Second Annual Kindrill Festival Readiness report found that geopolitical pressures have become more important in IT decision-making compared to 12 months ago.
According to a survey of 3,700 senior executives in 21 countries, including the UK, 83% agree that new data sovereignty and repatriation rules are influencing IT decision-making, and 82% agree that their IT decision-making is being affected by growing geopolitical instability and tensions.
Kindril said that geopolitical pressure force the data reversal. While reporting the clear benefits of cloud adoption, organizations are now re-evaluating where and how their data is stored, processed, accessed and protected in an increasingly fragmented regulatory environment.
Three-quarters (75%) agree their organization is increasingly concerned about the issue geopolitical risks related to data storage and management in global cloud environments. In fact, 86% agree that country of origin and regulatory compliance of cloud service providers are becoming increasingly important factors in the cloud service evaluation process. Companies are also trying to balance the challenges of legacy infrastructure, with 70% of executives saying they created the cloud by accident rather than by design.
Looking at the UK data, Kindrill said 80% of UK leaders are concerned about the geopolitical risks of storing and managing data around the world, higher than the global average of 75%. This has led to 68% of UK respondents changing their cloud strategies.
Overall, nearly a third (65%) of those surveyed agree that their CEO and CFO disagree on the long-term value of technology investments. Nearly three-quarters (74%) say the need to demonstrate short-term returns on investment undermines long-term innovation goals.
The survey found that 63% of organizations surveyed said they incurred more costs than expected when migrating to the cloud. The Kyndril survey also found that 62% of companies initially invested heavily in the cloud, but have since had to move some workloads to on-premises. More than half (56%) of organizations surveyed said they have inaccessible data in environments that were never properly decommissioned.
Kindril also reported that almost all companies surveyed (95%) would change the way they implement their cloud strategy if given the opportunity. When asked how they would change their cloud implementation, the top priority would be to place more emphasis on security and compliance, followed by a better understanding of the complexity of integration.
In fact, 83% of UK businesses experienced cybersecurity-related disruptions last year, making cybersecurity and IT infrastructure modernization the two most important risk mitigation actions (43% each).
Looking at artificial intelligence (AI) adoption among organizations surveyed, Kindril reported that while more than half (54%) say they see a positive return on AI investments (up 12 points from 2024), 62% have still not advanced their AI projects beyond the pilot stage.
UK data shows that while 84% of UK executives surveyed say AI will completely change roles and responsibilities over the next 12 months, 46% are worried about having the necessary technical skills to get the most out of AI.
“There is a readiness gap as enterprises face the prospect of the transformative value of artificial intelligence,” said Martin Schröter, chairman and CEO of Kyndril. “While 90% of organizations believe they have the tools and processes to scale innovation, more than half are held back by their technology stack, and less than a third say their employees are truly ready for AI. Closing this gap is the challenge and opportunity ahead.”
