www.pwc.ru/en The fear of the Cloud PwC’s Analytical Survey October 2020 . Introduction About the survey This report is based on the data obtained during a survey of respondents from various industries in Russia. The survey included five general questions to provide an overview of the respondents and 26 special questions divided into three sections: ▪ Perception of cloud technologies. ▪ Experience using cloud technologies. ▪ Factors that hinder the adoption of cloud technologies. The survey objectives ▪ Explore what people consider to be the obstacles to the adoption of cloud technologies and potential ways to overcome the impediments. ▪ Identify the main fears different user categories have about using cloud technologies (by job position, business size and industry, degree of cloud adoption, etc.). ▪ Assess how aware market participants are of the various mechanisms available to build trust between cloud providers and users. ▪ Identify barriers to the development of cloud technologies in Russia. PwC As companies migrate to cloud infrastructure, cloud security is becoming an important priority for a growing number of organisations. While many businesses are still cautious about the cloud technologies, they do see the advantages and understand the strengths of cloud solutions. And yet many are afraid of taking the first step. They might be right to some extent — the cloud may not be the best solution for every business. It depends on a set of conditions and circumstances. However, if implemented properly, used smartly, and adopted in accordance with the correct cloud security principles, cloud technologies will help to drive and improve business performance. We are delighted to present our new comprehensive survey that we describe the attitude of Russian companies towards cloud technologies and explore the main factors that hinder their adoption. Our survey focuses on an important phenomenon—the fear of the cloud—and its root causes. I hope you enjoy reading it. Vitaly Sokolov Partner, Cybersecurity and BCM Leader PwC Russia 3 Respondent profile Seniority level of respondents The respondents were evenly spread in terms of seniority level. C-level, middle management, and specialists accounted for 29%, 39%, and 32% of the respondents respectively. Management 39% Specialist 32% C-level 29% What is your line of work? From a functional perspective, people from IT departments dominated, making up around 52% of total respondents, while cybersecurity, sales and marketing, accounting, and finance were also well represented. Other* Sales 21% 9% Information Cybersecurity technology 18% 52% Other* Accounting and Finance, 4%; Internal Audit, 1%; Engineering, 1%; Cybersecurity and Security Operations, 2%; Logistics, 1%; Marketing, 3%; HR, 3%; Product Management, 5%; Legal, 1%. 4 Number of employees The survey participants were primarily from large organisations with more than 1,000 employees (54%), but there were significant amount of participants from small and medium-sized organisations (28% and 18% of respondents respectively). 100-999 people 18% Less than 100 people 28% 1,000 or more people 54% What is your main business area? For the survey, we received information from respondents representing a variety of industries. Other* Telecommunications 37% 8% Information technology, software and Financial services Internet 46% 9% Other* Automotive, 1%; State and Municipal Management, 1%; Extraction and Transportation of Minerals, 5%; Healthcare, Pharmaceuticals and Biotechnology, 1%; Media and Entertainment, 3%; Real Estate and Construction, 2%; Education and Research, 1%; Wholesale and Distribution, 4%; Consumer Services, 3%; Manufacturing, 2%; Professional Services, 3%; Retail, 5%; Cybersecurity Systems, 1%; Insurance, 1%; Transport and Logistics, 4%. 5 The survey findings PwC Perceptions of the cloud technologies Stages of cloud adoption Currently, most organisations are active users of the cloud technologies, with 66% being either leaders or followers in the cloud adoption. Off-track Leaders 7% 33% Observers 13% Novices Followers 14% 33% Description of the stages ▪ Off-track: Do not use or do not plan to use cloud technology. ▪ Observers: Have developed a cloud technology strategy, but do not use the technology. ▪ Novices: Are implementing or have implemented cloud technologies and used them in at least one project. ▪ Followers: Use cloud technologies to support one or more processes or systems and plan to scale up cloud technologies. ▪ Leaders: Use cloud technology for a significant part of their IT infrastructure and processes. What type of the cloud technologies are you using or going to use? Most respondents are using or going to use hybrid or private clouds (30% and 29% respectively). This solution reflects the overall