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Cloud Computing Set to Go Stratospheric

By CIO Update Staff

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Cloud computing is no longer just a buzzword according to a recent study commissioned by Avanade, a business technology services provider. The Cloud Computing survey shows a 320% increase over the past nine months of respondents reporting they are testing or planning to implement Cloud computing. This, according to Avanade, is the first data that indicates a global embrace of Cloud computing in the enterprise.

The study also found there is little support for Cloud-only models. Just five percent of respondents utilize Cloud-only model. Rather, most companies are using a combination of Cloud and internally owned systems, or hybrid approach.

“For very large organizations, the hybrid approach is logical and prudent,” said Tyson Hartman, global chief technology officer at Avanade, in a statement. “No one is going to rip and replace decades of legacy systems and move them to the Cloud, nor should they. Additionally, at this stage of Cloud computing maturity, not every computing system is appropriate for the Cloud.”

This study is the second large-scale survey of Cloud computing adoption, surveying more than 500 global C-level executives and IT decision makers in 17 countries comparing attitudes from an earlier study this year.

Other key findings in the September 2009 survey show:

More broadly, global companies reporting no plans to adopt Cloud computing have declined to 37% from 54%. The gap between companies planning or testing Cloud computing and those with no plans to implement is shrinking quickly from nine months ago. Companies now planning or implementing Cloud computing have more than tripled to 10% of global respondents.

“It is clear that Cloud computing is not an all-or-nothing proposition. There is an adoption curve that is taking place. Companies are moving to take advantage of the cost savings and flexibility that Cloud computing brings to the enterprise,” continued Hartman.

Online Services Gaining Momentum

Another important finding of the survey is that online services, such as software-as-a-service (SaaS), are quickly gaining acceptance. This online services model is beginning to fundamentally change how IT services are consumed and provisioned in large organizations. More than half of respondents report that they are currently using SaaS applications. In the U.S., that number increases to more than two-thirds (68%).

“For businesses, this trend toward software as a service has distinct business benefits including increased operational elasticity, IT cost reductions and increased connection with various stakeholders,” Hartman said.

While SaaS is making major inroads, nearly one-third (30%) of respondents reported more than a day of business had been lost due to a service outage. Despite that issue, SaaS is seen as a resounding success globally—93% of companies view their experience as successful.

Other key SaaS findings show:

“From our viewpoint—based on the work we’ve done with customers and what the research reinforces—the future of Cloud-based solutions lies in this hybrid approach of using Cloud and internally owned systems. In the same way that email and the Internet have permeated businesses with early resistance, SaaS and Cloud will continue to take hold,” Hartman concluded.

Survey Methodology

The Cloud Computing survey was conducted by Kelton Research, an independent research firm, between August 26, 2009, and September 11, 2009, on behalf of Avanade. The 502 respondents include C-level executives, business leaders and IT decision-makers from 16 countries in North America, Europe and Asia-Pacific.