The Cloud Moves Ahead, but Isn't Fully Mature

By Gina Roos  |  Posted 2013-10-16 Email Print this article Print

Cloud computing is having a major impact on the channel, as well as on its vendors and customers. Strategies are evolving as more companies rely on the cloud for storage, business continuity/disaster recovery (BC/DR) and security. Currently, nine in 10 companies surveyed claim some form of cloud use, compared with eight in 10 last year, according to a recent CompTIA study of end users and channel companies. These clouds are implemented through three models: software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS). Approximately half of channel firms surveyed see faster revenue gains and larger profits from cloud offerings, compared with traditional on-premise technology. Yet less than half of channel firms with cloud offerings described their cloud business as completely mature, which the study defines as "an established, strategic part of business plans." The report stated, "Although adoption rates are high and market numbers are positive, there is still confusion related to cloud computing. This confusion will hinder end users and channel firms from fully transforming their IT practices and offerings."  It added that companies will continue "to clarify issues around [cloud] usage and [will] move toward greater maturity." Here's a look at key takeaways from the CompTIA study.

  • Shifting Cloud Trends

    More than six in 10 cloud users have made secondary shifts in their infrastructure or applications after their transition to the cloud. Roughly 10% to 15% have made only one move, which may include shifting from a public to a private cloud, switching providers or moving to an on-premise system.
    1-Shifting Cloud Trends
  • De Facto Standard for Business Processes

    Companies rely on the cloud for: Storage: 59%, BC/DR: 48%, Security: 44%
    2-De Facto Standard for Business Processes
  • Big Sellers: Cloud-Based BI and Data Analytics

    The most popular cloud services include email, storage and virtual desktop, with nearly two-thirds of channel companies selling these services. A surprise finding is that 62% sold cloud-based business intelligence and data analytics in the past year, and 73% offer these as a cloud service.
    3-Big Sellers: Cloud-Based BI and Data Analytics
  • Cutting Costs Is Biggest Benefit

    According to 43% of respondents, the "ability to cut costs" is a benefit of cloud adoption, while 42% say it's a "better option for multiple reasons," and 40% say the "modernization of IT" is the main advantage.
    4-Cutting Costs Is Biggest Benefit
  • Cloud Computing Confusion

    While cloud adoption rates are high, only 46% of channel companies with cloud offerings describe their businesses as mature and a strategic part of business plans. This could result in a cloud roadblock for both users and the channel.
    5-Cloud Computing Confusion
  • Size Makes a Difference

    The implementation of cloud-based apps often varies by company size. For example, 51% of small firms use cloud-based email, compared with 59% of midsize firms and 49% of large companies. The gap closes for productivity offerings with 45% of SMBs using cloud-based productivity apps, versus 48% of large companies.
    6-Size Makes a Difference
  • Reducing IT Complexity

    Six in 10 midsize channel companies said that a customer's need to reduce complexity across IT is the No. 1 reason they recommend cloud versus on-premise technology. Other reasons include the need to increase mobile/remote access to company data, cost reductions, need to scale new features/services faster, and the lack of in-house IT management.
    7-Reducing IT Complexity
  • Security: Still a Big Concern

    IT user respondents' objections to cloud adoption: security concerns: 56%, Internet downtime: 44%, integration concerns with on-premise infrastructure:40%, data portability: 39%, total cost of ownership:37%, lack of understanding of options/tradeoffs in cloud:36%, resistance to change by internal IT: 31%.
    8-Security: Still a Big Concern
  • Driving IT Changes

    According to 53% of IT user respondents, cloud adoption has resulted in new policies and procedures, while 45% have changed existing policies and procedures. And 39% have adapted monitoring and management tools and implemented new policies for IT decision making. The bad news: It has resulted in a reduction of IT staff, according to 19%.
    9-Driving IT Changes
  • Going Rogue

    "Rogue IT"—when line-of-business (LOB) personnel buy their own clouds without IT—is a big hurdle. While 54% report that the IT team is involved when LOB employees procure cloud solutions, 36% say IT is consulted without final approval, and 10% say IT teams are only informed--not involved.
    10-Going Rogue
  • Big Growth Opportunities

    Half of IT channel companies reveal that revenue for cloud offerings is growing faster than for established products and services. It's virtually the same story for profit margins, with 49% reporting higher margins for cloud offerings, versus established products/services.
    11-Big Growth Opportunities
  • Bottom-Line Effects

    Only 29% of IT channel companies that describe their offerings as "not mature" reveal faster cloud revenue growth, compared with 54% of companies with mature offerings. In terms of profit margins, 21% of companies with offerings that are "not mature" indicate larger cloud profit margins, compared with 58% of companies with mature offering.
    12-Bottom-Line Effects
Gina Roos is a business and technology writer who has contributed print and Web articles to leading electronic industry publications. She was Editor-in-Chief at Electronics Sourcing North America, and served as Site Editor for UBM's Green SupplyLine and Electronics Supply & Manufacturing Websites. She also authored the "In the Channel" column, covering the electronics distribution industry for EETimes ProductWeek. Gina was the founder and editor of Electronics Advocate, an online magazine covering design and supply chain issues in the electronics industry. The publication was sold to MMG Publishing UK in 2010. Gina has a degree in journalism.

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