Manufacturing cloud computing implementation rates vary across industries

Manufacturers are historically slow to adopt new business technologies, but some are embracing cloud computing implementation more than others.

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Of all the game-changing technologies to hit manufacturers in recent years -- namely cloud, mobile and social media -- cloud computing poses perhaps the largest cultural change. Manufacturers need to feel confident that their data is secure in the great digital beyond, yet still easily accessible to their own IT departments. With the debate about public cloud versus private cloud still raging, some companies have taken the leap into...

manufacturing cloud computing implementation, while many others are still hesitating at the starting line, experts say.

"Manufacturing is still in the earlier stages of cloud adoption. We are seeing significant advancements with manufacturers investing in cloud, but cloud computing certainly isn't mainstream yet for manufacturers," said Kimberly Knickle, practice director at IDC Manufacturing Insights in Framingham, Mass. "There are a lot of decisions to make [before a cloud computing implementation] -- some are technical, some are strategic."

Differences among industries in cloud computing implementation

In the private versus public cloud wars, manufacturers still overwhelmingly choose private, according to Knickle. She points to a July 2012 IDC report she co-authored with Gard Little that's titled: "Best Practices: Adoption and Professional Services Trends for Cloud Computing in Manufacturing."

IDC polled 400 participants across 16 industries, with roughly 20% of those coming from manufacturing. When asked, "How would you categorize your company's strategy for using cloud services?" about 42% of the manufacturers said they would use private cloud only, while 15% would use public only. Forty-five percent planned to use some combination of public and private cloud.

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Adoption rates also differed when it came to the three types of cloud computing: Software as a Service (SaaS), Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). Of the manufacturers that were using some form of cloud already, the majority -- about 47% -- had deployed SaaS, compared to 35% for IaaS and 23% for PaaS.

Numbers from a newer, not-yet-released IDC report further break down manufacturing cloud computing implementation rates by industry and reveal that not all types of manufacturers are on the same page, Knickle said. In the chemical industry, 15% to 20% of manufacturers were interested in cloud. Consumer products manufacturers were a little higher at 25% to 30%, while aerospace and defense, metals and automotive were all too low to draw solid conclusions, she said.

"Consumer products and chemical manufacturers in general seem more interested in cloud. If I were to guess where they'd be using it, it would be for internal needs [for lowering IT costs], but also in the complex supply chain that exists for consumer products manufacturing," Knickle said. "Automotive is saying that they're interested in cloud, but most are more in the research and evaluation stage right now," she said. "High tech manufacturers are also making progress."

Chris Wolf, research vice president at Stamford, Conn.-based Gartner Inc., has noticed the most new cloud activity in the automotive industry, though he agrees many are still in the learning stages. "I have seen the automobile industry making moves in private cloud and trying to be smarter about optimizing delivery of IT resources," he said. "They're trying to further automate their data centers, taking what they had and adding more workforce optimization around that to pool resources and increase efficiency."

The future of manufacturing cloud computing implementation

What will it take to encourage more manufacturers to take the cloud computing leap of faith? A generational shift might be necessary, according to Liz Garnand, principal at Newport Consulting Group, based in Clarkston, Mich. "I think [low cloud-computing adoption rates] are because of the age group of the decision makers. A lot of them are people doing the same job their entire lives, and they tend to be pretty conservative," she said. "Larger manufacturers also may be involved in large-scale ERP deployments that take forever. They've already taken on such a long-term project that changing course to the cloud seems like too much."

The huge amount of cloud options available from SaaS, IaaS and PaaS vendors could be overwhelming to manufacturers that are just starting to examine these technologies, Garnard said. "There are so many choices out there now," she said. "There are so many layers and services, how do you navigate that? I think the best marketing, not necessarily the best technology, will win. Unless they are seeing it will cut costs and allow outsourcing, manufacturers aren't going to be looking at cloud."

As more manufacturers loosen the reins on their IT budgets, more will start investing in cloud projects, Wolf predicts. "Cloud has allowed more people in manufacturing verticals to be adventurous. It leverages shared infrastructure and maximizes resources, so manufacturers don't have to go out and buy that entire infrastructure themselves; that frees them up to take more chances," he said. "With more cloud projects being greenlighted, I think manufacturers can become more innovative."

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