Cloud services surge but spending stays small…September 3 - 10am
Although the use of cloud services is growing faster than the overall enterprise IT market, it is still a small part of overall IT spending.
A recent Gartner survey on the future of IT services found that only 38 percent of all organisations surveyed indicate cloud services use today.
Yet, 80 percent of organisations said they intend to use cloud services in some form within 12 months, including 55 percent of the companies not doing so today.
“Given that the use of cloud services currently constitutes only a very small part of the vast enterprise IT market, strategic planners should not make the mistake of taking current cloud use cases to be predictors of future cloud use,” says Gregor Petri, research director, Gartner.
“Cloud computing is set to have a considerable impact on business in the future which is reflected in the survey finding that around 60 percent of organizations plan increased investment over the next two years to five years, while only 6 percent plan to decrease investments in cloud services.”
Petri highlights three key factors that will significantly impact enterprise cloud use in the near to midterm future.
The first of these is the fact that the road to increased cloud usage will be through tactical business solutions addressing specific problems, not through broad, strategic infrastructure replacements.
Today’s cloud market is still very much formed by early adopters and innovators addressing specific use cases.
Market adoption of high-tech services and solutions typically does not develop from early adopters to the majority market in a straight line, and also for cloud computing we will see distinct differences in how the next wave of buyers will adopt new solutions.
A second factor that Gartner believes will influence cloud uptake is the reality that the business impact of cloud services increases as they continue to move up the cloud services value chain, from infrastructure services to business process services.
“While rehosting, recoding or recompiling existing applications to run on infrastructure as a service (IaaS) or platform as a service (PaaS) cloud services may have limited impact on the rest of the organization, replacing existing applications with higher level cloud services will have a much bigger impact on the way enterprises organize their business processes to serve their customers,” Petri says.
“The impact becomes even larger once companies start to explore the new possibilities cloud services offer to reimagine the way they service their customers.
“This reimagining can entail replacing traditional offerings with completely digital services and products.”
The final factor impacting enterprise cloud use is that the introduction of cloud solutions will lead to a more diverse solution portfolio with widely varying implementation and migration timelines.
Individual applications can be rehosted to run on IaaS, recoded or recompiled to run on PaaS, replaced with corresponding SaaS applications or the business process can be resourced altogether.
The life cycle of these cloud services can vary from months to decades with implementation timelines being impacted by several factors including the availability of alternatives, the degree of business criticality, and the complexity of the workloads.
The market potential of the use case is also an important factor. In some cases, highly critical and complex applications may actually be the first to be moved to cloud computing, especially if those applications are broadly used and thus form an attractive provider opportunity.
This wide variety of timelines and approaches leads to a complex reality, with many different resource requirements, benefits profiles and potential outcomes, all needing to be individually planned, managed and monitored.
This, in turn, makes cloud computing a quickly developing field with many unknowns and uncertainties and little shortcuts of silver bullets.
Gartner conducted a survey of 651 organisations across nine countries to understand end-user organisations’ use of external service providers for IT services.
The objective was to better understand how organisations are shifting from the use of traditional technology products to new technology delivered as cloud services.