The ‘Cloud Monitor 2024’ study in Germany, conducted by KPMG, reveals that cloud computing has become nearly ubiquitous among businesses, with 98% indicating active use. The success of artificial intelligence is increasingly integrated into the cloud, as demonstrated by 97% of cloud-enabled businesses sourcing AI solutions from cloud providers.

The KPMG study emphasizes that companies are not only leveraging cloud infrastructure to enhance AI capabilities but are also adopting hybrid cloud models—55% are using a combination of public and private clouds—to improve flexibility, security, and control. Cloud strategies have become central to strengthening IT security and advancing digital transformation, with nearly half of organizations prioritizing these goals through their cloud initiatives.

For many companies, this transition supports essential objectives such as improving IT security and optimizing internal processes, with nearly half of respondents reporting that cloud strategies play a crucial role in their digital transformation efforts.

The uptake of artificial intelligence (AI) is another noteworthy trend highlighted in the report, with 97% of cloud-enabled enterprises obtaining their AI solutions directly from cloud providers. This trend underscores the significance of cloud-based AI in contemporary business frameworks, as organizations increasingly rely on cloud services for scalable AI functionalities. In contrast, only 26% of companies are still utilizing traditional data centers for their AI requirements, indicating a gradual move away from on-premises data centers for these advanced operations.

Cloud-Only vs Cloud-First Strategies

KPMG’s report is derived from insights gathered from over 500 German businesses, each employing at least 50 people, providing a glimpse into the cloud trends presently shaping the German business sector. The report highlights that only a small fraction of companies remain devoid of cloud solutions, illustrating that cloud adoption has become a standard expectation across various industries. The hybrid cloud model, which is preferred by many, enables businesses to optimize resource allocation while maintaining control over sensitive data, all while benefiting from the scalability of public cloud platforms. Furthermore, 23% of participants expressed an aspiration to transition entirely to cloud-only strategies, whereas 52% are geared towards adopting a cloud-first approach.

Cost savings and operational effectiveness continue to be primary motivators for moving to the cloud. Sixty-seven percent of respondents reported notable reductions in IT costs following cloud implementation, with many dedicating over half of their IT budgets to cloud services. This trend appears even more pronounced among large companies: 64% of organizations with more than 5,000 employees spend at least half of their IT budgets on cloud-related activities. However, the financial benefits of cloud adoption may not be universal; 21% of large businesses reported an uptick in IT costs, illustrating the challenges inherent in managing cloud expenses in expansive deployments.

In addition to financial considerations, performance, security, and compliance are critical factors affecting the selection of cloud providers. Companies underscore the significance of reliability and performance to ensure uninterrupted operations, especially as they depend on cloud platforms to manage essential applications. Security remains a top concern, with 57% of businesses concentrating on bolstering IT security via their cloud strategies. ESG (Environmental, Social, and Governance) factors are also increasingly essential in cloud decision-making, with 77% of firms ranking ESG aspects as significant, a priority that escalates to 84% among larger enterprises.

Cloud Adoption

KPMG’s findings reflect the complex nature of cloud adoption—while it presents clear benefits in terms of cost reduction and operational agility, it also presents challenges, notably for larger organizations navigating intricate cloud environments. The report concludes that firms are meticulously evaluating these aspects as they develop cloud solutions, balancing cost, security, and sustainability to achieve their organizational objectives.

As the trend towards cloud adoption expands, the focus on hybrid models, AI integration, and ESG compliance suggests an evolving landscape where businesses are not simply embracing cloud solutions but are strategically aligning these technologies with larger goals. With most organizations significantly investing in cloud technology as a vital element of their IT expenditures, cloud computing is increasingly cementing its position as a cornerstone of modern enterprise infrastructure. This trend is set to foster ongoing innovation as businesses strive for enhanced cloud performance, fortified security, and sustainable practices that address both operational and environmental aims.