% 90% the cloud as the platform
IaaS user
PaaS user
34%
47%
38%
59%
12%
24%
47%
53%
for digital innovation,
None of the above 8% 3% 11% 10% whereas only 25% of
Source: IDC Canada BITAP (Business and IT Advisory Panel Survey) n2 2020 Survey, May 2020 IT
Decisionmakers N=155 medium-sized firms have
Technical debt and legacy investment amongst medium-sized organizations the same viewpoint.4
result in complex environments, making it difficult to migrate services to the
cloud. At the same time, not having access to the right skills can make it difficult
to plan and execute the transformation of services to the cloud.
FINDING 3: Medium-sized organizations are not prioritizing
investments in PaaS and IaaS solutions in the next
12 months.
Nearly 50 percent of medium-sized organizations are staying the course on
their cloud adoption and investment plans despite the onset of COVID-19. Their
investment plans over the next 12 months don't include PaaS and IaaS solutions
that can support digital transformation. The proportion of medium-sized firms
that plan to invest in analytics, application development and deployment,
database management, AI and machine learning, servers and storage during the
next 12 months lag behind their smaller and large peers (Figure 9). It is important
for medium-sized organizations to invest in PaaS and IaaS solutions to form a
digital infrastructure base that is secure, scalable and flexible to support business
growth and enhance digital resiliency. If medium-sized organizations continue to
lag their smaller and larger peers in their use of these cloud technologies, they
will find it increasingly difficult to compete in the digital economy.
4
IDC Canada ITAP (IT Advisory Panel Survey) n6 2020 Survey, September 2020 N=404
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Figure 9: What are your organization's plans with respect to the following PaaS/IaaS offerings? (Have deployed, planning to expand within 12 months and new adoption in
12 months)
Total Small Medium Large
(1-99 (100-499 (500+
employees) employees) employees)
Unweighted sample size 155 52 51 52
Application development/testing/deployment platform 22% 33% 13% 19%
Database DBaaS 16% 23% 5% 19%
Business Intelligence/analytics 26% 33% 15% 27%
Cognitive computing/machine learning/data discovery 17% 28% 6% 15%
Server capacity on demand 21% 27% 9% 25%
Storage capacity on demand 17% 22% 10% 17%
Source: IDC Canada BITAP (Business and IT Advisory Panel Survey) n2 2020 Survey, May 2020 IT Decisionmakers N=155
FINDING 4: COVID-19 has affected cloud investment plans in the near term with many smaller and medium-sized organizations unsure
on how to proceed.
COVID-19 has greatly affected Canada's economy and caused companies to re-evaluate their business initiatives and IT investments. Driven by the need to sustain business and
operational continuity, planned cloud investments are being assessed:
31% of Canadian organizations say their cloud investments are proceeding as planned in the next 12 months
5% of Canadian organizations say they will invest more in cloud services due to COVID-19
31% of Canadian organizations say they have decided to delay cloud investment decisions due to COVID-19
In May 2020, 23 percent of Canadian organizations were undecided on their path forward with regard to their cloud investments (Figure 10). In the spring there was confusion on
how to respond to the overnight pivot to remote work or closures. This is especially true for smaller and medium-sized organizations as nearly 30 percent indicated that they had
not decided on their cloud expansion or deployment plans. They were focused on evaluating the impact of the lockdown on their operations and survival.
Figure 10: How would COVID-19 impact your organization’s plan to expand or deploy cloud services within the next 12 months?
Total Small Medium Large
(1-99 (100-499 (500+
employees) employees) employees)
We are going ahead as planned 31% 26% 29% 39%
We will invest more 15% 9% 19% 18%
We have decided to delay our decision to expand/deploy 31% 33% 23% 34%
Haven’t decided yet 23% 31% 29% 9%
Source: IDC Canada BITAP (Business and IT Advisory Panel Survey) n2 2020 Survey, May 2020 IT Decisionmakers N=111
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Cloud services made it possible for organizations to ensure business continuity and
to move forward with many of their initiatives over the course of the pandemic;
when data centres were either unavailable or inaccessible. The "pay-as-you-go" or
operational expenses (OPEX) model around cloud services consumption make it very
attractive for organizations given the level of uncertainty within the market.
