Over 2016, businesses across the globe have continued to adopt cloud computing as part of their IT infrastructure and this is set to continue into 2017 and beyond. In this article, we’ll give you the heads up on the current trends in cloud computing and show you what’s likely to be in store in 2017. For those companies that haven’t considered using the cloud yet, what you read here might make you change your mind.
1. Businesses investing more in the cloud
According to the IDG’s 2016 Enterprise Cloud Computing Survey, investment in cloud computing is set to continue its upwards trend during 2017 with US companies planning to spend an average of $1.77M on the cloud and companies in Europe and the rest of the world spending $1.3M. For larger companies, with over 1000 employees, the average figure is $3M. Of those large companies, one in ten will spend at least $10M just on apps and platforms.
It is also predicted that 2017 will see companies spending 28% of their IT budgets on cloud computing. Most of this, 45%, will be spent on Software as a Service (SaaS) with a further 30% on Infrastructure as a Service (IaaS). In addition, companies will spend 19% of their cloud budgets using Platform as a Service (PaaS) for development.
2. Most companies using cloud to run apps
Cloud computing is fast becoming the standard way for businesses to run apps. At least 70% of all organisations have a cloud run app (up from 51% in 2011) and for larger organisations, the figure is even higher (75%). Indeed, by 2020 the prediction is that 90% of all organisations will be running cloud apps.
2017 will see the adoption of cloud applications accelerate and expand, with a far wider range of apps being available to use. It is estimated that by the end of the year, most IT departments will have the majority of their apps and platforms (60%) on cloud systems.
3. Companies moving more services to the cloud
IDG asked companies how they will develop their reliance on cloud computing over the next 18 months, with some surprising results. At the moment, the average company runs 45% of its operations in the cloud (23% private cloud, 15% Public Cloud and 7% hybrid cloud). In 18 months those companies plan to increase reliance on the cloud to 60% (28% private cloud, 22% public cloud and 10% hybrid cloud). This tells us that not only are companies pushing more and more of their environment to the cloud but that, increasingly, they are favouring public cloud as the place to go.
The other thing we learn is that businesses are starting to use using multiple cloud models to meet differing IT needs. Currently, 62% of companies use private cloud, 60% use public cloud and 26% use a hybrid.
4. Data becoming the key driver of cloud adoption
Big data analytics is fast becoming a critical tool and businesses, big and small, are seeing the huge benefits that the cloud has to offer in this area. Larger companies can make enormous savings by migrating to a cloud network whilst, for smaller businesses, the cloud offers them the opportunities to compete with larger enterprises on a level playing field.
For this reason, big data analytics, data storage and data management are the main reasons why businesses are adopting cloud technology. 43% of companies cite these as their main reason for migration during 2017 (22% for analytics and 21% for storage and management).
5. Who is spending the money?
There is a difference between large and small organisations when it comes to who controls the budgets on cloud adoption. In enterprise sized organisations, the spending is driven by chief information officers, IT architects and the IT networking management. In small and medium sized businesses, the push for cloud investment and spending is being made by chief executives, chief financial officers and chief information officers. The reason for this could be that SMBs don’t have in-house architects to push for cloud adoption or because IT staff aren’t given the authority to spend the budgets without having to bring it before more senior officers first.
Perhaps one of the biggest differences is the influence of the chief IT security officer. This person has influence over cloud IT spending in 80% of enterprises but only 59% of SMBs. With security, such an issue across the board, it looks like senior management is listening to security concerns much more in bigger companies than smaller ones.
6. Concerns that hinder cloud adoption
Whilst cloud adoption is on the rise and many companies are benefitting from it, some companies still have reservations about using it. From their survey, IDG found that the main concerns amongst companies were issues with where data is stored, cloud security and vendor lock-in.
The issue regarding where data is stored is fired by some governments’ insistence that they should have access to data stored on servers within their borders. For example, if a UK company had sensitive data stored on a server based in the US, it may be breaking EU regulations on privacy. This, obviously, may prevent a UK business choosing a vendor with US based servers. For this reason, many expect that companies will move towards a localisation model in the next year with many businesses choosing cloud vendors based within their own country.
When it comes to cloud security, cloud vendors generally have better security in place than in-house data centres. They have to meet robust standards and have the expert IT staff in place to ensure consistent monitoring and defence. In addition, their use of up to date hardware and software means they are less likely to be vulnerable to the security holes found in data centres that use legacy software and older hardware.
With regard to vendor lock-in (the over-reliance on a vendor’s infrastructure and management), the advice is to rethink how you manage your IT. Companies do need to use the cloud and they do need the IT services that cloud vendors bring. To prevent being tied to any one vendor, they just need to develop the in-house skills needed to manage their own cloud system.
Indeed, this lack of in-house skills is also one of the problems that prevent many companies adopting private or hybrid cloud computing. In the next year, as more companies begin to see that cloud adoption is more of a when than an if, it is likely we’ll see a rise in IT spending on training to develop these skills.
A few years ago, moving to the cloud was seen as something which could give a company an advantage over those which had not. It is no longer seen in that way. Today, it’s pretty much indispensable and those who don’t have it are seen as disadvantaged. Over the next year, cloud adoption is going to increase even more. More companies are going to use it, and those that already use it are going to increase their reliance upon it.
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