Cloud Adoption Goes 'Way Beyond' Infrastructure

Enterprises are turning to cloud providers that offer more than hosting infrastructure services, according to a Microsoft-sponsored study from 451 Research.

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The cloud computing market has evolved, offering more opportunities for vendors that venture beyond providing the essentials of getting business clouds off the ground.

A Microsoft-commissioned survey (PDF) of 1,700 hosting and cloud customers worldwide conducted by 451 Research reveals that in terms of IT spend, 70 percent of the opportunity for cloud providers now centers around application hosting, managed data services like backup and disaster recovery, and security. The results show that IT organizations are seeking cloud solutions that go "way beyond [their] infrastructure needs," Aziz Benmalek, general manager of Microsoft's Hosting Service Provider unit, told eWEEK.

Demand is particularly acute in the managed services arena, where cloud providers can generate more business by delivering custom integrations, disaster recovery and service-level agreements that are "tailored toward the customer needs," he added.

Over 75 percent of current cloud customers have a firm footing on the cloud, according to Benmalek. With the cloud discovery phase out of the way, those organizations expect to place nearly half of their applications in a combination of private and cloud setups, providing cloud data center operators with some potentially lucrative new revenue streams.

Despite growing confidence in implementing cloud-based IT services, enterprises are still looking for a helping hand, said Benmalek. "Customers are ready for the cloud, and moving [in that direction], but they want to walk before they run. They need a personal trainer."

Hybrid cloud adoption is also picking up steam, with 63 percent of respondents exploring a combination of on-premises and hosted private clouds. Forty-five percent said they were at least in the evaluation stage of an on-premises private cloud deployment backed by the public cloud.

451 Research Senior Vice President Michelle Bailey remarked in a statement that hybrid clouds "are becoming the norm for customers." But merely expanding one's data center footprint and providing basic cloud computing capabilities is no longer enough in this competitive market.

"Trust, uptime, security, performance and technical expertise are today's differentiators for a business-ready cloud. It's not just about having data centers everywhere at the lowest price," Bailey said. "Providers need to build a business that aligns to who they are as a company and who they are supporting."

The research also revealed that IT managers are increasingly ceding their cloud decision-making responsibilities to the C-suite.

Chief information officers (CIOs) and chief technology officers (CTOs) are leading their companies' transition to the cloud. Combined, 52 percent of organizations said their CIOs and CTOs are the primary decision makers when evaluating hosting and cloud providers.

Interestingly, chief executive officers (CEOs) aren't too far behind. Forty-four percent of respondents said that their CEO gave their cloud initiatives the final stamp of approval. Chief financial officers (CFOs) also exert some pull with over 20 percent, followed by chief marketing officers (CMOs).

IT infrastructure managers aren't out of the picture, however. They cling to their role as cloud decision makers in more than 30 percent of organizations.

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...