Businesses Have Tough Decisions To Make About Cloud Computing

A survey of attendees at a cloud computing conference this week in Silicon Valley shows that, despite ongoing concerns about what approach to take to the cloud, IT professionals and business executives know they have to adapt to the new technology. While debate continues about whether to adopt the private or public cloud model, or some hybrid, those attending the Cloud Leadership Forum 2011 say that by 2015, cloud will no longer be a concept but the status quo.

The 225 people who responded to the survey--including IT and business executives, industry analysts and news media registered for the conference--were asked to evaluate 46 purported cloud predictions and check “yes” or “no” as to whether they thought each would come true. Sixty-five percent answered yes to the prediction that the success of cloud computing will ensure its demise as a concept by 2015, meaning cloud has become a standard component of enterprise sourcing strategies; 24% said no. While that indicates strong industry acceptance of cloud computing, there is still debate about what cloud strategy to pursue today.

While 62% of respondents agree that between 2011 and 2014, most CIOs will deploy only non-mission-critical apps in the public cloud, 81% agreed that by 2015, at least 30% of Fortune 1000 enterprises will deploy at least one business-critical system in the cloud.

It may also turn out that most enterprises will themselves become cloud service providers before too long, says Richard Villars, VP of storage and IT executive strategies at IDC. Private clouds are developing within organizations in two ways, Villars says: clouds designed to streamline IT, consolidate systems and save costs; and clouds designed to develop new services to deliver to customers as a cloud service.

“Most of the interesting things, even inside corporations, are new applications, and in a sense that private cloud becomes a public cloud for somebody else,” Villars says. “What’s happening is those creators of private clouds are becoming a cloud service provider. Today they see themselves as a law firm; tomorrow they discover they’re an e-discovery analytics firm.”Discussion at the two-day conference in Santa Clara, Calif., also centered on what may be the next phase in the evolution of cloud computing--the emergence of the cloud service broker. The prediction that brokers will emerge as powerful industry players by 2015 was supported by 79% of respondents.

Like real estate brokers or mortgage brokers, cloud service brokers will serve as middlemen between a provider of cloud service and a consumer, says Villars.

"A number of system integrators and professional services firms are recognizing that, for some of their customers, they are looking for someone to be a broker to go to Salesforce.com or go to [Microsoft] Azure and put together the combination for them," he says. "They don’t actually own anything, so they are really just setting this [deal] up and taking a cut."

As cloud computing gains traction in the market, the cost savings, agility, scalability and other benefits will finally free up IT staff for pursuing innovation, says Frank Gens, senior VP and chief analyst at IDC. According to IDC research, CIOs spend only 24% of their time today on business improvement and innovation--the rest is spent supporting current operations. Their goal, the research says, is to raise the time spent on business improvement and innovation to 54% in five years.

"Cloud will allow them to focus on adopting new technology services that will give them competitive differentiation and go-to-market strategies," Gens says.

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