Blog Post

Despite the Hype, There's No Rush to Cloud Computing Yet

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

When it comes to cloud computing, the good news for companies offering everything that isn’t software as a service is that there’s still plenty of time to get your offerings into the market, according to a report released today from Forrester that takes the current temperature of several sections of the industry. The bad news is that adoption of one of the oldest cloud-based services — infrastructure as a service — is still pretty darn low, with only 4 percent of small businesses and 3 percent of enterprise customers even trying it.


So what does this mean for the myriad companies small and large trying to provide infrastructure as a service or a platform as a service (software as a service is already pretty mature)? Well, that the opportunity is out there, but that it’s going to take a while to reach a critical mass of customers. The report is also cautious when it comes to enterprise willingness to adopt technology from startups, which means that competing services from established vendors may win out. But it’s flat-out pessimistic about services such as business process outsourcing in the cloud, which is offered by the likes of Appian, Cordys and Lombardi.

It also doesn’t foresee success for test and development platforms built on a multitenant infrastructure as a service, such what’s offered by Citrix, CollabNet, Interactive TKO and Skytap, partly because many of these vendors are startups and partly because an enterprise would have to still run its application on the same IaaS provider to ensure it works. IBM just opened its own test and dev cloud to a public beta yesterday, which will address the fears of using a startup, but not the issue of testing an app on one cloud and then having to move it to another. After all, there’s only so much one can abstract, even in the clouds.

11 Responses to “Despite the Hype, There's No Rush to Cloud Computing Yet”

  1. Most of the current clouds require enterprises to rewrite their application source code or their application architucture. This is the real problem holding the enterprise masses.
    To be successful a cloud should offer the ability to run the current on premise applications and network topologies, but still enjoy the elasticity and on demand nature of the cloud.

    Google Apps and EC2 are great to build the next facebook, but this is not what enterprise want.
    Force.COM allows ISV to write a great new contract management app, but most enterprises have such apps already.
    Enterprises want to keep their investment in It but use a new great economical and technological model. Full disclosure – this is what my own company, IT Structures, has been doing for 2.5 years now. We have seen both technology vendors and enterprise very quick to love using a cloud that runs the same app they sue in house, but with much less hassle.
    We have seen that it works in the sense that

  2. I think it is unwise to put too much stock into any cloud adoption surveys ( The numbers rarely mesh between one survey and another, and they never take into account how many departments within organizations are using IaaS without going through formal channels. Randy Bias at Cloudscaling just estimated Amazon Web Service annual revenue at around $220 million (

  3. sure, thats obvious as to how many companies expect gazillions of visitors or even get bombarded with them as in case of web sites like Facebook, Google etc. But the good thing is in case the company gets famous they can easily scale up when the traffic spikes without investing huge sums of money in the process which is what the cloud is all about, it gives you ways to expand business as & when needed without impacting the existing user base or even servies those are running online. So how many companies will need that kind of flexibility would depend on how many get successfull & need a robust infrastructure, just using a Cloud IaaS will not make them rich nor successfull.

    How viable business model is it only time can prove that so good number crunching for IaaS companies they should innovate on how to make the end user adoption of cloud more realistic.