Upsurge In Remote Operations Increases Firms’ Preference For Cloud-Based Asset Management Software Deployments

Upsurge In Remote Operations Increases Firms’ Preference For Cloud-Based Asset Management Software Deployments

As planned, end of January witnessed multiple operational excellence software providers releasing their much-anticipated financial results for the last quarter of the tumultuous 2020. While most firms reasonably underperformed compared to the predictions set pre-COVID-19, the picture is not all bleak; revenues from cloud-based solutions showed positive growth. For instance, SAP and IBM, two industrial software giants, saw their cloud revenues grow by 17% and 19% (YoY), respectively, despite a dip of 1% and 5% (YoY) in their corresponding total revenues.

Over the last three years, Verdantix has been conducting annual global corporate surveys, asking about 250 senior executives in operations, maintenance, process safety and engineering roles about their firms’ budgets, priorities and technology preferences for asset and risk management initiatives. Among others, the interviewees were asked to evaluate if cloud and ‘on-premises’ deployments are important when evaluating software products for asset reliability, safety, and risk management. The figure below displays the ratio of the respondents considering cloud deployment as important over those considering ‘on-premises’ deployment as important for 2018, 2019 and 2020.

In 2018, this preference ratio was less than one across the globe and across 14 industrial sectors, indicating that customers preferred ‘on-premises’ deployments over cloud solutions. In 2020, the scale shifted completely in the other direction, as about 20% more customers considered cloud deployments important compared to ‘on-premises’ deployments. During the coronavirus pandemic, oil and gas and utilities industries showed the highest growths in cloud preference, with their respective ratios increasing by approximately 30% between 2019 and 2020.

The COVID-19 pandemic has undeniably accelerated the digitization journeys of industrial firms, but has also understandably sparked an upsurge in demand for cloud solutions due to the rise in remote operations at industrial facilities. Firms are seeking software cloud deployments for digital agility and resilience as well as for the ability to configure, provision and design the solution they need, when and where they need it. More and more software suppliers are exploiting this market opportunity by developing their cloud solutions portfolio and collaborating with cloud computing services. In late 2020, AVEVA and Bentley Systems expanded their partnerships with Microsoft – aimed at further using Azure as the foundation of their cloud services.

If you are interested to hear more about the budgets, priorities and technology preferences of over 250 operations executives in industrial firms, please register for the upcoming Verdantix webinar: Operational Excellence In 2021: Budgets, Priorities & Tech Preferences.