The pace of hybrid cloud deployment in the manufacturing industry is expected to exceed the global average

Multi-cloud adoption by manufacturing companies is expected to double in the next two years

Nutanix, a leader in enterprise cloud computing, recently released the results of its survey on the manufacturing industry in its Enterprise Cloud Index report, which aims to evaluate the deployment plans of manufacturing companies for private, public and hybrid clouds. The report shows that the manufacturing industry has already led the global average in terms of hybrid cloud usage and deployment plans. At present, the penetration rate of hybrid cloud deployment in manufacturing companies has reached 19%, slightly higher than the global average. At the same time, manufacturers also plan to more than double the penetration rate of hybrid cloud deployment to 45% in the next two years, exceeding the global average of 4%.

A report from consulting firm IDC points out that the global manufacturing industry is currently in an "innovation dilemma" 1: Although manufacturers themselves are eager to promote innovation and change, their existing IT systems may constrain their pace of innovation and change. Digital changes such as "Industry 4.0" have created new opportunities for manufacturers to break the innovation dilemma. To this end, corporate managers must seize new opportunities to create value, rather than just prioritizing the operation of traditional businesses. Manufacturers have always faced a difficult trade-off. On the one hand, with the increasing globalization of the market and competition, they must bear tremendous pressure to achieve production efficiency and operational goals, and on the other hand, they must continue to invest in future growth.

To meet this challenge, companies need to introduce new technology solutions to help balance short-term and long-term goals. Manufacturers' IT leaders must abandon the traditional path of relying on short-term adjustments to drive revenue growth, and instead consider long-term solutions that can enhance automation, improve data utilization, and improve customer experience. The Enterprise Cloud Index report shows that leading companies in the manufacturing industry are not constrained by outdated IT systems, but are taking the lead in applying new technologies to promote modernization. The distributed cloud model provides a set of solutions that take into account speed, flexibility, and localization, which can help manufacturers improve efficiency without sacrificing quality.

Although 91% of the respondents in this survey believe that hybrid cloud is the ideal IT model, the global average penetration rate of hybrid cloud is only 18.5%, partly because there are still many challenges in transforming the hybrid cloud model. The report shows that in terms of deploying hybrid cloud, the manufacturing industry faces similar obstacles as other industries around the world, such as lack of application mobility, data security/compliance, performance, management, and lack of IT talent. Compared with other industries, the manufacturing industry has a larger talent gap in artificial intelligence/machine learning, hybrid cloud, blockchain, edge computing/IoT, etc.

Other key findings from the report include:

43% of manufacturers currently use traditional data centers as their primary IT infrastructure, slightly higher than the global average of 41%.

However, the proportion of manufacturers using a single public cloud service is higher than that of other industries. Currently, 20% of manufacturing companies use a single public cloud service, and the global average is 12%. This shows that as workloads increase, existing IT systems can no longer handle all tasks locally, so manufacturers are using the cloud as a solution.

Manufacturers are advancing private cloud deployment. 56% of manufacturers surveyed said they already run enterprise applications on private clouds, exceeding the global average of 7%.

Manufacturers are struggling to control cloud spending. One of the goals of enterprises deploying hybrid clouds is to control IT spending. For enterprises that adopt public cloud, public cloud spending accounts for 26% of their annual IT budget, and this proportion is expected to increase to 35% in two years. Most importantly, among enterprises that adopt public cloud, more than a third (36%) of enterprises' public cloud spending exceeds budget.

When deciding on the operating environment for workloads, manufacturers are more likely to prioritize security and compliance than other industries. 31% of respondents from all industries globally consider security and compliance as the top decision factor, while the proportion in manufacturing is 34%.

The deployment prospects of hybrid cloud in countries around the world and across industries are very promising, reflecting the increasing automation and flexibility of IT environments, which enable enterprises to choose to buy, build or rent their IT infrastructure resources according to the needs of rapidly transforming applications.

“The message from this report is clear. Traditional IT architectures are no longer suitable for the needs of modern Chinese manufacturers,” said Ma Li, managing director of Nutanix China. “China is looking to the manufacturing industry to successfully achieve the goals of ‘Made in China 2025’ to drive future growth of the Chinese economy. As the manufacturing industry transforms to higher-value products and services, manufacturers are abandoning traditional IT infrastructure and actively introducing hyperconverged infrastructure and hybrid cloud to keep up with the trend of the digital age and maintain corporate competitiveness.”

Nutanix commissioned Vanson Bourne to survey more than 2,300 IT decision makers from various industries around the world, including 337 manufacturing and production companies. The survey questions involved the current environment in which they run their business applications, the deployment environment they plan to adopt in the future, the cloud challenges they are facing, and the priority of their organization's cloud deployment solutions and other IT projects. The survey respondents came from companies of different sizes in various industries in the Americas, Europe, the Middle East, Africa, and Asia Pacific and Japan.