Nutanix Study Finds Public Sector Embraces Generative AI, but Faces Security, Skills, and Infrastructure Gaps

Rhea-AI Summary

Nutanix (NTNX) released its seventh annual Public Sector Enterprise Cloud Index survey revealing strong Generative AI adoption in the public sector, with 83% of organizations having a GenAI strategy (54% actively implementing, 29% preparing). The study highlights that 76% of organizations need infrastructure improvements to support modern cloud applications. Key findings show 94% of public sector organizations are currently using GenAI applications, with expected ROI within one year. However, significant challenges remain: 92% of respondents indicate a need for better GenAI security measures, and 96% report security and privacy becoming higher priorities. The research also reveals strong container adoption, with 96% of organizations in the process of containerizing applications, and 91% reporting benefits from cloud native applications.

Positive

• 83% of public sector organizations have a GenAI strategy, showing strong adoption
• 94% of organizations are already using GenAI applications with ROI expected within one year
• 96% of organizations are containerizing applications, indicating strong technological advancement
• 91% of respondents report benefits from adopting cloud native applications

Negative

• 76% of organizations require infrastructure improvements to support cloud native apps
• 92% of organizations need to improve their GenAI security measures
• Organizations face challenges in data security, privacy, and skills gaps for GenAI implementation

Insights

Technology and AI Research Analyst

Nutanix's survey reveals strong public sector GenAI adoption despite infrastructure challenges, signaling potential growth opportunities in cloud-native solutions.

Nutanix's seventh annual Public Sector Enterprise Cloud Index survey reveals significant momentum for Generative AI in government agencies, with 83% of organizations having GenAI strategies (54% actively implementing, 29% preparing). This widespread adoption signals a major shift in how public sector entities are approaching technology modernization.

The findings highlight critical infrastructure gaps that create potential revenue opportunities for Nutanix. With 76% of respondents indicating their current IT infrastructure needs moderate to significant improvement to support cloud-native applications at scale, there's a clear market need that aligns with Nutanix's hybrid multicloud offerings. This infrastructure modernization requirement stems directly from GenAI's demands for enhanced data security, integrity, and resilience.

The security challenges revealed are particularly noteworthy - 92% of public sector leaders believe their organizations need stronger GenAI security measures, while 96% report security and privacy becoming higher priorities. These concerns create a substantial opportunity for Nutanix to position its solutions as addressing these critical security needs.

Most compelling is the high container and Kubernetes adoption rate, with 96% of respondents at least in the process of containerizing applications. This validates Nutanix's strategy in the cloud-native space, as public sector organizations increasingly embrace modern application architectures that require sophisticated infrastructure support.

For investors, these findings suggest Nutanix is well-positioned to capitalize on public sector digital transformation initiatives, particularly as these organizations struggle with infrastructure challenges while rapidly adopting GenAI and containerization technologies. The survey reinforces Nutanix's market opportunity in providing the infrastructure modernization necessary to support these emerging technologies in government environments.

GenAI is expected to improve productivity, efficiency, and automation, with long-term ROI for Public Sector organizations

SAN JOSE, Calif., June 17, 2025 (GLOBE NEWSWIRE) -- Nutanix (NASDAQ: NTNX), a leader in hybrid multicloud computing, announced the findings of its seventh annual global Public Sector Enterprise Cloud Index (ECI) survey and research report, which measures enterprise progress with cloud adoption in the industry. The research showed that 83% of public sector organizations have a GenAI strategy in place, with 54% actively implementing, and 29% preparing for implementation.

As public sector organizations ramp up GenAI adoption, 76% of IT decision-makers say their current infrastructure needs moderate to significant improvement to support modern, cloud native applications at scale. This year’s public sector ECI found that infrastructure modernization emerged as a top priority, underscoring the growing demand for systems capable of meeting GenAI’s requirements for enterprise-ready data security, data integrity, and resilience.

This year’s report also revealed that public sector leaders are increasingly leveraging GenAI applications/workloads into their organizations. Real-world GenAI use cases across the public sector gravitate towards constituent/employee support and experience solutions (e.g., chatbots) and content generation. However, concerns remain with 92% of public sector leaders highlighting the need for their organizations to do more to secure GenAI models and applications. The results of that need, according to 96% of respondents, is security and privacy becoming higher priorities for their organizations.

“Generative AI is no longer a future concept, it’s already transforming how we work,” said Greg O’Connell, VP, Federal Sales, Public Sector at Nutanix. “94% of public sector organizations are already putting AI to work and expect returns in as little as one year. As public sector leaders look to see outcomes, now is the time to invest in AI-ready infrastructure, data security, privacy, and training to ensure long-term success.”

