Cloud Computing Set to Go Stratospheric

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:

• The worst recession in decades has had little impact on the implementation of Cloud computing. More than 70% of companies report the economic downturn has either helped (13%) or had no effect (58%) on efforts to implement Cloud computing.
• Companies are under equal pressure to innovate and save money and many are turning to new technology to do this. The vast majority of respondents (85%) report that their company’s rate of new technology adoption is either increasing or staying the same (83% in the U.S.).
• In the U.S., companies are embracing Cloud computing at a higher rate, despite a more cost-conscious mindset. More than 23% of U.S. companies are beginning to plan and test the use of Cloud computing (compared to 10% globally).

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:

• The majority of respondents have been using SaaS for a year or less (60%).
• Globally, there is a 2:1 ratio of respondents who prefer SaaS delivered internally (or as private services) versus from third-party service providers. There is an even greater disparity in the U.S., with a 4:1 ratio in favor of internal SaaS deployments.
• Although the technology may be new to most users, one-third report using three or more SaaS providers.
• Nearly two-thirds of respondents (more than 62%) are looking to increase their use of SaaS over the next year.

“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.