2011 in the Cloud: The Year of Managing Expectations

A. DeCarlo
A. DeCarlo

Summary Bullets:         

  • While most businesses are still experimenting with on-demand services, Current Analysis research shows the vast majority of those using the cloud today are happy with their experience.
  • Positive cloud experiences bode well for future growth as market acceptance of cloud services rises and solutions mature.

2011 has been a banner year for IT services.  As organizations continue to explore their alternatives to traditional outsourcing models, IT solution providers have been evolving their strategies to support the expected rise in on-demand services.   Acquisitions such as CenturyLink’s multi-billion dollar deals for Qwest and Savvis, Dimension Data’s OpSource purchase, and Verizon’s Terremark and CloudSwitch buys, among others, are changing the market landscape for cloud services.  

The net impact of the acquisitions on the on-demand market segment may not be known for some time.  There is a sense that, for all the intense interest in all things cloud, most enterprises are actually still very much in exploratory mode with respect to on-demand services.  Companies may be willing to move to Salesforce.com, or to use on-demand computing service for storage backup or test and development, but massive corporate migration to the cloud is still years away (if it ever happens).  Current Analysis’ 2011 survey of North American companies’ cloud adoption plans found that 51% of the respondents currently using cloud services rely on these services to support 10% or less of their IT needs today.

The proportion of IT needs met through the cloud will increase in the near term, with the majority of companies expecting that by 2013 they will use the cloud to support between 20% and 50% of their IT  needs.  However, the relatively slow growth in early enterprise cloud adoption has also produced backlash from doubters who suggest the model is not now, and may never be, ready for prime time.

While it is early days for most enterprises in the cloud and there is room for maturation of on-demand services, it is too early to dismiss the model as either overhyped or a disappointment.  In fact, indications are that activity in the cloud is poised to ramp up dramatically in the coming years.  The economic and efficiency arguments are too compelling for cloud services to fail.  In Cisco’s recently published Global Cloud Index, the vendor projects that by 2014, more than 50% of all workloads will be processed in the cloud.  While only time will tell whether reality will live up to projections, current experiences with on-demand services are going well, which bodes well for future cloud adoption.  Of the North American cloud users queried by Current Analysis, 81% described their experience as good, very good, or excellent. 

What do you think?  Is the cloud coming into its own as our research suggests, or is the relatively slow pace of implementation an indicator of future issues?

What do you think?

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