The State Of Cloud Adoption And Connectivity In The Nordics

This article is authored by Megaport’s Chief Marketing Officer, Eric Troyer, and originally published on Data Economy.

Across most of the world, there are very few organisations that haven’t started a cloud journey in some capacity. Whether it’s migrating their entire core infrastructure over to multiple Cloud Service Providers, or just simplifying a handful of processes using simple SaaS tools, cloud represents both the present and the digital future for virtually everyone.

At Megaport, we’ve been fortunate enough to have a front-row seat to many of these journeys. We’ve learned a lot from observing how our customers’ cloud adoption has evolved. But what’s been extremely interesting to see is just how similar many companies’ journeys have been.

Generally speaking, companies have tested the water using SaaS solutions, enabled specific projects in IaaS and PaaS environments, and then widely adopted broader cloud offerings from the major CSPs, before eventually moving towards a multicloud model – all at a similar pace.

However, the one thing more intriguing than the trend itself are the outliers. Not every region has moved at the same pace. Most notable among these geographies are the Nordics – a region we tend to think of as broadly being on the bleeding edge of technology adoption.

We wanted to find out exactly why this was. So, in partnership with IDC, we recently published an executive brief summarising the results of a new survey which explores the state of cloud and multicloud adoption in Nordic countries.

It gave us excellent insights into where Nordic organisations sit on IDC’s cloud maturity scale, and how much the analyst expects cloud adoption to advance and change over the next few years. Here’s an overview of what we’ve discovered.

Beyond cloud adoption into multicloud environments

Cloud adoption has been slow to gather momentum in the Nordic region relative to other technology hubs. This has mostly been down to well-optimised on-premises infrastructures allowing organisations to operate effectively without making the transition. Many businesses simply weren’t dealing with the performance and productivity issues being faced by organisations with older or poorly optimised systems, meaning they simply didn’t have to move to the cloud.

However, prompted by cost and innovation drivers, many have now finally taken that step, and IDC is predicting that 51% of Nordic organisations will reach the analyst’s highest level of cloud maturity by 2021. When a business reaches this stage – which IDC describes as ‘optimised’ – it will have a fully operational and proactively managed cloud strategy that’s making an observable impact on its performance.

With initial cloud adoptions complete and reaching maturity, the natural next step for many will be exploring multicloud strategies – a shift that the IDC survey results also indicate.

The survey showed that 85% of Nordic organisations currently use more than one SaaS solution, while 70% are using multiple IaaS solutions. As organisations continue to diversify their cloud portfolio, using multiple service providers will become the new norm. Many will want to introduce solutions from different vendors to create the right mix of technical capabilities – and that raises questions around the flexibility of their networks and connectivity.

(You can read more about adoption rates for different kinds of cloud services in the full brief.)

Traditional connectivity won’t keep up

Network strategies are a crucial component of enabling robust, reliable connectivity between different services and vendors – and they can be overlooked in digital transformation plans.

Around 40% of the organisations surveyed have already defined or considered a network strategy – but that still leaves well over half of Nordic businesses that have yet to think about how connectivity factors into their overall digital strategy.

Connecting to cloud services via traditional point-to-point circuits is protracted and cumbersome and internet connections do not offer secure, predictable performance. All of these methods add major management burden when organisations bring in multiple cloud vendors. If IT functions want to be able to pick and choose individual solutions from different providers, they’ll need to do a lot of management work internally to ensure everything’s working together, and likely have to invest a lot of additional capital for the privilege.

Further complicating the issue, internet connectivity – currently, the most popular way to connect to cloud services among Nordic organisations – simply won’t provide the security and latency profile to support the high-performance levels many applications require.

To limit issues like inconsistent internet routing, and seamlessly combine services from different providers, organisations should consider dedicated software-defined networking solutions instead. That way, they can bring in as many individual solutions and services as they like without worrying about the extra coordination work that could involve.

Agile connectivity solutions are the key to a multicloud future

As Nordic IT leaders define their network strategies and reach higher stages of cloud maturity, agile, vendor-agnostic connectivity will be the key to enabling the same success they saw with their on-premises infrastructures in previous years.

In my work with Megaport, I’ve seen how important it is to carefully consider how connectivity factors into a multi-vendor cloud environment. So, although Nordic organisations are making major, effective strides in their cloud maturity, it’s vital that they don’t neglect the supporting services that bring their multicloud vision together. Getting today’s digital and cloud enabled IT supply chain directly connected is critical to ensuring performance, security, scalability – and ultimately – success.

You can explore the survey results in more detail and get the full picture of the state of cloud adoption in the Nordics by reading the full IDC executive brief here.