Cloud adoption can add $414 billion to enterprise profits

Cloud adoption can add $414 billion to enterprise profits

Ravi Kumar infosys.jpg

Enterprises across six regions can add up to $414 billion in new net profits annually, through effective cloud adoption.

The outlook, published in the Infosys Cloud Radar 2021, was compiled from the responses of more than 2,500 business executives across the US, UK, France, Germany, Australia, and New Zealand. The report was compiled by Infosys Knowledge Institute (IKI), a research arm of Infosys.

It found a correlation between cloud adoption and competencies such as speed to market and capability. A strong profit link was identified when using cloud to rapidly bring new solutions and services to market and such investments provided a foundation on which to leverage AI and automation, and build new cloud-based sources of revenue.

Ravi Kumar S., president, Infosys said: “Effectively leveraging cloud is a transformational pillar in digital journeys. Where early cloud was a tool for allowing companies to rapidly scale, modern cloud allows companies to rapidly innovate.

"Today’s cloud creates a network effect across processes, data, content, experience and more. This network effect keeps enterprises relevant in a rapidly changing new digital age. The findings from the Infosys Cloud Radar 2021 comprehensively show that growth and profitability can be correlated to superior enterprise cloud adoption and orchestration.”

Among the findings, those delivering "exceptional performance" in the cloud showed a strong motivation to use cloud for business growth, namely, increasing speed to market, adding capabilities, and increasing scale.

Highlighted as "exceptional performers", such firms also demonstrated greater confidence in terms of cloud spending and were more likely to engage with three or more cloud service providers, giving them the capability to place workloads optimally. They also more frequently utilise a hybrid multi-cloud arrangement.

However, despite acceleration in cloud adoption, only a fraction of large companies reached the highest level of performance and adoption. The study found that nearly one out of six companies achieved exceptional cloud performance. In cloud adoption terms, fewer than one in five have crossed the 60% threshold to reap the profit benefits.

By 2022, more than 40% of enterprises surveyed plan to shift over 60 percent of systems into the cloud, up from 17% at present.

Leading the way

Cloud-fueled profit boosts can be attained by companies in any region or industry. However, they only kick in when businesses have at least 60% of their systems in the cloud. To benefit from AI on cloud, the bar is even higher. Businesses must have at least 80% of their business functions – such as cross domain business applications – in the cloud for AI to boost profit growth.

Of all the industries represented in the survey, telcos were highlighted as having the potential to become the leaders in cloud progression by 2022 – if they deliver on their migration plans.

In 2020, the industry moved 47% of its business functions to the cloud, followed by 45% of IT systems. If 2022 projections are realised, telecom firms will be the industry leaders in cloud progression.

As many as 44% of telecoms companies predict they will reach a 60% hybrid cloud threshold by 2022 – the point at which speed and capability benefits manifest.


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