Cloud remains IT investment priority for UK enterprises despite testing economic times

Investing in cloud technologies remains a top, long-term priority for the majority of enterprises across the UK and Ireland, despite the hyperscalers feeding back about customers tightening their belts in the face of ongoing economic uncertainty.

That’s according to the feedback of nearly 1,000 enterprise senior executives who participated in a study by Tata Consultancy Services (TCS) that sought to gauge how their attitudes to investing in the cloud had altered in response to the ongoing economic downturn.

Out of the 972 participants in the poll, 102 were from the UK and Ireland, and their feedback features in the TCS’s Connected future: how cloud drives business innovation report.

Its contents confirms that cloud remains a long-term investment priority for 60% of enterprises in the UK and Ireland, with 63% citing the need to innovate as being a major factor in their use of the technology.

Specifically, it appears that investing in cloud is seen as laying the bedrock for enterprises to experiment and start innovating with artificial intelligence (AI) and machine learning technologies, with 74% of respondents from the UK and Ireland stating they have invested in this over the past two years. Furthermore, 78% said they plan to invest in this area over the coming 12-24 months.

Meanwhile, more than half of respondents (56%) from the UK and Ireland said they had started using cloud to bolster employee engagement and productivity by enabling new ways of working.

The TCS report also revealed that there is an environmental motivation behind the use of cloud for many of the UK and Ireland respondents.  

“The study finds a clear majority of respondents (75%) in the UK and Ireland are using cloud technologies to achieve their sustainability goals, [and] this is higher than the global average of 67%,” TCS said in a statement.

That said, nearly half (48%) said they had encountered difficulties when trying to understand the carbon footprints of the cloud providers, which suggests the hyperscalers have more work to do on this front.

“This [also] suggests that while most respondents see cloud as an important – and thus far successful – part of their sustainability strategy and increasingly use cloud tools to assess their own carbon impact, they are now demanding the same visibility from their cloud providers.” 

Venu Gudimetla, head of cloud business for UK and Ireland at TCS, said it is interesting to see that, despite the challenging economic climate, businesses are continuing to prioritise cloud investments because they know how important they are to enable innovation further down the road.

“The UK and Ireland are already making progress when it comes to industry-specific cloud deployments and achieving their sustainability goals,” Gudimetla added. “We expect to see an acceleration of innovation, as more businesses start to leverage cloud technologies for long-term growth and profitability.”

Krishnan Ramanujam, president for the enterprise growth group at TCS, said while enterprises initially moved to cloud for cost-cutting, resiliency and scaling reasons, their motivations for doing so now are broadening.

“A desire for greater efficiency, resilience, and flexibility drove early cloud adoption, and these remain critical factors. Businesses now more fully understand how cloud drives business growth and innovation for the long-term, and for most, the journey is only just getting started,” said Ramanujam.

“Cloud is a frequent source of short-term return on investment anxieties, but growth and transformation is a long game. Reconciling these two realities is a challenge and a necessity, but fully achievable with the right strategy and planning.”

Ramanujam added: “This is critical because cloud is now the unifying digital fabric of every enterprise, fuelling powerful technologies – from generative AI to edge and quantum computing – and is ushering the next wave of innovations now and into the future.”