Legacy technology and lack of skills hindering digital transformation of organizations

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%, according to Veeam Software’s 2020 Data Protection Trends Report. However, almost half of global organizations are being hindered in their DX journeys due to unreliable, legacy technologies with 44% 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 report surveyed more than 1,500 global enterprises 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. 

“Technology is constantly moving forward, continually changing, and transforming how we do business – especially in these current times as we’re all working in new ways.  Due to DX, it’s important to always look at the ever-changing IT landscape to see where businesses stand on their solutions, challenges and goals,” said Danny Allan, CTO and SVP of Product Strategy at Veeam.  “It’s great to see the global drive to embrace technology to deliver a richer user experience, however the Achilles Heel still seems to be how to protect and manage data across the hybrid cloud.  Data protection must move beyond outdated legacy solutions to a higher state of intelligence and be able to anticipate needs and meet evolving demands.  Based on our data, unless business leaders recognize that – and act on it – real transformation just won’t happen.”

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%) 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%) of organizations suffer unexpected outages and on average, an outage lasts 117 minutes (almost two hours).

Putting this into context, organizations consider 51% of their data as ‘High Priority’ versus ‘Normal’. An hour of downtime from a High Priority application is estimated to cost USD 67,651, 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%), the ability to move workloads from on-premises to cloud follows (50%), and the ability to move workloads from one cloud to another (48%). 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.

Allan concluded: “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 data centers 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.”

“Digital transformation is redefining the competitive business environment at an unprecedented rate. Anchored on key technologies like cloud, virtualization and modern storage systems, modernization of IT is critical to deliver business continuity for rising customer expectations and de-risking business from evolving cyberattacks plus compliance measures. Our Veeam 2020 Data Protection Trends Report puts the spotlight on the importance of data management and protection across hybrid cloud environment. As the demands of a modern enterprise gets complex, it’s not enough for data to be backed up, data must in fact move to the higher state of intelligence and automatically anticipate demand, securely across physical, virtual and cloud environments. A simple, flexible and reliable Cloud Data Management solution is critical to build a robust foundation for today’s digital business”, said Sandeep Bhambure, Vice President & Managing Director, Veeam India & SAARC.

Other key highlights of the report include:

• The No. 1 challenge that will impact organizations within the next 12 months is cyber threats (32%). Shortage of skills to implement technology (30%) and meeting changing customer needs (29%) were also cited as key hurdles in the next 12 months.
• Lack of staff to work on new initiatives (42%) was cited as the most impactful data protection challenge organizations currently have. Lack of budget for new initiatives (40%) and lack of visibility on operational performance (40%) were also cited.
• Over half (51%) of respondents believe DX can help their organization transform customer service. Almost half said it could transform business operations (48%) and deliver cost savings (47%).
• Almost one-quarter (23%) of organizations describe their progress towards achieving DX initiatives and goals as mature or fully implemented.
• Almost a third (30%) of organizations are currently in the early stages of implementing or planning DX.
• Over a third (39%) of respondents said the ability to improve reliability of backups is the most likely reason to drive their organization to change its primary backup solution. 38% cited reduced software or hardware costs and 33% said improving return on investment.
• Almost a quarter (23%) of organizations’ data is replicated and made business continuity (BC)/DR capable via a cloud provider. Over a fifth (21%) of data across organizations globally is not replicated or staged for BC/DR.
• Over a quarter (27%) of organizations’ data is backed up to the cloud by a Backup as a Service (BaaS) provider. 14% of data across organizations globally is not backed up.
• Over two in five (43%) organizations plan to leverage cloud-based backup managed by a BaaS provider within the next two years.