Over two thirds of large organisations ready to move ERP systems to the cloud in 18 months

Virtustream, Inc. has announced the results of its UK research paper: ‘The Reality of Enterprise Cloud Migration in 2013’. Currently, 69 per cent of large organisations are planning to migrate their business-critical applications, such as ERP systems, into the cloud by the end of 2014. This demonstrates a notable maturity of thinking about enterprise applications in the cloud. Senior IT decision makers have accepted that this migration is beneficial in terms of business agility (53 per cent), competitiveness (42 per cent) and productivity (40 per cent) as well as delivering a 17 per cent IT budget saving, on average.

The majority of large organisations (84 per cent) run an ERP system (mainly either Oracle or SAP). These enterprises also manage particularly complex IT estates with SAP users in particular running an average of 530 applications. Two in every five (38 per cent) of these apps are legacy and not built for cloud. These SAP users are at the forefront of cloud adoption with over a quarter (27 per cent) of legacy applications migrated to the cloud and 89 per cent of them using cloud technology somewhere in the wider organisation. Of all the ERP vendors, SAP users are in right position to reap the benefits of business-critical applications in the cloud.

“The end of 2014 will be a pivotal moment for the enterprise cloud,” said Simon Aspinall, chief vertical markets, strategy, marketing, Virtustream. “ERP and other mission-critical applications have mainly been deployed conventionally – the cuckoos in cloud land. The next 18 months will see these critical applications pushed out of their in-house data centre nests and migrated to the cloud.”

A number of factors have stopped senior IT decision makers crossing the cloud chasm; the top concerns included cloud security (72 per cent), risk to the business (60 per cent) and loss of application control (54 per cent). A number of important technological advances such as geo-tagging data, chip-level authentication through IntelTXT, application-level SLAs and legislation have developed. This has helped senior IT teams pragmatically assess the opportunity and see that cloud is no longer just for consumers and test and development; it is also for government and large enterprises.
The top three business drivers for large organisations included greater company agility (64 per cent), greater competitiveness (58 per cent) and increased productivity (58 per cent), with these mirroring the business benefits from migrating enterprise applications to the cloud. From a technology perspective, 59 per cent of senior decision makers expected IT budget savings and on average would witness a reduction of approximately £1.5 million, or nearer £2 million for SAP users.

“The research shows that the large enterprise audience in the UK is a more mature one,” said Aspinall. “They need to meet business demands as efficiently as possible and are looking for trusted enterprise class cloud capabilities that meet their requirements on agility, scalability, compliance and security. Performance of such business-critical applications must be guaranteed whilst maintaining cost-effective delivery mechanisms.”

Other statistics
· The vast majority of respondents (87 per cent) stated that they were aware of migrating mission-critical applications to the cloud
· 65 per cent of respondents said they were aware that ERP systems could be moved to the cloud
· Respondents knew about the possibility of migrating critical applications to the cloud but there is still apprehension – 48 per cent of SAP users were ‘highly concerned’ as opposed to 26 per cent for other ERP users
· SAP users predict their ERP migration will happen further into the future with an average of 18 months
· Just 14 per cent of organisations with ERP have undergone its full migration to the cloud (15 per cent for SAP users)
· Only 15 per cent of large organisations claim they would never migrate their ERP system to the cloud