Asia/Pacific Public Cloud Spending in Manufacturing to Reach $26.3B by 2021

Article By : IDC

IDC reveals that 53% of the manufacturing organizations have chosen public, cloud–first as their primary strategy for migrating manufacturing applications...

IDC Manufacturing Insights Asia/Pacific’s latest report, How Do Manufacturers View the Public Cloud Migration Strategy?, reveals that 53% of the manufacturing organizations have chosen public, cloud–first as their primary strategy – emphasizing the popularity of open cloud–based platform models for migrating manufacturing applications. With the push from independent software vendors, cloud-based operational models will continue to see an uptick especially in the micro, small, and medium-sized enterprise (MSME) sector.

Traditional IT vendors and services players that are significantly driven by verticals (e.g. manufacturing, travel and hospitality, retail and supply chain) have been looking to extend services and allow relaxations in terms of license and subscription renewals. The understanding is that several vendors have already provided payment deferment options while investing in the formation of new ecosystem partnerships. On-premises applications or private cloud options are quite expensive and offset the risk and maintenance onto the user, which can then have a multiplier effect on the associated expenses.

“The pandemic has further increased the shift toward flexible, subscription-based models. These models can provide the required agility to react to rapidly changing business environments through enhanced collaboration and coordination,” says Sampath Kumar Venkataswamy, Research Manager at IDC Manufacturing Insights Asia/Pacific.

Meanwhile, IT vendors with strong consulting capabilities engage with their clients as trusted partners – helping them navigate the crisis. The demand for collaborative applications, security solutions, and cloud-based and AI-driven applications is expected to increase as enterprises start considering innovative ways to service their clients and engage with their partner ecosystem during and after the crisis.

The growth of SaaS applications will help bolster the development of application programming interfaces (APIs), which can be slotted to create custom interactive modules – allowing improved cross-functional collaborations, faster identification of root causes in typical failure mode and effects analysis, and enabling AI/ML routines that match process needs at various functional levels.

“As manufacturers increase the scope of their application base for deployment, it is highly important that the supporting and peripheral applications also maintain their connectivity with the host applications,” adds Venkataswamy. The manufacturing sector tends to dominate the hybrid cloud adoption segment due to the need for continuous access to critical and core applications to stay operational and reduce unscheduled stoppages. There are several instances where organizations tend to retain core applications such as on-premises manufacturing execution systems (MES) – which would ensure operational resilience amidst network outages and latency.

From an industry perspective, process manufacturers or capital-intensive sectors are heavily invested in remote and centralized monitoring solutions. In contrast, discrete manufacturers focus on cloud-based supply chain application because of relatively higher inbound and outbound dependencies. Irrespective of the industry, companies should focus on business outcomes and how cloud could be a pivotal cog for data storage, analytics and consequently be a platform that ensures visibility across the value chain.

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