Study finds that COVID-19 has significantly impacted Digital Transformation (DX) spending, with 40% of global organizations viewing economic uncertainty as the greatest barrier to DX in the next 12 months and one-third having slowed or halted initiatives in the past year
Data protection challenges are undermining organizations’ abilities to execute Digital Transformation (DX) initiatives globally, according to Veeam’s 2021 Data Protection Report. The study found that 58% of backups fail, leaving data unprotected. The study revealed that against the backdrop of COVID-19 and ensuing economic uncertainty, which 40% of CXOs cite as the biggest threat to their organization’s DX in the next 12 months, inadequate data protection and the challenges to business continuity posed by the pandemic are hindering organizations’ initiatives to transform.
The report surveyed more than 3,000 IT decision makers at global enterprises to understand their approaches to data protection and data management. The largest of its kind, this study examines how organizations expect to be prepared for the IT challenges they face, including reacting to demand changes and interruptions in service, global influences (such as COVID-19), and more aspirational goals of IT modernization and DX.
“Over the past 12 months, CXOs across the globe have faced a unique set of challenges around how to ensure data remains protected in a highly diverse, operational landscape,” said Danny Allan, Chief Technology Officer and Senior Vice President of Product Strategy at Veeam. “In response to the pandemic, we have seen organizations accelerate DX initiatives by years and months in order to stay in business. However, the way data is managed and protected continues to undermine them. Businesses are being held back by legacy IT and outdated data protection capabilities, as well as the time and money invested in responding to the most urgent challenges posed by COVID-19. Until these inadequacies are addressed, genuine transformation will continue to evade organizations.”
Urgent action on data protection required
Respondents stated that their data protection capabilities are unable to keep pace with the DX demands of their organization, posing a threat to business continuity, potentially leading to severe consequences for both business reputation and performance. Despite the integral role backup plays in modern data protection, 14% of all data is not backed up at all and 58% of recoveries fail, leaving businesses’ data unprotected and irretrievable in the event of an outage by cyberattack. Furthermore, unexpected outages are common, with 95% of organizations experiencing them in the last 12 months; and with one in four servers having at least one unexpected outage in the prior year, the impact of downtime and data loss is experienced all too frequently. Crucially, businesses are seeing this hit their bottom line, with more than half of CXOs saying this can lead to a loss of confidence towards their organization from customers, employees, and stakeholders.
“There are two main reasons for the lack of backup and restore success: Backups are ending with errors or are overrunning the allocated backup window, and secondly, restorations are failing to deliver their required SLAs,“ said Allan. “Simply put, if a backup fails, the data remains unprotected, which is a huge concern for businesses given that the impacts of data loss and unplanned downtime span from customer backlash to reduced corporate share prices. Further compounding this challenge is the fact that the digital threat landscape is evolving at an exponential rate. The result is an unquestionable gap between the data protection capabilities of businesses versus their DX needs. It is urgent that this shortfall is addressed given the pressure on organizations to accelerate their use of cloud-based technologies to serve customers in the digital economy.”
IT strategies impacted by COVID-19
CXOs are aware of the need to adopt a cloud-first approach and change the way IT is delivered in response to the digital acceleration brought about by COVID-19. Many have already done so, with 91% increasing their cloud services usage in the first months of the pandemic, and the majority will continue to do so, with 60% planning to add more cloud services to their IT delivery strategy. However, while businesses recognize the need to accelerate their DX journeys over the next 12 months, 40% acknowledge that economic uncertainty poses a threat to their DX initiatives.
DX starts with digital resiliency
As organizations increasingly adopt modern IT services at rapid pace, inadequate data protection capabilities and resources will lead to DX initiatives faltering, even failing. CXOs already feel the impact, with 30% admitting that their DX initiatives have slowed or halted in the past 12 months. The impediments to transformation are multi-faceted, including IT teams being too focused on maintaining operations during the pandemic (53%), a dependency on legacy IT systems (51%) and a lack of IT staff skills to implement new technology (49%). In the next 12 months, IT leaders will look to get their DX journeys back on track by finding immediate solutions to their critical data protection needs, with almost a third looking to move data protection to the cloud.
“One of the major shifts we have seen over the past 12 months is undoubtedly an increased digital divide between those who had a plan for Digital Transformation and those who were less prepared, with the former accelerating their ability to execute and the latter slowing down,” concluded Allan. “Step one to digitally transforming is being digitally resilient. Across the board organizations are urgently looking to modernize their data protection through cloud adoption. By 2023, 77% of businesses globally will be using cloud-first backup, increasing the reliability of backups, shifting cost management and freeing up IT resources to focus on DX projects that allow the organization to excel in the digital economy.”
“The ongoing pandemic and uncertain market conditions, have had a significant impact on Indian organizations’ IT strategies. IT delivery witnessed a massive change with organizations aggressively adopting cloud first approach and putting even more pressure on legacy data protection. According to the report, 64% of Indian organizations accelerated their DX initiatives to enable real-time data capture, lower processing time, and accelerate business outcomes. 73% of Indian organization increased cloud adoption and 73% increased their hybrid-IT deployment,” said Sandeep Bhambure, Vice President and Managing Director, Veeam India and SAARC.
“Having said that, organizations also face tremendous IT challenges with respect to legacy systems and data protection. 77% Indian organizations face an issue with recovering applications in an acceptable timeframe and 69% of them face a ‘protection gap’. Hence, IT leaders are looking for immediate results to address their critical data protection needs. For 32% of respondents the most important driver for change is improving the economics of their solution, including improving ROI/TCO and reducing hardware/software costs or changing consumption models from CapEx to OpEx. As the demands of a modern enterprise gets complex, data protection and management must evolve to a higher state of intelligence across all environments.”
Other highlights of the report include:
- Hybrid IT across physical, virtual and cloud: Over the next two years, most organizations expect to gradually but continually reduce their physical servers, maintain, and fortify their virtualized infrastructure, and embrace “cloud-first” strategies. This will result in half of production workloads being cloud-hosted by 2023, forcing most organizations to re-imagine their data protection strategy for new production landscapes.
- Rapid growth in cloud-based backup: Backup is shifting from on-premises to cloud-based solutions that are managed by a service provider, with trajectory reported from 29% in 2020 to 46% anticipated by 2023.
- Importance of Reliability: “To improve reliability” was the most important driver of a global organization to change its primary backup solution, stated by 31% of respondents.
- Improving ROI: 22% stated that the most important driver for change was improving the economics of their solution, including improving ROI/TCO and reducing.
- Availability Gap: 80% organizations have an “availability gap” between how fast they can recover applications and how fast they need to recover them.
- Reality Gap: 76% have a “protection gap” between how frequently data is backed up versus how much data they can afford to lose after an outage.
- Modern Data Protection: 46% of organizations around the globe will partner with a Backup as a Service (BaaS) provider by 2023 and 51% plan to adopt Disaster Recovery as a Service (DRaaS) in the same timeframe.