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Enterprises to cloud: Ready or not, here we come

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The number of diehards who resist the notion of running business apps in the cloud is dwindling. More than a third of end users polled recently feel that the cloud is safe for mission-critical applications, according to new research.

The 2012 Future of Cloud Survey, sponsored by North Bridge Venture Partners, shows acceptance of cloud computing for important business workloads is growing — the overall percentage of respondents feeling comfortable with this notion was actually 50 percent, but that figure included tech vendors as well as end users and since most vendors have a vested interest in cloud computing, that may skew the numbers. According to last year’s survey, in which North Bridge did not separate out the two types of respondents, just 13 percent of the aggregate respondents were comfortable with the cloud model.

This is considerable progress in a year, said Michael Skok, general partner with North Bridge.  A whopping 57 percent of respondents cited desire for scalability as their chief motivation to go to cloud.

Other takeaways:

  • Software as a Service as exemplified by offerings like crm) remains the top type of cloud investment, cited by 82 percent of respondents saying they use SaaS today and 88 percent expecting to use it in 5 years.
  • Platform as a Service is expected to grow as a category in the next 5 years with PaaS in use by 40 percent of companies now, expected to grow to 72 percent in that period.
  • Infrastructure as a Service is in use by 51 percent of respondents now, with 61 percent expected to use IaaS in 5 years.
  • Security concerns still hamper cloud adoption with 55 percent of respondents citing concerns over cloud security.

While the survey itself did not break out public, private and hybrid cloud models specifically, Skok said business users are getting comfortable with putting more workloads and data into public cloud.  “There is growing familiarity and trust of public cloud because it’s been around long enough and companies have had time to move from test and dev to proof of concept to production deployments,” Skok said.

Cloud security concerns persist

Skok also acknowledged that worry over data security and data sovereignty continue to dog wider adoption, but argued that those issues will mitigate over time. “If you look back to the late 90s, people said they’d never use their credit cards on the Internet to buy things. well, look what happened there.” he said.

Other third-party research backs up these results.  About a quarter of IT execs surveyed by InformationWeek said they plan to use public cloud in a major project this year, compared to 11 percent who run public cloud services now. And JD Power’s 2012 Business Data Satisfaction Study released last month, found that 18 percent of businesses surveyed now use hosted and cloud-based services up from 12 percent a year ago.

Having said that there are still doubts about the cloud. “Look, there will be stuff that will never go to the public cloud, but companies will continue to use the cloud to save money on non-critical compute loads and storage and use those cost savings to help fund internal IT for the truly mission critical stuff, said Joe Coyle, CTO of Capgemini’s North American unit.

Skok said the research also showed the convergence of a few key technologies gaining critical mass in the cloud, in what North Bridge is calling “cloud formations.”

“Nineteen percent of those surveyed said big data and analytics is a key area. When everything become available in the cloud, suddenly every transaction and every click is available for analysis — that is one of the cloud formations,” Skok  said. Others include e-commerce and payments; media and entertainment; social collaboration; and mobile/location.

Expect more discussion of cloud adoption and the remaining impediments to it at this week’s GigaOM Structure event.

12 Responses to “Enterprises to cloud: Ready or not, here we come”

  1. Alex Moon CRM had used a fairly simple to use and intuitive, but to see the difference in SaaS need to try and test the free version. In many known systems working together have free versions, for example on is implemented well. Or you can search for other systems.

  2. Disruptive Dashboard

    If you really ask people they know the hype words “Bigdata” , “cloud” etc. But ask them again, most don’t understand what it is all about.

  3. Security + Control is still an issue with sensitive data, however seems according to this the movement survives.. The media especially, may payout big bucks for information, given the right story. W/out someone right there to power down the document management server, if need be, I am still wary of it. Data Control ….without it you lose.

  4. johnthielensaxway

    Cloud adoption is certainly increasing within the enterprise – in fact, cloud will become the primary operating model for enterprise IT organizations within the next two years. There is still a “worry over data security and sovereignty,” as you poignantly likened to the adoption of online credit card usage. People were completely against this concept in its early stages of adoption, and yet so many of us today do our shopping online. Cloud adoption will continue to increase; it’s just a matter of time. IT buyers want to ensure the safety of their data and thus are putting more pressure on cloud providers to offer more secure cloud environments. By 2016, 40 percent of enterprises will make proof of independent testing a precondition for using any type of cloud service, and this will help ease the worries that inevitably still exist around security (at least for now).

    More on this topic:

  5. There is a distinction between a growing desire to move business-critical information to the cloud, and actually doing so. My company, Infogix, helps enterprises automate the monitoring and analysis of business data to drive improved operations, and a majority of our customers match this survey’s findings: a strong desire to take advantage of the cost-savings cloud computing offers, but few have done so. That presents an interesting strategic dilemma for companies like Infogix: do we develop new solutions today in anticipation of our customers moving more information to public SaaS applications, and try to help them accelerate that process? Or do we wait so we’re not offering a solution even existing customers aren’t ready for? We’ve chosen to offer solutions that span the enterprise (installed versions) and the cloud (SaaS), so our customers can drive improved performance of their operations regardless of whether the systems are within the enterprise or on the cloud.

  6. Deltek

    At Deltek we completely agree that market readiness has finally caught up with cloud capabilities. Many people have said over the years that ERP would never go to the cloud; that has not been our experience. We see professional services firms in all industries and all geographies embracing the cloud for mission critical operations and applications, including ERP. As it relates to security, when the market looks closely at most cloud vendor’s security practices and investments, relative to what they can achieve themselves, this concern evaporates quickly. Especially for small and mid-sized firms, the 24/7, always-on, highly secure, cloud delivery of SaaS ERP provides greater availability, security, access, and performance than they have been able to achieve internally. – Pete Mann, VP, SaaS, Deltek

  7. Daniel

    Seems like many organizations are still struggling with what method is best suited to add additional layers of authentication for access and transaction verification without unreasonable complexity. I’ve noticed many of the major global cloud providers moving to the use of a telephone (mobile or other) as a form of a token where the user is asked to telesign into their account. This should be a prerequisite to any system that wants to promote itself as being secure.

  8. cpreston64

    Great Article Barb, agree with Michale Skok that concerns with data security issues will be mitigated over time. Would be interesting to hear how organizations are mitigating issues/concerns regarding data sovereignty.

  9. Great article that lets companies know it’s important for to recognize the opportunities that cloud computing has to offer, but despite a lot of progress towards the cloud, it’s very important to recognize that security concerns still pose a large threat to the success of cloud computing. For those that have concerns about security, looking into an IT company, such as Mosaic Technology can help calm the doubts. Mosaic provides IT products and solutions that help companies build a secure network for clients.

    Mosaic Technology