- Industrial firms are adopting public, private, and hybrid cloud but often miss value by treating cloud mainly as an IT cost play rather than a business transformation.
- Surveys show cloud transformations frequently underperform expectations, with many programs exceeding budgets and proving more complex than planned.
- Most cloud upside comes from business-domain use cases (e.g., manufacturing, supply chain, analytics, IoT, automation) rather than infrastructure savings, with trillions in potential value by 2030.
- Winning programs pair clear value road maps with strong governance (FinOps, sovereignty/compliance), business-IT translation, domain-led execution, and plans to retire legacy systems.
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The 2021 McKinsey survey of 800+ industrial-executive respondents demonstrated that although “nearly two-thirds” of industrial companies are using cloud solutions, about 74 % of cloud transformations fail to achieve expected savings or business outcomes, with 40 % of projects exceeding budgets and many finding cloud substantially more complex than anticipated; this disconnect between adoption and value realization remains a central issue.
McKinsey’s later work (2022-23) expands the opportunity: for Forbes Global 2000 firms, cloud value under “business innovation” and “pioneer/emerging technologies” segments could yield upward of USD 3 trillion in EBITDA globally by 2030, overwhelmingly driven by non-IT use cases such as IoT, advanced analytics, hyperscale platforms, automation, and novel business models.
Meanwhile, recent regional and sectoral data show varying cloud adoption curves. In China, private cloud is still heavily used, with industrial/manufacturing sectors showing lower uptake across business domains like product development, supply chain, and marketing/sales; leaders have 70-90 %+ workloads in cloud, but many followers and laggards still host lower shares and are projected to grow more slowly. In EMEA, 2025 surveys of over 1,400 leaders indicate cloud strategies now more often emphasize governance, trust, sovereignty, resilience, and embedding AI—suggesting maturing cloud digital transformation programs beyond technical deployment.
Further, cloud program success correlates strongly with certain capabilities: a “business translator” bridging IT and business, domain-oriented planning and sequencing, legacy system retirement, internal capability building, and focusing on business value rather than just IT cost or operational efficiency. Kyndryl’s report adds that 70 % of CEOs admit their cloud environments were built “by accident,” with fragmented architectures and lack of strategy contributing significantly to performance, risk, and ROI challenges.
Strategic implications: First, companies should assess their ambition vs. readiness—both in terms of domain maturity and supporting capabilities. Second, CSPs and consulting firms that can help orchestrate not just migration but value road-mapping, FinOps, regulatory and sovereignty concerns, and business innovation will differentiate. Third, investors should scrutinize cloud transformation claims—look for evidence of business-driven metrics, realistic cloud operating models, and proven track records, especially given the high failure rate. Fourth, regional and industry regulatory environments (e.g., European data sovereignty, China’s private cloud preference) will materially influence cloud deployment models and should be incorporated into strategic risk assessments.
Open questions remain: How much does generative AI alter cloud value dynamics (e.g., accelerating adoption and generating new business cases)? What are the cost trade-offs in shifting workloads back on-premises for sovereignty or regulatory reasons? And how can “cloud fatigue” or difficulty in scaling pilot success to enterprise-wide transformation be overcome?
Supporting Notes
- McKinsey’s 2021 survey found nearly 66 % of industrial firms use cloud solutions, yet 74 % of their cloud transformations fail to capture expected savings or business value; 40 % overrun budgets; many find projects more complex than initially estimated.
- Of the total cloud value potential (≈ USD $600 billion in discrete manufacturing’s McKinsey survey), only about 5 % lies in IT cost savings, with the remaining ≈ 95 % tied to business domains such as manufacturing, supply chain, procurement, sales, and marketing, delivering 2-3 percentage points of EBIT margin impact.
- McKinsey’s “Projecting the global value of cloud” estimates USD $3 trillion in EBITDA opportunity for Forbes Global 2000 firms by 2030, where innovation-led growth (IoT, automation, etc.) contributes the majority compared to rejuvenation of IT infrastructure.
- In China, industrial and manufacturing sectors currently lag in business-domain cloud use; while leaders had 70-90 % of workloads in cloud in 2021 and expect to reach 90 % by 2025, many others remain far lower, especially in domains like supply chain, product development, and marketing.
- PwC’s 2025 EMEA Cloud Business Survey (1,415 respondents) shows 82 % of organizations are revising cloud strategies in response to sovereignty and regulatory pressures; strong emphasis now on governance, trust, and embedding AI across workloads.
- Kyndryl’s Cloud Readiness Report (2025) indicates ~70 % of CEOs say their current cloud environment was built “by accident” rather than by strategic design, leading to fragmented architectures, performance issues, security threats, and challenges in realizing ROI; many are now shifting to deliberate cloud design.
- Gartner forecasts worldwide public cloud services spending will reach USD $723.4 billion in 2025 (from USD $595.7 billion in 2024), with hybrid cloud adoption projected at 90 % of organizations by 2027; all cloud segments measured are expected to see double-digit growth in 2025.
- McKinsey’s newer “In search of cloud value” report (Nov 2023) notes that even after many years of cloud programs, large companies run only 15-20 % of their applications in cloud (excluding SaaS), with modest recent growth; generative AI is viewed as a potential factor to increase ROI and accelerate migration.