Microsoft’s latest study shows enterprises’ pace of cloud computing adoption continues to accelerate. Nearly half of the respondents (45%) report they have cloud-based applications running in production environments. 58% report that they selectively target new applications and projects for cloud computing.
Microsoft commissioned 451 Research to complete one of the most comprehensive global surveys to date of hosting and cloud computing, titled Hosting and Cloud Go Mainstream releasing the results earlier this month. The 74 page slide deck of results provides a wealth of insights into the current and future state of hosting and cloud computing. 451 Research constructed the methodology to include interviews with 2,000 companies and organizations of all sizes from 11 countries, with more than a third of respondents coming from the United States. Microsoft and 451 Research provided the slides showing the result of screener questions, which provides a useful context for analyzing the survey results.
Here are the key take-aways from the study:
45% of enterprises globally are running production-level cloud computing applications today. North America and Asia have the greatest percentage of enterprises reporting broad implementation of production cloud-based applications (17% each). North America has the greatest percentage of enterprises in the discovery and evaluation phase of cloud computing adoption at 29%.
58% of global enterprises are selectively target new applications for cloud computing, with 18% heavily relying on cloud computing for new projects. The following graphic shows the distribution of organizations’’ approaches to using cloud computing for new applications or IT projects.
SaaS (71%) and Hosted Infrastructure Services (69%) are the two most common IT services currently purchased today, with 14% growth forecasted in each by 2016. The fastest growing category is Platform-as-a-Service (PaaS), with 37% purchasing these services today projected to grow another 26% in two years.
SaaS is most prevalent in enterprises with over 500 employees, and Hosted Infrastructure Services, in government and education. Please see the graphic below for the distribution of responses by IT service and organization type.
Spending on hosted private clouds will increase from 28% of spending today to 32% in 2016, with traditional dedicated infrastructure services dropping from 48% to 42%.
The majority of SaaS users are employees (45%) followed by businesses (which could be interpreted as suppliers and the broader supply chain) (22%), consumers (18%) and business partners (including distribution channels (14%).
Telephone conversations with customer support specialists is the most valuable form of communication (just over 60%) across all support channels. It is also the most preferred channel for SaaS support.
Business applications (17%), databases (14%) and e-mail 12%) are the top three application spending categories today in hosted and cloud applications. The following graphic breaks out spending by hosting and cloud configuration.
Having a well-defined architecture for security (7.7 out of 8.0), understanding who the end-users are (7.6) and train users to be cautious with access & security (7.5) in addition to having a well-defined architecture for performance (7.5) are the three top best practices for cloud computing projects.
44% of enterprises globally have “shadow IT”, meaning business units are spending their own budget on cloud computing projects outside of the IT approval processes. The following graphic provides the breakdown by type of organization included in the survey.
87% of respondents globally would recommend cloud computing to a peer or colleague and 13% would not. When asked why or why not, respondents most often mentioned a good experience and better service/it works (approximately 17%), followed by improving costs/cost effective/cheaper (approximately 16%). Security issues and concerns (25%) and uncertainty/it’s too new (approximately 16%) are the reasons for not recommending cloud computing.
CIOs in high performance enterprises are increasingly seeing the world much more like their CEO counterparts. Both are now focusing more on how cloud computing can improve customer engagement and operational performance while anticipating market and macro-economic factors. IBM’s study provides a glimpse into their Institute for Business Value’s 1,600 face-to-face conversations with CIOs from 70 countries and 20 industries worldwide.
Here are the key take-aways from the report including an infographic summarizing key points of the study:
Cloud computing has rapidly accelerated from 30% of CIOs mentioning it as a crucial technology for customer engagement in 2009 to 64% today.
67% of CIOs IBM interviewed are actively looking into how cloud technologies can better serve and collaborate with customers.
84% of CIOs are focusing on mobility solutions to support closer customer engagement, 83% are evaluating business analytics and optimization and 64%, cloud computing. The following graphic shows a comparison of how priorities have changed between 2009 and 2013.
CIOs in outperforming enterprises are nearly twice as likely as their peers (59% versus 31% for underperformers) to have a cohesive strategy for uniting the digital and physical elements of their businesses. One respondent CIO from a banking firm in The Netherlands stated that “We want to create an integrated, 24/7 customer experience across channels and services.” The following infographic summarizes key points of the analysis.
Cloud-related tech spending by businesses is forecast to triple from 2011 to 2017 according to IHS Technology. By 2017, enterprise spending on cloud computing will amount to a projected $235.1B, triple the $78.2B spent in 2011 according to the research firm’s analysis. In 2014, global business spending for infrastructure and services related to the cloud will reach an estimated $174.2B, up 20% from the amount spent in 2013. Source: Cloud- Related Spending by Businesses to Triple from 2011 to 2017.
Centaur Partners predicts that total SaaS revenue will shift from just over 10% of the total enterprise software market in 2010 to just over 16% by 2015, and predict that SaaS and cloud-based business application services revenue will have grown from $13.5B in 2011 to $32.8B in 2016. The following graphic is from their latest SaaS Market Overview presentation.
Bain & Company predicts that direct spending on hardware, software and services could top $70B by 2017 based on the proliferation of the Internet of Things (IoT). The research brief, Is your company ready for the Internet of Things? predicts that companies that can capitalize on mobility, analytics and cloud computing will have the highest probability of success. Bain & Company also presented their taxonomy of market growth by enterprise spending category below, projecting software and applications will generate $180B in sales by 2017.
IDC is predicting that the cloud software market will surpass $75B by 2017 attaining a five year compound annual growth rate of 22% in the forecast period. IDC also found that current organizations using the cloud expect to spend 53.7% of their IT budget on cloud-based applications and platforms in the next 24 months. Major benefits of the cloud for IT operations include reducing the size of the IT budget, improving IT staff productivity, and simplifying and standardizing IT infrastructure. For other departments, benefits include improved resource utilization, enabling business units to control IT solutions more directly, and launch revenue generating services faster with more efficient time-to-market strategies. These findings are from the Cisco infographic based on IDC research data titled Midsize Enterprises Leading The Way With Cloud Adoption.
2014 continues to be a year marked by the accelerating hiring cycles across nearly all cloud computing companies.
Signing bonuses of $3K to $5K for senior engineers and system design specialists are becoming common, and the cycles from screening to interviews to offers is shortening. The job market in the cloud computing industry is leaning in favor of applicants who have a strong IT background in systems integration, legacy IT expertise, business analysis and in many positions, programming as well.
One of the most common questions and requests I receive from readers is who the best companies are to work for. I’ve put together the following analysis based on the latest Computer Reseller News list The 100 Coolest Cloud Computing Vendors Of 2014.
Using the CRN list as a baseline to compare the Glassdoor.com scores of the (%) of employees who would recommend this company to a friend and (%) of employees who approve of the CEO, the following analysis was completed. You can find the original data here . There are many companies listed on the CRN list that don’t have than many or any entries on Glassdoor and they were excluded from the rankings below. You can find companies excluded here. If the image below is not visible in your browser, you can view the rankings here.
The highest rated CEOs on Glassdoor as of February 23rd include the following: