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Given how much hype cloud computing is getting right now you would think there is an abundance of proven results. Ironically, there are not. While there are many success stories from vendors, the fact remains that it is very difficult to isolate the impact of a single technology investment on business strategy results.
I can buy the fact that cloud computing can increase the speed and accuracy of communication, and can enable channel partners to be more informed through CRM applications for example, yet I cannot buy the success stories of double-digit increases in Net Income due to this technology alone. Too implausible, as Net Income is affected by many more factors than just a technology decision. It’s time for vendors to get real and show the good and the bad if they are going to help make cloud computing more credible.
Why Cloud Computing Needs to Earn Trust through Results
It is no surprise that many CIOs and CEOs are skeptical of cloud computing and its many applications are slow to trust it; there just are not enough data points yet.
Vendor-speak, if you will excuse the pun, clouds the market and make it even more confusing.
More independent surveys of what is actually going on with cloud adoption need to be done by impartial firms who are independent of vendors. Questions including what companies are really using it for, how they chose one process over another to automate using cloud-based technologies, how the dealt with security issues, and the specifics of the Service Level Agreements (SLA) need to be discussed far more openly.
When surveys are done, they often deliver conflicting results however. Ray Wang, Partner of Altimeter Group in his blog, A Software Insider’s Point of View has a great post that is worth reading on this topic titled Research Report: How SaaS Adoption Trends Show New Shifts in Technology Purchasing Power.
With these points in mind, the recent release of the report From Hype to Future: KPMG’s 2010 Cloud Computing Survey is provided below. This is a report out of KPMG Netherlands, and has a relative small sample size of 125 decision-makers and business managers. KPMG does not disclose if these are clients or not, yet does provide in the appendix two tables showing distribution of respondents by organization size and sector. The majority of the respondents are in organizations with more than 5,000 computer users (42%).
Here are selected highlights from the report:
- 59% agree that cloud computing is the future of IT in their organizations.
- 45% of the respondent organizations are using cloud computing today and 13% expect to adopt cloud computing within the next 12 months (survey was completed in March and April 2010).
- SaaS is the most common form of cloud computing used (72%) and 7% have private clouds today.
- Application hosting (39%), data storage (32%) and e-mail/messaging (29%) are the three most common cloud-based applications in use as of May, 2010.
- 77% cite greater flexibility and elastic computing potential of cloud computing, cost savings (75%), and better scalability (64%) as being the three dominant drivers of their adoption of cloud computing.
- 76% cite security as the greatest obstacle to getting cloud computing adopted in their companies, followed by legal issues (51%), with compliance and privacy (50%) being the third most mentioned obstacles to adoption.
Bottom line: Understanding how cloud computing makes business strategies more effective, focused, and results-driven is the missing link. Vendors need to step up and deliver real data, not just stacks of diagrams and theoretical discussion if they are ever going to earn trust.