CXO Research: Legacy technology & lack of skills hindering digital transformation and IT modernization

As organizations look to transform their business operations and revolutionize customer service, Digital Transformation (DX) is at the top of most CXOs’ agendas; in fact, DX spending is expected to approach USD 7.4 trillion between 2020 and 2023, a CAGR of 17.5 percent. However, according to the latest industry data released today from Veeam Software, the leader in Backup solutions that deliver Cloud Data Management, almost half of global organizations are being hindered in their DX journeys due to unreliable, legacy technologies with 44 percent citing lack of IT skills or expertise as another barrier to success.

Moreover, almost every company admitted to experiencing downtime, with 1 out of every 10 servers having unexpected outages each year — problems that last for hours and cost hundreds of thousands of dollars – and this points to an urgent need to modernize data protection and focus on business continuity to enable DX.

The Veeam 2020 Data Protection Trends Report surveyed more than 1,500 respondents globally (193 respondents with influence over Czech Republic, Hungary, Poland, Romania and Russia) to understand their approach toward data protection and management today, and how they expect to be prepared for the IT challenges they face, including reacting to demand changes and interruptions in service, as well as more aspirational goals of IT modernization and DX.

“Digital innovation is reshaping industries by disrupting existing business and operating models now more than ever. Data is a key element for every digital business and modern data protection must be more intelligent and able to anticipate needs and meet demands. Veeam has successfully become the global leader in Cloud Data Management and can support businesses of all sizes to accelerate their growth and Digital Transformation by ensuring the availability and protection of critical data,” said Andrei Romanescu, Managing Director Veeam Software Romania.

The Criticality of Data Protection and Availability

Respondents stated that data delivered through IT has become the heart and soul of most organizations, so it should not be a surprise how important “data protection” has become within IT teams, including not just backing up and restoring data, but also extending business capabilities. However, many organizations (40 percent) still rely on legacy systems to protect their data without fully appreciating the negative impact this can have on their business. The vast majority (95 percent) of organizations suffer unexpected outages and on average, an outage lasts 117 minutes (almost two hours).

Putting this into context, organizations consider 51 percent of their data as ‘High Priority’ versus ‘Normal’. An hour of downtime from a High Priority application is estimated to cost USD67,651, while this number is USD 61,642 for a Normal application. With such a balance between High Priority and Normal in percentages and impact costs, it’s clear that “all data matters” and that downtime is intolerable anywhere within today’s environments.

“Data protection is more important than ever now to help organizations continue to meet their operational IT demands while also aspiring towards DX and IT modernization. Data is now spread across data centers and clouds through file shares, shared storage, and even SaaS-based platforms. Legacy tools designed to back up on-premises file shares and applications cannot succeed in the hybrid/multi-cloud world and are costing companies time and resources while also putting their data at risk,” added Allan.

DX and the Cloud

Enterprises know they must continue to make progress with their IT modernization and DX initiatives in order to meet new industry challenges, and according to this report’s feedback, the most defining aspects of a modern data protection strategy all hinge upon utilization of various cloud-based capabilities: Organizations’ ability to do disaster recovery (DR) via a cloud service (54 percent), the ability to move workloads from on-premises to cloud follows (50 percent), and the ability to move workloads from one cloud to another (48 percent). Half of businesses recognize that cloud has a pivotal part to play in today’s data protection strategy; and it will most likely become even more important in the future. For a truly modernized data protection plan, a company needs a comprehensive solution that supports cloud, virtual and physical data management for any application and any data across any cloud.

“By already starting to modernize their infrastructures in 2020, organizations expect to continue their DX journey and increase their cloud use. Legacy solutions were intended to protect data in physical datacenters in the past, but they’re so outdated and complex that they cost more money, time, resources and trouble than realized. Modern protection, such as Veeam’s Cloud Data Management solutions, go far beyond backup. Cloud Data Management provides a simple, flexible and reliable solution that saves costs and resources so they can be repurposed for future development. Data protection can no longer be tied to on-premises, physically-dedicated environments and companies must have flexible licensing options to easily move to a hybrid/multi cloud environment,” concluded Allan.

Other highlights of the Veeam 2020 Data Protection Trends Report include:

The No. 1 challenge that will impact global organizations within the next 12 months is cyber threats (32 percent). Whereas the biggest challenge that will affect Eastern European organizations over the next 12 months is economic uncertainty (29 percent), followed by regulatory implementation (26 percent) and a shortage of skills to implement technology (26 percent).
Lack of budget for new initiatives (30 percent) was cited as the most impactful data protection challenge Russian and Eastern European organizations currently have. Lack of staff to work on new initiatives (27 percent) and lack of visibility on operational performance (18 percent) were also cited.
Three in five (60 percent) Eastern European organizations (including Romania) have an “availability gap” between how fast they can recover applications versus how fast they need to recover them. This is significantly lower than the global average of 73 percent.
Almost half (44 percent) of Eastern European respondents said lack of IT staff skills or expertise is preventing or has prevented their organization to move forward with Digital Transformation. This is the same as the global average.
Other barriers to Digital Transformation cited by organizations include dependency on legacy systems (35 percent); lack of buy-in from senior management (31 percent); limited budgets (27 percent); and lack of time (24 percent).
On average, over a quarter (27 percent) of Eastern European organizations’ data is backed up to the cloud via a Backup as a Service (BaaS) provider. This is the same as the global average.
On average, 14 percent of Eastern European organizations’ data is not backed up. This is the same as the global average.
Over two in five (41 percent) Eastern European organizations plan to leverage cloud-based backup managed by a BaaS provider within the next two years. This is slightly lower than the global average of 43 percent.