Cloud Becoming A Core Business Competency

by CXOtoday News Desk    Jan 11, 2016


Cloud computing is becoming a core IT and business competency that is impacting how companies build products and also how the IT industry functions. Earlier businesses that leveraged cloud based technologies and services, mostly centered around cost savings. Year 2015 was a remarkable year, believe experts, which marked that cloud services and infrastructure officially become mainstream in the enterprise.

Synergy Research Group has dedicated 2015 as “The Year of the Cloud.” In its study measuring growth rates in six different cloud segments, including Software-as-Service (SaaS) and Infrastructure-as-a-Service (IaaS), the research firm found that total cloud operator and vendor revenues hit $110 billion in the last year, a 28 percent annual growth rate for all of the cloud service and infrastructure market segments.

The most rapid growth was seen in the IaaS and Platform-as-a-Service (PaaS) segment at 51 percent, followed by hybrid and private cloud infrastructure services with 45 percent growth. Companies that featured the most prominently among the market segment leaders are Cisco, HP Enterprise, AWS, Microsoft, IBM and Salesforce, says the research.

Over the period Q4 2014 to Q3 2015 total spend on infrastructure hardware and software to build cloud services exceeded $60 billion, with spend on private clouds accounting for over half of the total but spend on public cloud growing much more rapidly. Hybrid cloud is also fast becoming mainstream.

Last month, a global study conducted by venture capital firm North Bridge in partnership with Wikibon too, leaves no doubt that the biggest cloud computing question facing corporations is no longer “whether” but “how much”. The survey of nearly 1000 cloud adopters in 38 countries reveals that cloud adoption has reached record levels in both business and IT functions. Significantly, IT organizations are coming on board in a big way as they attempt to rein in rogue cloud usage and create structure and governance standards.

The reasons companies are adopting cloud platforms are changing, says the study. For example, business agility enabled by cloud platforms leap from fourth to second in importance over the last five years. Cloud use is most prevalent among sales and marketing groups (81.3 percent), business analytics (79.9 percent), customer service (79.1 percent) and human resources (73.5 percent).

Reports also validate that hybrid cloud is becoming the new normal in the enterprise. A research report by Canopy in collaboration with EMC and Forrester reveals that hybrid clouds is the next logical evolution in cloud computing. With more and more companies looking for ways to bridge the current infrastructure and future investments to help connect, innovate and grow, they are realizing that the hybrid approach provides the most stable foundation for their organizations. The study that surveys over 150 companies with revenues of $1 billion+ across multiple countries, shows an increased adoption of hybrid cloud services with 58 percent of the respondents saying they already have some form of hybrid cloud environment.

Synergy stated that investments in infrastructure by cloud service providers helped them to generate $20 billion in revenues from cloud infrastructure services (IaaS, PaaS, private & hybrid services) and a further $27 billion from SaaS, in addition to supporting internet services such as search, social networking, email and e-commerce. UCaaS, while in many ways a different type of market, is also growing steadily and driving some radical changes in business communications.

“In many ways 2015 was the year when cloud became mainstream. Across a wide range of cloud applications and services we have seen that usage has now passed well beyond the early adopter phase and barriers to adoption continue to diminish,” said Synergy Research Group’s founder and Chief Analyst Jeremy Duke.

“Cloud technologies are now generating massive revenues and high growth rates that will continue long into the future, making this an exciting time for IT vendors and service providers that focus on cloud,” summed up Synergy Research Group Chief Analyst John Dinsdale.