The Cloud Moves Ahead, but Isn’t Fully Mature
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.
Companies rely on the cloud for: Storage: 59%, BC/DR: 48%, Security: 44%
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.
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.
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.
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.
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.
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%.
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%.
“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.
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.
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.