More Agile and Resilient: Cloud Native Market Taking Off in Germany

Cloud native technology is in high demand: 22 percent of companies using the cloud or planning to use it in Germany have already put cloud native approaches into play. The findings of a joint survey recently presented by ISG and EuroCloud Native (ECN) also reveal how SMEs are making their business models and IT systems more agile and resilient via the public cloud.

Supply networks grinding to a halt, raw materials becoming scarce, production lines coming to a standstill – people and companies have learned over the past 18 months how quickly a pandemic can change the world. The factor that put globally interconnected value creation networks to the test was above all a trial of their own digital resilience. For IT systems to be better able to cope with unpredictable circumstances, the public cloud offers a solution. “Cloud native applications make IT landscapes more resilient,” says Igor Lankin, Head of Cloud Development at inovex in dotmagazine.

Flexible and scalable value creation via the cloud

Cloud native technologies allow scalable applications to be developed and run on a cloud infrastructure. Tools such as containers, service meshes and microservices not only come into their own when developers use them to make companies more resilient; those who are also seeking to flexibly create value via cloud computing opt for cloud native software.

These are benefits which are really catching on with German company leaders – as shown by the results of a survey conducted in September 2021 among 200 German IT decision-makers from SMEs. The survey was undertaken by the market research and consulting company Information Services Group (ISG) together with EuroCloud Native (ECN), the cloud native initiative of the industry association EuroCloud Deutschland. Twenty-two percent of the respondents report in the ISG Pulse Check that their companies are already working with cloud native approaches, while 27 percent are planning to start in the next twelve months. Another 23 percent report concrete plans, without naming the precise time of entry. The cloud native market is taking off in Germany.

Cloud native users in a somewhat preliminary implementation phase

“The survey results show that interest in cloud native solutions is now also widely present across the whole of Germany. Only 3 percent of the respondents say that the topic is not currently on their agenda,” emphasizes the study leader Heiko Henkes, Director at ISG Research. But aside from this positive anticipation, what is also clear is that most users are in a somewhat preliminary implementation phase. As a result, in many cases the diverse development possibilities offered by cloud native are only partially recognized. A point which highlights this: When asked why they are dealing with the technology, 48 percent give the improvement of IT security as an answer. This puts a topic at the top of the list that, strictly speaking, is only an indirect advantage of cloud native solutions. The actual added values for software engineering – such as shorter development cycles for software (23 percent), more stable systems (40 percent), or automatic scaling (9 percent) – are currently only mentioned in second or lower place.

But aside from this positive anticipation, what is also clear is that most users are in a somewhat preliminary implementation phase. As a result, in many cases the diverse development possibilities offered by cloud native are only partially recognized. A point which highlights this: When asked why they are dealing with the technology, 48 percent give the improvement of IT security as an answer. This puts a topic at the top of the list that, strictly speaking, is only an indirect advantage of cloud native solutions. The actual added values for software engineering – such as shorter development cycles for software (23 percent), more stable systems (40 percent), or automatic scaling (9 percent) – are currently only mentioned in second or lower place.

Shortage of skilled workers slowing down cloud native adoption

“The majority of companies are well aware of this limited view of the topic,” observes Felix Höger, Board Member at EuroCloud Deutschland. “But in view of the growing shortage of skilled workers, responsible personnel are compelled to direct their focus on precisely those requirements that are currently most pressing for the business. IT security is unequivocally one of these factors.” The fact that a deficit of qualified personnel is one of the most important restrictions for cloud programmes is also confirmed by the survey results. With affirmation from 37 percent of respondents, this point clearly tops the list of obstacles to implementation.

The extent to which the shortage of skilled workers is currently slowing down cloud native adoption can also be discerned from the intensity of the establishment of cloud native procedures in application development. Here, the majority of companies are opting for a policy of small steps. For instance, 44 percent of the respondents state that they will initially only concentrate on smaller application adaptations carried out in the form of refactoring projects. Significantly fewer, i.e. 27 percent of the respondents, also implement cloud native projects through rewriting.

Market opportunities for specialist service providers

“The fact that, until now, most cloud native users have only dealt with parts of the concept opens up great market opportunities, especially for specialist cloud native service providers. One example here relates to communicating the whole range of advantages that can be gained compared to classic software engineering,” says Dr Nils Kaufmann, Head of EuroCloud Native.

The extent of trust presently placed in specialist service providers in the cloud native environment is evident in the answers to the question of what criteria companies use to select their service providers in this field. For 57 percent of the respondents, it is an important criterion, while for another 28 percent, it is even considered to be very important to work with specialist cloud native providers. Regardless of this, specialization must not lead users into provider lock-ins. From this perspective, when it came to a further relevant selection criterion, 83 percent of the respondents specified their wish for service providers to be familiar with as broad a spectrum of cloud platforms as possible in order to ensure the set-up, operation and further development of multi-cloud solutions.

Providers combine business know-how with cloud native expertise

Those who combine business know-how with cloud native expertise not only make IT systems more resilient, but also their entire business model more agile. Eight member companies of the ECN accompanied the study project and contributed their know-how to the design of the study: Alice&Bob.Company, CLOUDETEER, Cloudwürdig, Deepshore, GECKO (a member of the release42 Gruppe), globaldatanet, Kubermatic and tecRacer Consulting.

The study “ISG Pulse Check – Status Quo of the Cloud Native Market in Germany” can be downloaded free of charge from the landing page (both the study and the landing page are in the German language): www.eurocloudnative.de/isgpulsecheck