Cloud Computing Services on the Rise, Survey FindsBy Nathan Eddy | Posted 2010-10-01 Email Print
Re-Thinking HR: What Every CIO Needs to Know About Tomorrow's Workforce
A CompTIA study found while many businesses plan on adopting cloud-based services, significant challenges to growth remain.
According to research from non-profit trade organization Computing
Technology Industry Association (CompTIA), investments in cloud computing
solutions and services are poised to increase in the next 12 months as
opportunities for information technology (IT) channel companies and their
customers come into clearer focus. Nearly two-thirds of end users (64 percent)
said they plan to increase their investment in cloud solutions by more than 5
percent in the coming year.
The study, "Cloud Computing: Pulling Back the Curtain," found 72 percent of end-user organizations surveyed plan to expand the number and types of cloud computing services they use over the next 12 months. Similarly, more than half of IT channel organizations surveyed plan to boost their investment in cloud computing by 10 percent or more in the next 12 months.
"Clearly there is growing momentum behind cloud computing, evidenced by climbing adoption rates and greater awareness," said Carolyn April, director of industry analysis for CompTIA. "But cloud computing adoption is still nascent. The year ahead will be one of evaluation, trial and error and, most importantly, opportunity as the market sorts through the role IT channel companies will play, best business models, sales and marketing strategies and most relevant technologies."
The study also identifies a number of challenges that end users cite during adoption, including difficulty integrating cloud solutions with existing IT systems and the painful transition away from legacy systems. Likewise, the study noted the channel has experienced obstacles along the way, mainly internally focused issues such as shouldering initial startup costs associated with cloud computing and determining the right revenue model.
"The good news for IT channel companies is that customers want to use them as a source for their cloud computing solutions, more so than vendors, consultants or self-service options," April said. "The smart solution provider will become the de facto expert on the benefits the cloud can bring; not just cost-savings, but ways that moving IT to the cloud can advance their customers’ business objectives."
Medium-sized businesses with between $10 million and $99.9 million in annual revenues are the most aggressive users of cloud computing, according to CompTIA research. The study found nearly two-thirds (64 percent) of medium-sized businesses report involvement with cloud computing. That compares to 36 percent of small companies (less than $10 million in sales) and 58 percent of larger firms ($100 million and above in revenue).
From the customer perspective, the transition to cloud computing is accelerating because of a desire to reduce capital expenditures (cited by 85 percent of end-user respondents) and to drive down costs (84 percent). Customers also expressed a desire to add new capabilities not available in current IT models as a reason to move to cloud computing. It was cited by 81 percent of end users surveyed, and April said it offers up a compelling reason for channel providers to sell cloud services as a value-added solution, not simply a way to cut customer IT costs.
Forty percent of end users reported plans to look to the cloud for business productivity applications, and 38 percent identified document and content management services as a priority purchase. Other cloud services end users said they intend to buy in the next 12 months include security (35 percent), storage (35 percent) and general-purpose services (35 percent).
More than half of end users surveyed say they will make their purchases from a third-party cloud services provider, defined as a value-added reseller (VAR), solution provider or other channel organization. "Even more encouraging for IT channel companies, customers with the heaviest investment plans for the cloud over the next year overwhelmingly cite the channel as their source—60 percent of them versus 40 percent that say they will seek out a vendor," the report noted.