Nearly 50% Cos Using Cloud To Drive Innovation

by CXOtoday News Desk    Jun 20, 2014

cloud computing

The Cloud computing revolution is already underway with more companies adopting software-as-a-service (SaaS) over the past few years. A new study by Gigaom Research reveals that globally SaaS adoption rose from 13 percent in 2011 to 74 percent this year. Nearly half of the organizations are using cloud to fuel revenue generation or new product creation, says the study.

Growth pockets

While the study clearly demonstrates that SaaS is the strongest area of adoption for cloud and is driving everything, the study also noted 56 percent of businesses are using infrastructure-as-a-service (IaaS) technologies to harness elastic computing resources, and 41 percent are leveraging platform-as-a-service (PaaS) tools to develop and test new applications.

Survey respondents named agility, cost and scalability as the top three drivers for cloud adoption. Nearly 67 percent of respondents said they believed they would move their data to the cloud over the next two years. Despite concerns of data security in the cloud, half the business users said they are using the cloud to create new products or increase their revenues. Another 45 percent said they already, or plan to, run their company from the cloud.

Two-thirds of respondents believe their data will come to reside in some form of cloud over the next two years as bigger data needs consolidation, and collaboration and creation go online.

“This wave of cloud computing that’s revenue and new-business driven is good news for long-suffering IT execs,” said David Card, Vice President of Gigaom Research. “If they can offload tedious but necessary cost-center functions, and refocus resources on cloud-driven new business, they might be able to retake their seat at the C-table.”

The Cloud drivers

Over the last few years, the drivers for cloud adoption have remained constant with agility, cost and scalability as the top three. One area that has moved up the agenda as a driver though is that companies are increasingly moving workloads to the cloud to switch CapEx for OpEx. This is especially true for large companies with more than 5,000 employees.

On the inhibitor front, security continues to be a strong barrier with 49% of respondents concerned about how secure their data is in the cloud. Privacy concerns also rose, once again, to 31% in 2014 as increased tension manifested itself between the desire for anonymity and the convenience and utility of personalization. This is an area for vendors and enterprises to distinguish themselves as faithful custodians of personal data and engendering trust.

While interoperability as an inhibitor saw a significant decrease from 27% last year to 17% in 2014 with greater attention being paid to issues like data portability, fear of vendor lock-in was still 29%, which put focus on open source cloud projects, like OpenStack, that have grown significantly, says the study.