maturity level of the Russian cloud market and is in the line with Russian compliance requirements (the Federal Law on Personal Identifiable Information). No plans to use Hybrid 7% cloud Multi-cloud 30% 17% Private Public cloud cloud 17% 29% Cloud types: Public cloud refers to the infrastructure that is possible for public use. A public cloud can be owned, controlled, and operated by commercial, scientific or governmental organisations (or a combination of them). A public cloud exists physically in the jurisdiction of the owner/service provider (e.g. Azure, Amazon Web Services, Yandex.Cloud). Private cloud means infrastructure intended for one organisation with several consumers (e.g. divisions of a company). It can also be accessed by clients and contractors of the organisation. A private cloud can be owned, controlled and operated by the organisation or by a third party (or a combination). It can physically be located inside or outside of the owner’s jurisdiction. Hybrid cloud means a combination of two or more various cloud infrastructures (private or public) that remain unique but interrelated through standardised or private app and data transfer technologies (e.g. short-term use of public cloud resources for load balancing between clouds). Multi-cloud strategy means utilisation of several cloud providers in a single heterogeneous architecture. In a typical multi-cloud architecture that uses two or more public clouds, as well as several private clouds, the multi- cloud environment is designed to eliminate dependence on a single cloud provider. How long have you been using cloud technologies at your company? Given the overall maturity of IT technologies in Russia, companies, not surprisingly, started to use cloud solutions almost as soon as they emerged (30% of organisations have been using cloud technologies for more than five years). One year or less From 1 to 3 years 7% 36% From 3 to 5 More than 5 years years 28% 29% What service provision model are you mainly using or going to use?* Russian companies mostly use / plan to use cloud as SaaS. Do not plan to use SaaS 8% 33% PaaS IaaS 28% 31% Service provision models* IaaS: infrastructure as a service PaaS: platform as a service SaaS: software as a service 9 In your opinion, how do cloud technologies create value? The survey shows that most organisations see the following value of a cloud adoption: ▪ Scalability as required (74%) ▪ Cost optimisation (67%) ▪ Access to locally unavailable technologies (48%) Не дает преимуществNo value TimeСокращение-to-market Time reduction-to-Market Масштабируемость Scalabilityпо мере необходимости as required Reliability improvement Увеличение надежности Performance enhancement Повышение производительности Access to locally unavailable Доступ к недоступным локальноtechnologies технологиям ОптимизацияCost optimisation затрат 0% 10% 20% 30% 40% 50% 60% 70% 80% Which cloud providers do you know? A majority of respondents knows global market leaders (Big Three: Amazon, Microsoft, Google) and are quite familiar with local public cloud providers (Yandex.Cloud, Mail.ru) 45 40 35 30 25 20 15 10 5 0 Amazon Google Mail.ru SberCloud Rostelecom IBM % Microsoft Yandex Oracle MTS DataLine Salesforce What are the most critical factors that influence the selection of a cloud provider? Functional and technological requirements are the most critical in selecting a cloud provider, with security and compliance taking a back seat: 41%: Reliable communication channels, modern DDoS mitigation features 38%: Data centres in Russia 34%: Low cost, transparent and flexible licensing Low cost, transparentНизкая цена, and понятное flexible licensingи гибкое ценообразование OpportunityНаличие to периода take services тестовой for the эксплуатации trial period Возможность безболезненной миграции из Seamlessоблака migration провайдера between к другому cloud поставщику providers or или to на свою площадкуan in-house platform Широкий спектрA wide предоставляемых range of the cloud сервисов services Наличие в договоре на предоставление услуг A serviceпункта agreement о четком разделении that clearly сферsegregates responsibilitiesответственности of the заказчика provider иand поставщика, the client, a coherentпонятного SLA SLA and и штрафныхpenalties for санкций SLA breaches за его неисполнение Reliable communicationsНаличие надежных channels, каналов modern связи, DDoS современных средств защитыmitigation от DDoS features-атак НаличиеPartner партнерскихstatus with the статусов leading провайдера software and у ведущих поставщиковhardware аппаратных providers и программных средств CertificatesНаличие ofсертификатов compliance withсоответствия international требованиям международныхstandards стандартов and laws и законодательства CertificatesНаличие of compliance