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NetApp®, the intelligent data infrastructure company, today released its second annual Cloud Complexity Report. The report analyses the experiences of global technology decision-makers deploying Artificial Intelligence (AI) at scale and shows a stark contrast between AI leaders and AI laggards.

The Cloud Complexity Report 2024 provides global insights into the progress, readiness, challenges, and momentum since last year’s report, what we can learn from both the AI leaders and AI laggards, and the critical role of a unified data infrastructure in achieving AI success.

“AI is only as good as the data that fuels it,” said Pravjit Tiwana, General Manager and Senior Vice President of Cloud Storage at NetApp, about the findings of the company’s Cloud Complexity Report 2024. “Both the AI leaders and AI laggards show us that in the prevailing hybrid IT environment, the more unified and reliable your data, the more likely your AI initiatives are to be successful.”

“APAC leaders today recognise the efficiency and innovation gains offered by AI; however, the data shows adoption variations between industries and geographies in the region,” said Matthew Swinbourne, CTO Cloud Architecture at NetApp Asia Pacific. “Whether companies are AI leaders or AI laggards, optimizing IT environments before deploying AI must be top of mind to see the best return from investment.”

Cloud Complexity Report 2024 Uncovers Significant Divide Between AI Leaders and AI Laggards

The Cloud Complexity Report 2024 found a clear divide between AI leaders and AI laggards across several areas, including:

• Regions. 60% of AI-leading countries (India, Singapore, UK, USA) have AI projects up and running or in pilot—in stark contrast to 36% in AI-lagging countries (Spain, Australia/New Zealand, Germany, Japan).
• Technology leads with 70% of AI projects up and running or in pilot, while Banking & Financial Services and Manufacturing follow with 55% and 50%, respectively. However, Healthcare (38%) and Media & Entertainment (25%) are trailing.
• Company size. Larger companies (with more than 250 employees) are more likely to have AI projects in motion, with 62% reporting projects up and running or in pilot, versus 36% of smaller companies (with fewer than 250 employees).

Both AI leaders and AI laggards show a difference in their approach to AI:

• Globally, 67% of companies in AI-leading countries report having hybrid IT environments, with India leading (70%) and Japan lagging (24%).
• AI leaders are also more likely to report benefits from AI, including a 50% increase in production rates, 46% in the automation of routine activities, and a 45% improvement in customer experience.

“The rise of AI is ushering in a new disrupt-or-die era,” said Gabie Boko, Chief Marketing Officer at NetApp. “Data-ready enterprises that connect and unify broad structured and unstructured data sets into an intelligent data infrastructure are best positioned to win in the age of AI.”

AI Laggards Must Swiftly Innovate to Stay Competitive

Despite the divide, there is notable progress among AI laggards in preparing their IT environments for AI, but the window to catch up is closing rapidly, as the Cloud Complexity Report 2024 found out..

• A significant number of companies in AI-lagging countries (42%) have optimized their IT environments for AI, including Germany (67%) and Spain (59%). ANZ and Japan, however, are below the global average at 38% and 25%, respectively.
• Companies in some AI-lagging countries already report seeing the benefits of a unified data infrastructure in place, such as easier data sharing [Spain (45%), Australia/New Zealand (43%), Germany (44%)] and increased visibility [Spain (54%) and Germany (46%)]/\

IT Costs and Data Security Emerge as Top Challenges but Will Not Impede AI Progress

Rising IT costs and ensuring data security are two of the biggest challenges in the AI era, according to the Cloud Complexity Report 2024, but they will not block AI progress. Instead, AI leaders will scale back, cut other IT operations, or reallocate costs from other parts of the business to fund AI initiatives.

AI leaders will also increase their cloud operations (CloudOps), data security, and AI investments throughout 2024, with 40% of large companies saying AI projects have already increased IT costs.

Year over year, “increased cybersecurity risk” jumped 16% as a top concern from 45% to 61%, while all other concerns decreased.

To manage AI project costs, 31% of companies globally are reallocating funds from other business areas, with India (48%), UK (40%), and US (35%) leading this trend.

In APAC, 34% of companies said AI projects have already increased IT costs. 60% of respondents cited “increased cybersecurity risk” as their top concern, while 31% said they are reallocating funds from other business areas to manage AI project costs.

Security, AI, and CloudOps Drive 2024 Cloud Investments

As global companies, whether AI leaders or AI laggards, increase investments, they are relying on the cloud to support their goals. Specifically, the Cloud Complexity Report 2024 found:

• Companies reported that they expect to increase AI-driven cloud deployments by 19% from 2024 to 2030.
• 85% of AI leaders plan to enhance their CloudOps automation over the next year.
• Increasing data security investments is a global priority, jumping 25% from 33% in 2023 to 58% in 2024.

In APAC, the proportion of companies that will have more than 50% of their cloud deployments supported by AI-driven applications will increase 15% between 2024 and 2030. Two-thirds (67%) of AI leaders here plan to enhance their CloudOps automation over the next year, while data security investments are expected to jump 21% from 37% in 2023 to 58% in 2024.

To learn more and access the Cloud Complexity Report 2024 by Netapp, visit https://www.netapp.com/company/cloud-complexity-report/.

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