While their motivations vary, businesses of all sizes, industries, and geographies are turning to cloud services. Spending on cloud computing infrastructure and platforms will grow at a 30% compound annual growth rate (CAGR) from 2013 through 2018 compared with 5 percent growth for overall enterprise IT.
Numerous factors are driving cloud adoption, according to a study conducted by the market research company Vanson Bourne. “The Business Impact of the Cloud” report compiles insights from interviews of 460 senior decision-makers within the finance functions of various enterprises. The report summarized 11 drivers of cloud adoption along with quantifiable improvements these companies have achieved by deploying cloud services to improve productivity, lower cost, and improve time to market.
Advantages
Fresh Software: With SaaS, the latest versions of the applications needed to run the business are made available to all customers as soon as they’re released. Immediate upgrades put new features and functionality into workers’ hands to make them more productive.
Do more with less: With cloud computing, companies can reduce the size of their own data centers — or eliminate their data center footprint altogether. The reduction of the numbers of servers, the software cost, and the number of staff can significantly reduce IT costs without impacting an organization’s IT capabilities.
Flexible costs: The costs of cloud computing are much more flexible than traditional methods. Companies only need to commission – and thus only pay for – server and infrastructure capacity as and when it is needed. More capacity can be provisioned for peak times and then de-provisioned when no longer needed.
Always-on availabilityMost cloud providers are extremely reliable in providing their services, with many maintaining 99.99% uptime. The connection is always on and as long as workers have an Internet connection, they can get to the applications they need from practically anywhere. Some applications even work off-line.
Improved mobility: Data and applications are available to employees no matter where they are in the world. Workers can take their work anywhere via smart phones and tablets—roaming through a retail store to check customers out, visiting customers in their homes or offices, working in the field or at a plant, etc.
Improved collaboration: Cloud applications improve collaboration by allowing dispersed groups of people to meet virtually and easily share information in real time and via shared storage. This capability can reduce time-to-market and improve product development and customer service.
Flexible capacityCloud is the flexible facility that can be turned up, down or off depending upon circumstances. For example, a sales promotion might be wildly popular, and capacity can be added quickly to avoid crashing servers and losing sales. When the sale is over, capacity can shrink to reduce costs.
Less environmental impact: With fewer data centers worldwide and more efficient operations, we are collectively having less of an impact on the environment. Companies who use shared resources improve their ‘green’ credentials.
Limitations
Regulations: Depending on your industry sector, vertical market, or geographical location, you may have to abide by an array of government regulations determining how you use and store sensitive data. The healthcare and financial services industries are common examples of verticals in which IT has to take extra steps to prove to the government that sensitive data is secure. And, in some cases, that means keeping sensitive data stored in private data centers.
Security: One can make the case that cloud security has surpassed the security measures at most private data centers. But certain companies are dealing with data that requires more advanced security than what cloud providers can offer. Or perhaps, the executives in the IT department simply feel more comfortable shouldering the risk themselves. In either case, security can be a legitimate determining factor in choosing to store data and apps on premises.
Visibility: Do you really know where your data is? That's one question that continues to haunt early adopters of public clouds. The fact is, once sensitive data is moved or generated on a public cloud, it becomes very difficult to see exactly where the data resides. Eventually, technology will overcome these cloud visibility hurdles. Until then, this is a very real concern for many of the IT professionals I speak with on a regular basis.
Accessibility: In a perfect world, all users in all locations around the globe will have high bandwidth and unfettered access into any of the various public cloud providers with which you choose to partner. We're not quite there yet. The issue is especially problematic when you are operating a global company with remote sites in multiple countries. Access to cloud resources can become a problem due to bandwidth constraints at the last mile. Another factor to consider is situations in which certain countries restrict access to all sorts of Internet content. In such cases, accessibility using private WAN connections to private data centers can be more reliable and consistent compared to using public cloud offerings and relying on the Internet as your primary access method.
Latency: Latency within private data centers and across private WAN connections is easily controllable. On the other hand, when you are leveraging the Internet to access cloud resources, latency can become a major problem. If access to your data requires low and predictable latency times – as is the case with many audio and video data repositories -- it's usually much easier to manage and distribute this type of data when you control the network end-to-end.
Lack Of Trust Trust in a cloud provider is difficult to quantify. It depends on the specific needs of your enterprise, the cloud provider's overall reputation, and the kinds of service-level agreements you have in place. Your organization's level of trust with a specific cloud provider might transition multiple times throughout your relationship, depending on these and other factors.