Market Overview

Manufacturing Industry Gears Up to Outpace Average Adoption of Hybrid Cloud by 2020 Reports Nutanix

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Manufacturers Will More than Double Multicloud Use in the Next Two
Years

Nutanix,
Inc.
(NASDAQ: NTNX),
a leader in enterprise cloud computing, today announced the findings of
its Enterprise Cloud Index results for the manufacturing sector,
measuring manufacturing companies' plans for adopting private, public
and hybrid clouds. The report revealed that the manufacturing industry's
hybrid cloud usage and plans outpace the global average across
industries. The deployment of hybrid clouds in manufacturing and
production companies has currently reached 19% penetration, slightly
ahead of the global average. Moreover, manufacturers plan to more than
double their hybrid cloud deployments to 45% penetration in two years;
outpacing the global average by 4 percent.

The manufacturing industry is at an "innovation
impasse
," 1 meaning manufacturers have a desire to
innovate and drive transformation, but legacy IT systems have the
potential to constrain their ability to do so. The opportunity for
manufacturers to embrace digitization efforts including "Industry 4.0"
initiatives can break the impasse, but executives must focus on new
opportunities to create value and not only prioritize
traditional business operations
. Manufacturing organizations face
the constant challenge of trade-offs: they are under pressure to meet
current productivity and operational goals in an increasingly global and
highly competitive marketplace, but they also need to invest in future
growth.

This challenge has created a demand for new technology solutions that
can help balance the trade-off between current and future goals. IT
leaders in manufacturing must avoid the beaten path of finding
short-term fixes for increasing revenue; instead, they should look to
long-term solutions that enable automation, enhanced use of data and
improvements in customer experience. The Enterprise Cloud Index findings
indicate that manufacturing leaders are aggressively adopting new
technology to embrace modernization instead of getting left behind with
legacy systems. The distributed cloud model offers a solution that
delivers speed, flexibility, and localization, allowing manufacturers to
improve efficiency without compromising quality.

While 91% of survey respondents reported hybrid cloud as the ideal IT
model, today's global average hybrid cloud penetration level is at 18.5%
— the disparity due in part to challenges of transitioning to the hybrid
cloud model. Manufacturing industries reported barriers to adopting
hybrid cloud that mirrored global roadblocks, including limitations in
application mobility, data security/compliance, performance, management
and a shortage of IT talent. Compared to other industries, manufacturers
reported greater IT talent deficits in AI/ML, hybrid cloud, blockchain,
and edge computing/IoT.

Other key findings of the report include:

  • 43% of manufacturers surveyed are currently using a traditional data
    center as their primary IT infrastructure, slightly outpacing the
    global average of 41%
  • However, manufacturers currently use a single public cloud
    service more often than any other industry
    .
    20% of
    manufacturing companies reported using a single cloud service,
    compared to the global average of 12% — a testament to the fact that
    manufacturers are starting to turn to the cloud as a solution, given
    that they deal with legacy IT systems and cannot handle workloads
    on-prem.
  • Manufacturers are also advancing the movement to private cloud:
    56% of manufacturers surveyed said that they run
    enterprise applications in a private cloud, outpacing the global
    average by 7%.
  • Manufacturers are struggling to control cloud spend. One
    motivation for deploying hybrid clouds is enterprises' need to gain
    control over their IT spend. Organizations that use public cloud spend
    26% of their annual IT budget on public cloud, with this percentage
    predicted to increase to 35% in two years' time. Most notable,
    however, is that more than a third (36%) of organizations using public
    clouds said their spending has exceeded their budgets.
  • Manufacturers chose security and compliance slightly more often than
    companies in other industries as the top factor in deciding where to
    run workloads: while 31% of respondents across all industries and
    geographies named security and compliance as the number one decision
    criterion, 34% of manufacturing organizations chose security and
    compliance as the top factor
    .

The bullish outlook for hybrid cloud adoption globally and across
industries is reflective of an IT landscape growing increasingly
automated and flexible enough that enterprises have the choice to buy,
build, or rent their IT infrastructure resources based on fast
transforming application requirements.

"Manufacturers are investing in modernizing their IT stack, and adopting industry
4.0 solutions
to keep up with ever-changing business demands in
areas like production and supply chain management," said Chris Kozup,
SVP of Global Marketing at Nutanix. "A hybrid cloud infrastructure gives
manufacturers a fresh approach to modernizing legacy applications and
services, enabling manufacturing IT leaders to focus on their long-term
investments in big data, IoT, and next-generation enterprise
applications. While the manufacturing industry is still facing obstacles
in transitioning to multi-cloud use, this study shows us that
manufacturing organizations are ready to accelerate growth and take the
lead in IT innovation in the future."

To create this report, Nutanix commissioned Vanson Bourne to survey more
than 2,300 IT decision makers, including 337 worldwide manufacturing and
production organizations, about where they are running their business
applications today, where they plan to run them in the future, what
their cloud challenges are and how their cloud initiatives stack up
against other IT projects and priorities. The survey included
respondents from multiple industries, business sizes and geographies in
the Americas; Europe, the Middle East, Africa (EMEA); and Asia-Pacific
and Japan (APJ) regions.

To learn more about the global report and findings, please download the
"Nutanix Enterprise Cloud Index 2018," here.

1 IDC FutureScape: Worldwide Operations Technology 2018
Predictions, doc #US42126317, October 2017

About Nutanix

Nutanix is a global leader in cloud software and hyperconverged
infrastructure solutions, making infrastructure invisible so that IT can
focus on the applications and services that power their business.
Companies around the world use Nutanix Enterprise Cloud OS software to
bring one-click application management and mobility across public,
private and distributed edge clouds so they can run any application at
any scale with a dramatically lower total cost of ownership. The result
is organizations that can rapidly deliver a high-performance IT
environment on demand, giving application owners a true cloud-like
experience. Learn more at www.nutanix.com
or follow us on Twitter @nutanix.

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