IBM: Cloud Computing Use to Double by 2015

A new IBM study indicates that enterprise leaders expect the use of cloud computing for transforming business models to double by 2015.

LAS VEGAS€”A recent IBM study showed that the number of enterprises turning to cloud computing is expected to double by 2015.

At its IBM Pulse 2012 conference here, IBM released the findings of its study, which indicated that businesses that embrace the transformative power of the cloud will have a significant advantage in the race to introduce new products and services and capture new markets and revenue streams.

Indeed, to better understand the shift in how organizations use the cloud today and how they plan to employ it in the future IBM, in conjunction with the Economist Intelligence Unit, surveyed more than 500 business and technology executives worldwide. The findings were compiled in the new study, titled "The Power of Cloud: Driving business model innovation."

"Companies are starting to understand€”cloud isn't just about gaining efficiencies and cost savings; it's about driving the kind of fundamental innovation that provides lasting marketplace advantage," said Saul Berman, IBM global strategy consulting leader and co-author of the study, in a statement.

Ninety percent of those surveyed said they are currently using cloud computing or plan to be in the next two years, according to Scott Hebner, vice president of marketing for IBM Tivoli. Yet, increasingly, enterprises are looking to the cloud for significant change.

Although just 16 percent of the executives surveyed said they are already using cloud capabilities for sweeping innovation, such as entering new lines of business or reshaping an existing industry, 35 percent said that by 2015 they intend to use it to transform their business models.

And while a little more than half of the respondents said "improving organizational efficiency" is a top business challenge today, only 31 percent anticipate it will be a top challenge in three years. Instead, the study indicates that their focus is shifting to growth and competitive initiatives in the future.

The objectives cited by survey respondents for adopting the cloud are in line with these business goals, indicating that business needs will soon rival IT motivations for cloud adoption: 62 percent of survey respondents said increased collaboration with external partners is a key objective for adopting the cloud; 57 percent cited competitive cost advantages through vertical integration as a major motivation; and 56 percent pointed to opening new delivery channels and markets as an important objective.

Moreover, examples cited in the report showcasing how the cloud is being tapped to drive new revenue streams and enhance business models include an online marketplace for handmade goods that has taken advantage of cloud computing's cost flexibility to gain access to more powerful analytics online. The company is able to cost-effectively analyze data from the approximately 1 billion monthly views of its Website and use the information to create product recommendations, providing it with access to tools and computing power that might typically only be affordable for larger retailers.

The study also cites an online health information network that enables the exchange of health information and transactions among health care providers, employers, payers, practitioners, third-party administrators and patients in India, IBM said. By connecting more than 1,100 hospitals and 10,000 doctors, cloud computing's capabilities are facilitating better collaboration and information sharing€”helping the network pursue a more collaborative business model and deliver improved care at a low cost.

"Cloud has the power to open doors to more efficient, responsive and innovative ways of doing business, and we believe the companies that will come out on top will be the ones that find ways to leverage it as a key point of differentiation in driving business value," Berman said. "Whether they choose to tap cloud to optimize, innovate or even disrupt their business models, they need to start working on it now."

For more information on the study, go to: www.ibm.com/gbs/powerofcloud.