Cloud Computing – Adoption in the USA

Forbes Business has just published an interesting review of the “IDG Enterprise Cloud Computing Study 2012“, looking at the adoption of Cloud technologies by enterprises (i.e. companies) in the USA. Being that the USA have been leading development and adoption of Cloud technologies, it paints an interesting picture of the future for cloud adoption here in the in UK.

 

In summary, it found that 69% of companies in 2014 either have applications or infrastructure running in the cloud today, up from 12% in 2012. Of specific interest to us are the following key concerns voiced by IT leaders in these organisations:

  • The three biggest disconnects holding cloud-based infrastructure back from greater adoption from an IT senior management perspective includes concerns about security (61%), integration challenges (46%) and information governance (35%).
  • IT leaders perceive that line-of-business leaders are most concerned about security (52%), difficulty measuring Return on Investment and determining the accurate economic value of cloud solutions (37%) and a tie between information governance and cloud-based applications being able to meet enterprise and/or industry standards (32%).

 

When asked about current versus future plans, the following scores were recorded for current vs planned future adoption of Cloud technologies for core finance applications:

 

Enterprise Resource Management (ERP):

  • 17% currently migrating
  • 14% planning to migrate in the next 12 months
  • 11% planning to migrate in the next 1-3 years
  • 59% have no plans to migrate

 

Business/Data Analytics:

  • 20% currently migrating
  • 16% planning to migrate in the next 12 months
  • 19% planning to migrate in the next 1-3 years
  • 44% have no plans to migrate

 

Data Storage/Management

  • 28% currently migrating
  • 19% planning to migrate in the next 12 months
  • 18% planning to migrate in the next 1-3 years
  • 34% no plans to migrate

 

Click here for the full Forbes review of the IDG survey (opens in a new page).

Click here for the actual IDG Enterprice Cloud Computing Survey (opens in a new page).

 

Using the Cloud as a Platform for Growth

A very interesting and informed discussion took place between Gary Simon (managing editor of Financial System News) and Michael O’Brien (General Manger of Financial Applications at FinancialForce.com) a few weeks ago about how businesses can transition to the Cloud and exploit the power of the ‘platform’ approach for innovation, scalability and collaboration as well as perfecting their processes. Some points and thoughts:

 

We are seeing a global economic revolution in consumer and customer buying habits.  More than 50% of sales are transacted through mobile devices, and accelerating. Cloud technologies are not leading this change, but they are enabling it.  The global economic recovery is being driven by smaller fast-growing businesses that are embracing this change and using new technology to out-compete with larger and more established companies.

 

Cloud applications offer significant advantages in scalability, cross-application connectivity, and real-time access to information.  They are also (and perhaps most importantly) bring customers and suppliers closer to the heart of their business. Embedding Cloud technologies into the fabric of a new business, unencumbered by pre-existing infrastructure, is far easier than for large companies that will have to integrate it into (or replace) existing infrastructure.

 

Smaller businesses have a huge competitive advantage:

  • No pre-existing infrastructure with a blank canvas for systems and process design.
  • Cloud ‘pay as you use’ offerings are scalable with usage cost increasing on a variable basis, significantly reducing the up-front capital strain.
  • Their business models are in many cases already internet and/or mobile based, with a management culture that already embraces new generation technology.
  • As early adopters, they may already have gained the competitive market advantage when the big existing companies finally decide that “the water’s now safe to enter”.

 

Big business options?

  • Evolve or die? Is having an established brand name, reserve capital and a track record enough?
  • Traditional software providers are already rolling out cloud offerings, paired with their existing applications, making the transition easier and reducing risk.
  • Consider incremental adoption, adding value-adding client interfacing applications first (i.e. CRM), before moving to back office applications.
  • Solve existing process problems first. Building new infrastructure efficient upon a streamlined and efficient base is far easier and less costly than fixing existing problems parallel to a building a new environment.

 

Challenges in the Cloud

  • Security issues around hosted data and access to that data. Both real and perceived.
  • A rapidly growing range of vendors and offerings to choose from, so who do you choose?
  • At what point does a company decide (or realise) that it’s ‘now or never‘ time?
  • Do businesses have the necessary appetite for change required to take the big bang step and overhaul their entire systems architecture?
  • When evaluating offerings, does a business choose the application, vendor, or hosting platform?
  • Objective evaluation: every vendor will naturally tell you that their product is “the one”. Finding informed partners to help you choose your next step is itself a challenge….

 

Click here to go to the FSN website and watch the 30 minute webinar-based interview.