FINDING 5: Cloud adoption is growing but organizations really
want cloud maturity – fast!
Adopting a technology is different than mastering the technology to achieve optimal
business results. Organizations adopting cloud services usually progress through
five stages of maturity:
Initial (level 1): Ad hoc exploration of cloud technology options. Beginning pilots
for specific use cases.
Managed (level 2): Gathering input from across the business. Starting to cloud-
enable IT resources. Still reactive.
Defined (level 3): Standardized process for implementation, cost and other
implications of technology options across cloud delivery models. Following
documented approach/process.
Quantitatively Managed (level 4): Orchestrating cloud services across the
business, predictably. Measuring and managing cloud success/etc., with
quantitative metrics.
Optimized (level 5): Extending IT and cloud capabilities into new product
Organizations can lean on partners such offerings. Continuous process improvement across the business and all cloud
delivery models.
as value-added resellers (VARs) and
system integrators (SIs) specialized in Organizations that are able to reach the Optimized stage have achieved technology
mastery. They have invested in processes, skills, are able to measure return on
cloud services to help them at all five investment (ROI) and continuously engage in innovation and process improvement.
In a 2020 survey of nearly 300 Canadian organizations, 61 percent of organizations
stages of the cloud maturity journey. assess their cloud maturity to be in the early stages of "Initial" and "Managed."
This would be beneficial, particularly However, in three years time, 74 percent of organizations expect to progress on the
maturity scale toward being "Defined," "Quantitatively Managed" and "Optimized"
during the initial stages, as cloud adoption (Figure 11).
requires process changes that may be
difficult and confusing to navigate.
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Lines of business executives hope to be further along their cloud maturity journey than their peers in the IT department. Seventy-nine percent of LOB executives expect their
organizations to be in medium-to-high cloud maturity in three years, compared to 68 percent of IT executives.
Figure 11: Canadian cloud maturity today and three years from now
Which of the following best describes your organization’s cloud maturity level today? Where would you expect to be Total IT Small IT Medium
in three years? - Today (1-99 (100-499
employees) employees)
Unweighted sample size. 291 149 142
Initial (level 1): Ad hoc exploration of cloud technology options. Beginning pilots for specific use cases. 25% 33% 18%
Managed (level 2): Gathering input from across the business. Starting to cloud-enable IT resources. Still reactive. 36% 27% 44%
Defined (level 3): Standardized process for implementation, cost and other implications of technology options across 24% 26% 22%
cloud delivery models. Following documented approach/process.
Quantitatively Managed (level 4): Orchestrate cloud services across the business, predictably. Measure and manage 13% 12% 14%
cloud success/etc., with quantitative metrics.
Optimized (level 5): Extend IT and cloud capabilities into new product offerings. Continuous process improvement 1% 1% 1%
across the business and all cloud delivery models.
Which of the following best describes your organization’s cloud maturity level today? Where would you expect to be Total IT LOB
in three years? - In three years
Unweighted sample size. 291 149 142
Initial (level 1): Ad hoc exploration of cloud technology options. Beginning pilots for specific use cases. 7% 6% 7%
Managed (level 2): Gathering input from across the business. Starting to cloud-enable IT resources. Still reactive. 14% 14% 14%
Defined (level 3): Standardized process for implementation, cost and other implications of technology options across 30% 32% 29%
cloud delivery models. Following documented approach/process.
Quantitatively Managed (level 4): Orchestrate cloud services across the business, predictably. Measure and manage 30% 23% 37%
cloud success/etc., with quantitative metrics.
Optimized (level 5): Extend IT and cloud capabilities into new product offerings. Continuous process improvement 19% 25% 14%
across the business and all cloud delivery models.