Public sector survey respondents were asked about GenAI adoptions and trends, Kubernetes and containers, how they’re running business and mission critical applications today, and where they plan to run them in the future. Key findings from this year’s report include:

• GenAI solution adoption and deployment in the public sector will necessitate a more comprehensive approach to data security. Public sector respondents indicate a significant amount of work needs to be done to improve the foundational levels of data security/governance required to support GenAI solution implementation and success. 92% of public sector respondents agree that their organization could be doing more to secure its GenAI models and applications. Luckily, many IT decision-makers in the public sector are aware of this impending sea change, with 96% of respondents agreeing that GenAI is changing their organization’s priorities, with security and privacy becoming higher priorities.
• Prioritize infrastructure modernization to support GenAI at scale across public sector organizations. Running modern applications at enterprise scale requires infrastructure solutions that can support the necessary requirements for complex data security, data integrity, and resilience. Unfortunately, 76% of respondents in the public sector believe their current IT infrastructure requires at least moderate improvement to fully support cloud native apps/containers. Furthermore, IT infrastructure investment was ranked as a top area of improvement among public sector respondents, a sign that IT decision-makers are aware of the need to improve.
• GenAI solution adoption in the public sector continues at a rapid pace, but there are still challenges to overcome. When it comes to GenAI adoption, public sector metrics show progress, with 94% of respondents saying their organization is leveraging GenAI applications/workloads today. Most public sector organizations believe GenAI solutions will help improve levels of productivity, automation, and efficiency. However, organizations in the public sector also note a range of challenges and potential hindrances regarding GenAI solution development and deployment, including data security and privacy, and the need for continued upskilling and hiring to support new GenAI projects/solutions.
• Application containerization and Kubernetes deployment are expanding across the public sector. Application containerization is increasingly pervasive across industry sectors and is set to expand in adoption across the public sector as well, with 96% of segment respondents saying their organization is at least in the process of containerizing applications. This trend may be driven by the fact that 91% of respondents in the public sector agree their organization benefits from adopting cloud native applications/containers.

For the seventh consecutive year, Nutanix commissioned a global research study to learn about the state of global enterprise cloud deployments, application containerization trends, and GenAI application adoption. In the Fall of 2024, U.K. researcher Vanson Bourne surveyed 1,500 IT and DevOps/Platform Engineering decision-makers around the world. The respondent base spanned multiple industries, business sizes, and geographies, including North and South America; Europe, the Middle East and Africa (EMEA); and Asia-Pacific-Japan (APJ) region.

To learn more about the report and findings, please download the full Public Sector Nutanix Enterprise Cloud Index, here and read more in the blog here.

About Nutanix
Nutanix is a global leader in cloud software, offering organizations a single platform for running applications and managing data, anywhere. With Nutanix, companies can reduce complexity and simplify operations, freeing them to focus on their business outcomes. Building on its legacy as the pioneer of hyperconverged infrastructure, Nutanix is trusted by companies worldwide to power hybrid multicloud environments consistently, simply, and cost-effectively. Learn more at www.nutanix.com or follow us on social media @nutanix.

© 2025 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or unregistered trademarks of Nutanix, Inc. (“Nutanix”) in the United States and other countries. Other brand names or marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release is for informational purposes only and nothing herein constitutes a warranty or other binding commitment by Nutanix. This release may contain express and implied forward-looking statements, which are not historical facts and are instead based on Nutanix’s current expectations, estimates and beliefs. The accuracy of such statements involves risks and uncertainties and depends upon future events, including those that may be beyond Nutanix’s control, and actual results may differ materially and adversely from those anticipated or implied by such statements. Any forward-looking statements included herein speak only as of the date hereof and, except as required by law, Nutanix assumes no obligation to update or otherwise revise any of such forward-looking statements to reflect subsequent events or circumstances.

Media Contact:
Gabrielle Moynan
pr@nutanix.com

FAQ

What percentage of public sector organizations have a GenAI strategy according to Nutanix's study?

According to the study, 83% of public sector organizations have a GenAI strategy, with 54% actively implementing and 29% preparing for implementation.

What are the main challenges facing public sector organizations in GenAI adoption according to NTNX research?

The main challenges include data security and privacy concerns, infrastructure gaps (76% need improvements), and the need for continued upskilling and hiring to support new GenAI projects.

How many public sector organizations are using GenAI applications currently?

94% of public sector organizations are currently leveraging GenAI applications and workloads, with ROI expected within one year.

What percentage of public sector organizations are containerizing their applications according to Nutanix?

96% of public sector organizations are at least in the process of containerizing their applications, with 91% reporting benefits from cloud native applications.

What security concerns did the Nutanix study reveal about GenAI in the public sector?

92% of respondents indicated their organizations need to do more to secure GenAI models and applications, with 96% saying security and privacy have become higher priorities.