Opportunity Lies in Knowing the Trends

As IT budgets remain flat, demand for improved agility, lower costs and more efficiency continue to reach skyward. At the same time, the demand for cloud computing is growing.  And why not?  

In a world where on-site environments are limited by expensive site-specific applications, data storage averages 30 to 40% and server utilization reaches a mere 10-15%, it’s easy to see why the demand for cloud-based services is on the upswing. Cloud services are projected to grow more than 27 % each year until 2014, or five times the projected growth for traditional IT.

Once a company goes through the effort of virtualizing its IT infrastructure they gain many advantages. For instance, they have the ability to pool their computer, network and data storage with others to smooth out fluctuations in their IT requirements. Going to the Cloud also reduces hardware acquisition costs and reduces staffing, power needs and space requirements.  Operating in the Cloud also offers improved standardization and resource allocation as well as operational efficiency when it comes to IT automation.

In a recent survey of IT decision makers, IDC reports that 44% indicated that they were considering implementing a private cloud (a private cloud remains within the company firewall to meet internal customer needs.)

IDC also predicts that 69% of all workloads will be virtualized by 2013. Virtual machines will also rise from 6 VM per physical server in 2009 to 8.4 in 2013.

The Cloud Two Years Out

Right now about half of an IT department’s budget goes to traditional IT according to the IDC, with 16% being outsourced and the remaining 35% going to public and private clouds. Two years from now, the percentages change significantly. Traditional IT drops to 37%, outsourced IT stays the same, but the cloud jumps to 47%.

Gartner predicts that 33% of business intelligence functionality will be consumed via handheld devices, while 15% of Bbusiness intelligence deployments will combine business intelligence, collaboration and social software into decision-making environments. By 2014, 30% of analytic applications will use in-memory functions computational speed and scale. About 30% of analytic applications will use proactive, predictive and forecasting capabilities. Amazingly, 40% of business analytic spending will go to system integrators rather than software vendors.  All of the above however will depend on security and compliance capabilities in the Cloud. For this reason, the largest cloud growth will come in hosted and in-house private clouds where security is easier to control. 

Satisfying the Demand

Right now, cloud computing users and vendors are busy pointing a finger at each other when it comes to responsibility for data security--each saying the other has primary responsibility for taking charge. According to a recent Ponemon survey 69% of cloud providers think that users should be responsible for their own security.

With confusion comes opportunity.  MSPs who can automate compliance and deploy new customized compliance and security services based on a range of unique client needs as they move to the Cloud will do well.

It’s important to understand that the Cloud is not a technology that operates on its own. Rather, it’s a business and delivery system enabled by existing technologies that allows remote operation as well as fractional and on-demand use. Providers must decide where they fit in this new land of opportunity. The coming trends in cloud computing will put customers at the center of application and technology decisions. Providers who correctly identify enterprise needs over consumer needs and then execute those needs in the Cloud are most likely to succeed. Traditional IT and software providers will need to plan ahead and go carefully as they protect their traditional business while growing the Cloud business. For many it will mean acquiring new technologies or forming partnerships with firms that have those technologies.
           
Likewise, the Cloud brings with it, new operating considerations for the channel.  Sales should focus on business decision-makers, rather than IT operations people. Emphasis should be on supporting end-users with an emphasis on smooth business processes, new value-add and new, rapid deployment business solutions.