Source: IDC Canada BITAP (Business and IT Advisory Panel Survey) n2 2020 Survey, May 2020 N=291
Organizations can lean on partners such as value-added resellers (VARs) and system integrators (SIs) specialized in cloud services to help them at all five stages of the cloud maturity
journey. This would be beneficial, particularly during the initial stages, as cloud adoption requires process changes that may be difficult and confusing to navigate. Many organizations
continue to rely on partners as they progress in their cloud maturity to avoid making mistakes along the way. While cloud offers the ability to "fail-fast," many organizations would
prefer not to fail in the first place.
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Section 3: Benefits of Cloud
FINDING 1: Constrained or reduced IT budgets are typically one of the most common factors that lead Canadian organizations to consider
using cloud services.
For many Canadian organizations, the main driver or trigger of cloud adoption is constrained or reduced IT budgets (Figure 12). It is also the primary driver for over half smaller organizations
and 46 percent of medium-sized organizations. However, for larger organizations, the ability to meet compliance and governance requirements was a more compelling event followed by
constrained/reduced IT budgets.
There are other factors beyond cost savings that contribute to the adoption of cloud services. Organizations adopt cloud services to support their digital transformation ambitions. Other
drivers of cloud services include access to new services, functionalities and the ability to scale up capacity to support exponential data growth. Larger enterprises with more expansive
resources are increasingly adopting a cloud-first approach as on-premise or private hardware and software investments reach end of life.
As organizations mature in their understanding and use of cloud services, we can expect them to either adopt a combination of "cloud-first," "cloud-also" or "cloud-only" approaches to their
IT/business strategy.
Figure 12: Which of the following "trigger events" have been most important in leading you to use cloud services?
Total Small Medium Large
(1-99 (100-499 (500+
employees) employees) employees)
IT budgets being constrained or reduced 44% 52% 46% 41%
Keeping up with compliance across regions (e.g., GDPR) 43% 33% 44% 44%
Supporting digital transformation initiatives 40% 48% 42% 37%
Need functionality or services only found in cloud offerings 36% 33% 33% 38%
Software applications coming to the end of their life 35% 33% 25% 40%
Data has grown beyond the capacity of our existing systems 35% 48% 29% 35%
Reducing number of data centres 34% 14% 38% 36%
Failing to meet demands of business due to legacy systems 33% 14% 35% 36%
Hardware (e.g., servers) coming to the end of its life 32% 19% 17% 40%
Data breach 30% 19% 23% 34%
Eliminating all data centres 24% 14% 25% 25%
Source: IDC CloudPath 2020, Canada N=192
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FINDING 2: Organizations that are progressing along their cloud
journeys found they realized the greatest benefits from
improved IT security, improved business agility, scalability and
simplified and standardized IT infrastructure and applications.
At least one-third of Canadian organizations reported that improved IT security,
improved business agility and simplified and standardized IT infrastructure and
applications were the greatest benefits of cloud. These features surpassed lower IT
costs, improved staff productivity and greater speed to market (Figure 13).
38% of organizations said they benefited from improved IT security. Cloud gives users
access to security functionalities and services in a timely and cost-effective manner.
34% of them benefited from improved business agility. Organizations can
introduce services and functionalities faster.
33% benefited from simplified and standardized IT infrastructure and applications
(which likely supported improved business agility).
Figure 13: Overall Rank - Where have you seen the greatest benefits in your cloud journey?
Total Small Medium Large
(1-99 (100-499 (500+
employees) employees) employees)
Improved IT security 38% 48% 42% 35%
Improved business agility 34% 43% 35% 33%
Simplified and standardized IT 33% 48% 23% 35%
infrastructure and applications
platforms
Gave business units more direct 30% 29% 29% 31%
control over sourcing their own IT Organizations that are progressing
solutions
Helped drive innovation and/ 29% 19% 33% 28% along their cloud journeys found they
or digital transformation in the
business
realized the greatest benefits from
Reduced the total size of IT budget 28% 24% 27% 29% improved IT security, improved business
Improved time to market and/or ex- 28% 29% 23% 30%
panded into new market segments agility, scalability and simplified and
Improve IT staff productivity and/
or reduce size of staff
28% 10% 31% 29%
standardized IT infrastructure and
Improved customer experience 26% 14% 29% 27% applications.
