The state of the cloud: Adoption is rising

by | Oct 30, 2015 | Cloud

used with the permission of
by Laurence Cruz

cloud_adoptionSurvey: Cloud adoption climbs but strategy lags—even as forward-thinking companies recognize both will help them capitalize on upcoming market transitions.

Cloud adoption is on the rise and bringing significant benefits, and IT architects are becoming more sophisticated in how they think about cloud, but as of early 2015 relatively few companies have mature cloud strategies and many have no cloud strategy at all, according to a worldwide survey by tech research firm IDC.

Nearly two-thirds of survey respondents are using or are planning to use some form of cloud—whether for a single project or their portfolio, for test/development environments, or to run mission-critical applications, according to IDC’sCloudView Survey of nearly 3,500 executives from 17 countries. However, only one-quarter of respondents have repeatable, managed or optimized cloud adoption strategies considered “mature,” and nearly one-third have no cloud strategy, the survey finds.

“Most companies are really just experimenting with cloud,” says IDC analyst Randy Perry, one of the authors of a Cisco-sponsored IDC white paper which details the survey results (Don’t Get Left Behind: The Business Benefits of Achieving Greater Cloud Adoption). “There is significant room for improvement, but it’s early days.”

According to IDC, we’re seeing a “second wave” of cloud adoption today. This wave is characterized by an expectation among businesses that cloud be tied to better business outcomes—such as improved revenue growth and more strategic allocation of IT budgets. The first wave, starting around 2007, was tied to IT metrics such as improved service-level agreements (SLAs) and lower costs—goals that today are considered table stakes for cloud.

“The transition to looking at cloud as a way of reducing costs and opening the doors for a much more efficient and competitive organization is well underway,” says Perry, who runs IDC’s business value strategy practice.

According to the survey, the benefits of cloud adoption begin immediately and accelerate as companies move up the adoption curve. The surveyed organizations report realizing $1.6 million in revenues and $1.2 million in reduced costs per cloud application. The survey includes a Cisco-sponsored business value extension covering nearly 2,500 respondents.

The Hybrid Factor

In other findings, hybrid and private cloud have emerged as a critical part of the mix. Sixty-four percent of cloud adopters are using some form of hybrid cloud, with most expecting to migrate data between public and private clouds.

Private cloud adoption is more prevalent than public, with 44 percent of respondents having adopted?or planning?to adopt private cloud, versus 37 percent for public cloud. In addition, 65 percent of cloud adopters say OpenStack—a free, open source cloud computing platform—is an important part of their strategy.

The Incumbent Advantage

The survey finds companies overwhelmingly trust incumbent providers with their cloud services. No less than 83 percent of respondents say they want to work?with their major incumbent providers to carry current operations into the cloud. And more respondents expect to have two or more major cloud providers rather thana single major cloud provider .

Based on these findings, IDC says web-scale public cloud is making way for enterprise-class “provider-based clouds.” As such, IDC foresees a growing potential for IT incumbents to deliver feature-rich cloud services that are fully managed by enterprise customers. Features could include things like mobile asset management, directory integration and customer-managed encryption keys.

A Third Wave?

So what’s next in cloud? Perry says as companies today optimize their current and near-term application environments with cloud, they will start looking ahead for new ways to take advantage of cloud services—such as the Internet of Things (Iot); its next phase, the Internet of Everything (IoE); and Big Data Analytics (BDA). Calls it cloud’s “third wave.”

“To really optimize those sorts of competitive strategies requires a more significant digital transformation, which willnecessitate more of a long-term cloud strategy,” Perry says. “Companies will need to have the second wave of cloud adoption in place in order to capitalize on these transformational technologies.”