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Survey Says: Companies Crave Internally Delivered SaaS — Hello, Internal Clouds?

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Business on a laptopWhile just 10 percent of U.S. companies have either adopted cloud computing or have immediate plans to do so, Software as a Service is being used by a whopping 68 percent, according to the results of a new cloud computing survey released by business service provider Avanade (PDF) today. Even more interesting: By a ratio of 4:1 (2:1 on a worldwide basis), respondents said they would prefer to have their applications delivered as services from internal platforms. Is SaaS the “killer app” for internal clouds?

Security no doubt plays a role in this preference, but reliability probably does, too. The time companies have lost due to SaaS outages might be less than what they’ve traditionally experienced with in-house systems, but properly architected internal clouds offer inherently greater service availability (and customer service from trusted internal IT staff). Of the 502 respondents, 90 percent of SaaS users would classify their experiences as largely successful –- despite the fact that 30 percent reported experiencing service outage of 10 hours or more. “That says to me,” said Avanade CTO Tyson Hartman, “that even though the issues are out there, the benefit is so clear that either that type of outage is still better than what they were achieving internally, or is tolerable within their business parameters for [those applications].”

Whether or not these internal clouds will get built is another question. By Forrester’s count, only 2 percent of enterprises have deployed them already, a dearth due largely to skepticism over sharing resources company-wide.

Overall, the rate of current cloud adoption is lower than what recent surveys have shown, but they are far higher than other results if SaaS adoption is included. This discrepancy supports my theory (GigaOM Pro, sub. required) that it is best right now to take from cloud-adoption surveys what we can, but not to take them as gospel.

One thing we can take from this survey is that despite IDC’s advice to use the cloud as a recession stopgap, the economic downturn is not driving much cloud adoption. Only 13 percent of Avanade’s respondents said the downturn has helped advance their cloud efforts. Hartman explained this statistic as indicative of an organic coming around to the cloud. “Part of it is just maturity around the industry’s awareness and customer awareness around what’s viable and the value,” he said, “and I think part of it is economically driven.”

8 Responses to “Survey Says: Companies Crave Internally Delivered SaaS — Hello, Internal Clouds?”

  1. Internal clouds will benefit only large organizations and this will not make any difference in terms IT investment if a small business owner jumps in to internal hosting. For small business, cost effective and productive approach would be to find a reliable SaaS vendor and adopt pay per use model.

  2. Michael Schmidt

    Cloud computing?!?! What exactly is it that “cloud computing” brings to the table that wasn’t already there under names like “hosted Applications”, “Application Service (providers)” “SaaS” etc. – is that really the hight of innovation these days – Call it something new every three to five years and our customers will think we’re really innovative? and now “Internal Cloud”?? I think you mean Intranet – they’ve been around for at least 15 years (Thats how long I’ve been selling them).
    The greatest innovation of them all has got to be the revolutionary step up from actual TALK to 140 character text messaging – allow me to attempt to predict the future innovation in communication: I beleive that text messaging, through intense R&D will evolve into morse code, posibly followed by simple binary (8 character messages) and with a bit of luck sometime in the distant future (in a galaxy far away) we might be able to wrap our minds around incomprehensible and abstract technologies like smoke signals!!! (I know, I know – It’s as far out as Star Trek).
    My apologies for not hyperventilating at the thought of “cloud computing” but it’s nothing but old wine in new bottles helped along by increasing bandwidth and a dash of web 2.0 (another over hyped expression).
    What would be really cool is a way to download a pizza and a 2 liter Coke – when “there’s an app for that” I might pee in my pants of excitement!