(CX)
Access to the newest functionality 26% 38% 27% 23%
faster
CDW.ca/cloud | 800.972.3922 Source: IDC CloudPath 2020, Canada N=192 20THE CDW 2 02 1 CLOUD R EP ORT
Although we found that the biggest trigger for cloud adoption was
driven by budget challenges, once organizations start to deploy cloud,
the greatest benefits turn out to be improved security, business
agility, simplified and standardized infrastructure, sourcing control and
enhanced innovation and digital transformation. While considerations
may include cost optimization, other factors should be included in the
cloud business strategy for deployment.
FINDING 3: One in three medium-sized firms found cloud
helped drive digital transformation in their organizations,
even more so than their smaller and larger peers.
When it came to cloud adoption, medium-sized organizations indicated
having lower cloud adoption as compared to smaller and larger organizations.
Furthermore, only 25 percent of medium-sized firms see the cloud as the
platform for digital innovation, meaning that medium-sized firms are more
likely falling behind in cloud and digital transformation. Using cloud services for
digital transformation enables medium-sized organization to gain a competitive
advantage. However, the finding that 33 percent of medium-sized firms found
their cloud journey helped drive digital transformation is a strong validation why
medium-sized firms should expand their use of cloud services.
FINDING 4: Cloud services enable Canadian organizations to
achieve their innovation goals.
Both digitally determined and digitally distraught organizations are increasingly
going to lean toward public cloud services as the foundation to achieve their
innovation goals.
It gives them the ability to access capabilities in advanced technologies and
create use cases that rely on advanced analytics, AI/ML and internet of things
Both digitally determined and digitally (IoT). The use cases associated with these technologies require scalable and
reliable infrastructure that allows for real-time insights or response. Leveraging
distraught organizations are increasingly these technologies via public cloud services also ensures adherence to security
and governance requirements. For Canadian organizations, access to innovative
going to lean toward public cloud services technologies is critical factor when it comes to choosing cloud services providers.
An IDC study found that access to advanced/predictive analytics, followed by
as the foundation to achieve their IoT and AI/ML were the top three most important technologies for Canadian
organizations (Figure 14).
innovation goals.
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Figure 14: In choosing a cloud service provider, how important were each of the
following innovative technologies to your selection? (1 = Very Unimportant and
7 = Very Important)
Average
Advanced/predictive analytics 5.82
Internet of Things (IoT) 5.79
Machine learning/artificial intelligence 5.75
Converged and hyperconverged infrastructure 5.66
Edge computing 5.65
Blockchain 5.64
Robotics 5.53
Voice and conversational AI 5.49
Robotic process automation (RPA) 5.46
Augmented & virtual reality 5.35
3D Printing 5.25
Unweighted Valid N 192
Source: IDC CloudPath 2020, Canada N=192 Scale: 1=Very unimportant 7=Very important
The natural tendency for the data to pull
applications and processing is known
as “data gravity.” Conceptually, data
behaves like the physical law of gravity,
with the object of greater mass pulling
objects of lower mass to it. Like media
companies that use content delivery
networking and caching to keep content
like videos and games close to users,
organizations may benefit by moving
processing closer to their data.
CDW.ca/cloud | 800.972.3922 22THE CDW 2 02 1 CLOUD R EP ORT
Section 4: Workloads in the Cloud
FINDING 1: Canadian organizations are shifting from running
workloads in internal data centres to third party cloud data
centres.
When it comes to their enterprise workloads, Canadian organizations are
increasingly relying on third party cloud data centres instead of their internal IT
environments. This is reflected in IT budgets; a greater proportion of the budget
is being allocated for cloud services (Figure 15). In 2020, 36 percent of IT budgets
were allocated for organizations' existing traditional IT environment and 14
percent were allocated to in-house private clouds. Both delivery models are
run by internal IT teams. The remaining 50 percent of IT budgets were spent on
external data centres such as co-location data centres, hosted private clouds
and public clouds. By 2022, Canadian organizations expect to allocate 44 percent
of IT budgets to internal data centres and 56 percent of budgets to run workloads
in external data centres.
