Asia Pacific Companies Most Worried About Data Privacy in the Cloud

Hybrid Clouds Popular Among Cloud Computing Adopters

• Ambitious regional cloud plans may be slowed by perceived risks
• On-demand storage and networking perceived as chief cloud functions
• Data privacy/residency is the main barrier to cloud computing adoption
• Enterprises opting for hybrid cloud model

SINGAPORE – November 9, 2011 — VMware, Inc. (NYSE: VMW), the global leader in virtualization and cloud infrastructure, today announced the results of Cloud Computing in Asia Pacific: The Annual Cloud Maturity Index, a study conducted in October 2011 by Forrester Consulting on behalf of VMware. According to the Index, data privacy is now the main obstacle to cloud adoption among organisations, with 74 percent of respondents citing it as a concern, ahead last year’s top mention of security. The twin problems of data residency and loss of control were top of mind in Australia, Singapore and Malaysia.

The survey also indicated that integration with existing systems remained high on the list of barriers to cloud adoption, with 68% expressing significant concerns. Other key concerns included lack of interoperability across clouds (57%), fear of vendor lock-in (59%) and immature cloud management features (57%). A lack of cloud knowledge and understanding is far less of a concern across the Asia Pacific and Japan (APJ) region than last year.

Andrew Dutton, SVP and GM, VMware Asia Pacific Japan, said: “Companies in Asia Pacific and Japan are clearly more confident about cloud computing today than they were a year ago. However, some obstacles still prevent them from fully benefiting from the technology. We are aware of these concerns and have cloud computing solutions in place that will help companies address such issues.”

Cloud computing’s business relevance and adoption plans at all-time high

Businesses are increasingly seeing cloud computing as relevant to their needs, especially among larger enterprises. According to the survey, which is in its second year, cloud computing adoption has continued to accelerate in the APJ region, with close to 90% of respondents viewing cloud as relevant to their business.

 The study showed that 64 percent of regional firms are either using or planning cloud initiatives compared with 59 percent a year ago .Organizations in Australia lead in cloud adoption, with 43 percent already running a cloud-related initiative. Korea and China lead the region in terms of adoption plans, with 48 percent and 46 percent of organisations, respectively, expecting to implement cloud computing in the next 18 months.

The Index has also found that across the region, the decision to adopt cloud computing lies largely with the CEO opposed to just the CIO, indicating that top management is more aware of the fact that investing in new technology can result in improvements to business efficiency and productivity. 

Based on the survey results, the most IT-savvy players, such as telecommunications and technology companies, are ahead of the pack for cloud adoption, while government and insurance companies lead in planning cloud adoption. Cloud adoption rates increase according to the size of organisations, with larger firms – especially those with more than 10,000 employees – leading in cloud adoption, at 47 percent.

Cloud associated with cost efficiency, on-demand storage and networking

Cost reduction remains the primary driver for cloud adoption for 55 percent of Asia Pacific firms, down from 57 percent in 2010. However, very large organisations viewed cloud more as a strategic investment (49 percent) than a cost-saving measure.

Reduced hardware infrastructure costs (76 percent) and simplified resource/server provisioning (75 percent) continue to be key drivers for cloud adoption, with the need for cloud management tools highest in Singapore, Malaysia and Thailand.

The Index found that 80 percent of organisations in APJ link cloud computing with on-demand storage and networking. Organisations in China (84 per cent) dominated in terms of this association, followed by Singapore and Japan (both 82 percent).

Dutton said: “As companies look to gain cost efficiencies, utility-based scalable storage and networking platforms in the cloud will be instrumental to helping them handle unexpected capacity demands and short-falls.”  

Hybrid clouds in the ascendant

While 32 percent of respondents are comfortable only with private clouds, more companies have chosen to deploy both public and private clouds (41 percent) – a slight increase over the previous year (38 percent). Public clouds were the least popular, as the majority of companies across the region viewed them as less secure when managing corporate data and applications. A preference for the private cloud was more prevalent in the banking/financial and insurance sectors.

Storage (73 percent) represents the region’s No.1 workload for private clouds, with firms in Thailand (82 percent) and China (79 percent) most likely to deploy storage in a private cloud. Servers represent the No.2 workload for private cloud deployment. Public clouds are primarily the choice for web conferencing, instant messaging and collaboration, as well as email.

“Enterprises are looking to the hybrid cloud model to provide business agility and efficiency, without compromising data sovereignty and privacy,” said Dutton. “The availability of a common cloud infrastructure platform, with a common management model and application services that bridge private and public clouds to deliver seamless data and application portability, will be critical to the success of cloud implementations.”

Virtualization continues to be seen as the foundation of cloud computing

Some 78% of organisations in the region now consider virtualization to be an essential building block for cloud computing. Virtualization adoption in Asia Pacific continues to be led by Australia (91 percent) and Japan (80 percent). Among verticals, virtualization adoption is highest in insurance (83 percent) and banking/financial services sectors (81 percent).

Desktop virtualization continued to be a consideration for 64 percent of companies, as they contemplate virtualizing their top-10 most business critical applications. Companies in Korea lead, with 88 percent indicating that desktop virtualization plans were in place, followed by China (69 percent) and Japan (68 percent). The survey also showed an increase in interest for server/data centre virtualization among Asia Pacific companies.

Dutton said: “As consumerization of IT becomes more widespread in the region, companies are realising that desktop virtualization can provide the flexibility to deliver applications and data to end-users when and wherever they need them, and regardless of access device.”

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 About the Cloud Computing in Asia Pacific: The Annual Cloud Maturity Index

The Cloud Computing in Asia Pacific: The Annual Cloud Maturity Index was compiled through interviews with 6,141 senior business and IT decision makers from eight Asia Pacific countries – Australia, China, India, Japan, Korea, Malaysia, Singapore and Thailand – involving companies from the technology, telecoms, government, manufacturing, insurance, financial services, healthcare, transport/logistics, education and retail industries. The study included small and medium sized enterprises with fewer than 100 employees and multinational corporations with more than 10,000 staff.

About VMware

VMware is the leader in virtualization and cloud infrastructure solutions that enable businesses to thrive in the Cloud Era.  Customers rely on VMware to help them transform the way they build, deliver and consume Information Technology resources in a manner that is evolutionary and based on their specific needs. With 2010 revenues of $2.9 billion, VMware has more than 300,000 customers and 25,000 partners. The company is headquartered in Silicon Valley with offices throughout the world and can be found online at www.vmware.com.  

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Forward-Looking Statements

This press release contains forward-looking statements including, among other things, expectations and customer strategies for the adoption cloud computing solutions, the expected benefits of cloud computing, the role of virtualization and the utility of VMware solutions in addressing customer concerns about cloud computing .  Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in consumer or information technology spending; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into the virtualization and cloud computing markets, and new product and marketing initiatives by our competitors; (iv) our customers’ ability to develop, and to transition to, new products and computing strategies such as cloud computing and desktop virtualization; (v) the uncertainty of customer acceptance of emerging technology; (vi) rapid technological and market changes in virtualization software and platforms for cloud and desktop computing; (vii) changes to product development timelines; (viii) our ability to attract and retain highly qualified employees; and (ix) the successful integration of acquired companies and assets into VMware. These forward looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K that we may file from time to time, which could cause actual results to vary from expectations. VMware assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.