Public cloud services are expected see the biggest increase in budget allocation –
rising from 20 percent in 2020 to 29 percent in 2022.
Figure 15: Please estimate the percentage of your organization’s IT budget that
is allocated across the following types of IT and cloud models in 2020? How
about by 2022? (Mean Score)
2020 2022
Traditional in-house IT 36% 30%
In-house private cloud 14% 13%
Traditional - hosted/outsourced 17% 12%
Hosted private cloud 13% 15%
Public cloud 20% 29%
Source: IDC Canada BITAP (Business and IT Advisory Panel Survey) n2 2020 Survey, May 2020 N=291
Canadian organizations realize there is no “one-size-fits-all” platform in the market.
It is important to assign workloads and applications to the right platform for optimal
consumption. Almost all organizations will operate a private cloud and access public
cloud resources.
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FINDING 2: Enterprise applications are being run on-premise and in cloud environments resulting in 56 percent of organizations deploying a
hybrid IT model.
It is a common belief that enterprise applications are either run entirely on-premise or in public clouds. However, these workloads are increasingly deployed across hybrid IT environments.
When asked how they deployed their commonly used enterprise applications, 56 percent of Canadian organizations highlighted that they run their enterprise applications within hybrid IT
environments (Figure 16). That means these applications use multiple deployment models and organizations need to ensure a high degree of integration, security and governance across
these environments.
While 30 percent of workloads are still being deployed on-premises, organizations are likely to migrate them into a cloud environment when either the software contract comes to term
or as they gain experience with cloud and look to replace the on-premise solution. Based on the type of data being processed, performance, cost, security and governance requirements,
organizations will choose whether these workloads will be deployed on hybrid, private or public cloud environments.
There are some minor differences looking at individual workloads, with several workloads more likely to be in the public cloud only. Office productivity, human capital management (HCM) and
customer relationship management (CRM) applications are the most likely to be run in the public cloud only. These SaaS solutions enable quick onboarding of new or additional users, easy
deployment of upgrades and enhancements, and the shifted from CAPEX to OPEX, better aligning costs with activity.
Figure 16: What are your cloud deployment plans for each application?
Average Financial CRM HCM Procurement EAM SCM Analytics Office Email
Apps
Only on-premise 30% 30% 31% 28% 33% 32% 26% 33% 27% 29%
Only private cloud 7% 6% 6% 6% 6% 5% 6% 4% 10% 13%
Only public cloud 7% 5% 9% 10% 6% 8% 6% 5% 11% 6%
Hybrid IT 56% 58% 54% 56% 55% 55% 62% 58% 51% 52%
All environments 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Source: IDC CloudPath 2020, Canada N=192
As more and more enterprise application workloads are being replatformed to container-based services that leverage a microservices architecture, the ability to migrate workloads and
applications between private and public clouds increases.
FINDING 3: Nearly half of Canadian organizations repatriate workloads from the cloud to run in different computing environments.
Nearly 60 percent of Canadian organizations run their enterprise application workloads in hybrid IT environments (Figure 17). These hybrid IT environments are a combination of on-premise,
private cloud and public cloud deployments, giving organizations the ability to choose the right environment for each workload.
Forty-two percent of organizations repatriated their workloads from public cloud to dedicated infrastructure. This is largely due to a lack of understanding with respect to security,
governance, performance and cost. In some cases, IT departments responded to pressure from the board or senior business decision makers to move to the cloud quickly. In other cases, it
might have been a rush to adapt or adhere to a cloud-first strategy.
20% of organizations want to repatriate workloads from public cloud to on-premise data centres
22% of organizations want to repatriate workloads from public cloud to private cloud
29% of organizations want to move workloads from private cloud to public cloud
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Figure 17: For each of the following applications in the cloud, what changes to deployment environment have been made?
Average Financial CRM HCM Procurement EAM SCM Analytics Office Email
` Apps
Moved from cloud to 20% 18% 18% 26% 21% 20% 21% 21% 13% 18%
on-premises
Moved from private to public 29% 33% 34% 32% 38% 29% 34% 30% 14% 16%
Moved from public to private 22% 14% 17% 18% 21% 18% 14% 17% 34% 41%
Source: IDC CloudPath 2020, Canada N=192
Organizations are increasingly turning to cloud operating models so they can position their workloads across multiple platforms and get the most value and ROI from their investments. Very
few organizations are moving their workloads from the cloud straight back to a centralized on-premises data centre. In most cases, repatriation is considered because the organization has
not optimized its cloud services, or the workload should not have been moved in the first place.
FINDING 4: Canadian organizations balance various factors when deciding to migrate or repatriate applications.
In the past, organizations had the choice of deploying workloads on-premise or to hosted (service provider data centre) environments. Today, given the various cloud deployment models that
are available, organizations need to consider various technical and business factors.
Security is an important consideration when deciding which applications to migrate to the cloud. This was the top factor for 67 percent of Canadian organizations for both IT and LOB decision
makers, regardless of where organizations were on the digital transformation maturity scale (Figure 18).
Impact on current business operations was another top consideration for 64 percent of the organizations, followed by compliance, business value of the workloads and ease of migration.
While the top five factors are similar for IT and LOB decision makers, IT decision makers also consider access to cloud capabilities around analytics and AI/ML. LOB decision makers evaluate if
they have the right level of technical expertise.
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Figure 18: How important were the following factors when determining which applications to migrate to the cloud and which to keep on premise?
IT vs LOB Approach to Digital Transformation
Important or Very Important Total IT LOB Digitally Distraught Digitally
Determined
Security 67% 65% 71% 66% 70%
Impact on current business operations 64% 65% 62% 64% 65%
Compliance 60% 60% 61% 62% 53%
Workload business value 59% 61% 57% 56% 70%
Ease to migrate 58% 57% 61% 57% 63%
Technical expertise 57% 55% 59% 56% 58%
Ongoing cost of operation (TCO) 56% 61% 48% 57% 53%
Workload usage pattern 55% 54% 55% 52% 63%
Cost of migration 54% 54% 55% 54% 56%
Latency 54% 55% 52% 56% 49%
Ability to use cloud capabilities like analytics or AI/ML 54% 58% 46% 49% 70%
Support of associated departments that utilize application 51% 54% 46% 50% 53%
Simplicity of application or application interdependencies 51% 53% 48% 49% 58%
Unweighted Valid N 192 123 69 149 43
Source: IDC CloudPath 2020, Canada N=192
FINDING 5: Digitally determined organizations consider security, workload business value and the ability to use cloud capabilities to support
analytics and AI/ML as important factors in their workload placement decisions.
The top factors determining where to run application workloads dramatically change based on the level of digital maturity of organizations. Seventy percent of digitally determined
organizations consider security, workload business value and ability to use cloud capabilities to support analytics or AI/ML. These organizations are focused on business value and risk
mitigation rather than cost. Increasingly, organizations need to consider how and where data should be processed.
The natural tendency for the data to pull applications and processing is known as “data gravity.” Conceptually, data behaves like the physical law of gravity, with the object of greater mass
pulling objects of lower mass to it. Like media companies that use content delivery networking and caching to keep content like videos and games close to users, organizations may benefit
by moving processing closer to their data. Organizations should evaluate the benefits cloud providers deliver, including data processing services such as AI/ML, to determine if there is value
in overcoming data gravity. Alternatively, organizations could use a co-location provider that allows for both local "on-premises" data processes combined with rapid access to public cloud
providers while allowing access to the right tools in a mixed hybrid cloud environment.
FINDING 6: As of 2020, one in three Canadian organizations stated that they had an edge computing strategy.
While we have highlighted the need for organizations to effectively address data gravity, this notion of moving the processing closer to where the data is generated introduces the concept of
edge computing. According to IDC, edge computing is a distributed infrastructure deployment model that brings compute capabilities, storage capacity, networking and software and services
capabilities out of the data centre and closer to the places where data is created, and insight is required.
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Digital transformation drives the exploration of use cases, many of which can
be enabled by edge computing. Edge computing enables industry specific use
cases such as gaming, content delivery, smart grid management, in-patient
monitoring and traffic management that benefit from real time data processing
and improved latency. Cloud services compliment edge strategies by consolidating
the information captured by edge devices, created by edge computing and offering
advanced analytics or AI/ML capabilities to enhance the information’s value to
the organization. As organizations mature in their use of edge computing, they will
also leverage cloud services for the management and orchestration of their edge
devices.
Most Canadian organizations do not have an edge computing strategy (Figure
19). Only, one in three medium-sized and larger businesses stated they had an
edge computing strategy. Interestingly, 40 percent of small businesses stated
they have an edge computing strategy, a probable outcome of them using a
broader definition of edge computing and a need for greater awareness around
the true definition of edge computing.
Figure 19: Does your organization have an 'edge' computing strategy?
Total Small Medium Large
(1-99 (100-499 (500+
employees) employees) employees)
Unweighted Sample Size 504 103 203 198
Yes 33% 40% 29% 32%
No 60% 50% 66% 60%
Don’t Know 8% 11% 5% 8%
Source: IDC Canada ITAP (IT Advisory Panel Survey) n3 2020 Survey, April 2020 N=504
The majority of senior IT executives (57 percent) have an edge computing strategy
(Figure 20), however there appears to be declining levels of awareness of this
strategy within IT, based on seniority. This could reflect that organizations are still
exploring the role of edge computing within their technology roadmaps and have
yet to communicate the strategy to the wider IT team. Overall, there is a need for
greater awareness around edge computing and its use cases.
Figure 20: Does your organization have an 'edge' computing strategy? By IT persona
Total IT Exec IT Dir IT Mgr IT Pros
Unweighted Sample Size 504 168 115 162 46
Yes 33% 57% 27% 20% 13%
No 60% 42% 67% 72% 74%
Don’t Know 8% 1% 6% 8% 13%
Source: IDC Canada ITAP (IT Advisory Panel Survey) n3 2020 Survey, April 2020 N=504
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FINDING 7: Data gravity is pushing computing to the edge for those
customers that have an edge strategy.
As previously discussed, data gravity results in applications and processing power being
pulled to where the data resides. This clearly affects organizations' edge computing
strategies. A recent study of IT decision makers on aspects or features of edge computing
that would affect their organization's strategy in the next 12 months found that (Figure 21):
53% of firms that have edge computing strategies stated that their strategies
are affected by data processing at the edge. They need to process data at the
edge because the volumes are too high to pull back to a centralized server,
or the applications require real-time processes. IoT related applications and
autonomous vehicles are examples of workloads requiring data processing at
the edge.
42% of firms that have edge computing strategies are affected by content
delivery at the edge. As more devices use a specific cloud-based workload and
consume more and more data from the cloud, many companies are turning to
content delivery networks to decentralize the data, avoiding the data transfer
to the centralized server and back. Content delivery at the edge is important
for industries like media and entertainment for workloads like streaming media,
online gaming and video-heavy social media that involve huge data volumes that
become too "heavy" to move.
26% of firms that have edge computing strategies are affected by richer media
experience for the end user. Digital transformation is creating a demand for
greatly personalized user experiences. To accomplish this, digital leaders are using
customer experience software, advanced analytics and AI/ML to analyze large
volumes of consumer behaviour data in the context of a specific user's current
experience.
Figure 21: Which of the following aspects and features of edge computing will affect
your organization's strategy in the next 12 months?
Total Yes No Don't Know
Unweighted Sample Size 504 183 285 36 Data gravity is pushing
Data processing at the edge
Content delivery at the edge
29%
24%
53%
42%
20%
17%
2%
8%
computing to the edge for
Richer media experience for the
end-user
18% 26% 15% 5%
those customers that have
Source: IDC Canada ITAP (IT Advisory Panel Survey) n3 2020 Survey, April 2020 N=504
an edge strategy.
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