Everest Group research: Large North American buyers – not small buyers – leading cloud computing adoption | Press Release

Posted On January 12, 2011

DALLAS, January 12, 2011 ─ Defying the earlier expectations of small buyers driving cloud growth, large buyers are spearheading cloud business growth with North America leading adoption, according to an IT outsourcing research study by Everest Group, an advisory firm on global services.

Everest Group’s study, Service Provider Cloud Strategies – “As Unique as Everyone,” predicts cloud adoption and growth will be led by development of private cloud environments and, several years later, ‘verticalization’ focusing on key vericals or services will follow.

The Everest Group study includes an overview of cloud computing capabilities; adoption trends in terms of geography, buyer size, and industries; buyer adoption drivers; service provider challenges and predicted services driving future adoption; and strategies for major service providers.

“CIOs are continuing to take a ‘quick ROI’ view about cloud computing, denoting early stages of cloud evolution and a lack of overarching cloud strategy,” said Ross Tisnovsky, vice president, Research. “Security still tops the concerns for CIOs, followed by the unique integration challenges in a cloud service environment. As cloud adoption is at a very early stage, businesses haven’t moved critical workloads to the cloud, and simpler workloads don’t require complex integration with legacy systems. However, we believe both of these factors will gain prominence once cloud computing makes more inroads.”

Other study findings include:

– Most service providers are targeting their strategic client base, traditionally from North America, where they are achieving significant traction.

– Offshore and MNC (multi-national company) service providers are witnessing largely consistent adoption of cloud services across industry verticals.

– Offshore and MNC service providers see different revenue contribution from different cloud layers. Offshore service providers are seeing more contribution from SaaS (Software as a Service), whereas, MNCs are generating more revenue from IaaS (Infrastructure as a Service).

– CIOs believe that cloud computing has a significant role as BPaaS (Business Processing as a Service); however, service providers expect growth from SaaS and IaaS in the foreseeable future.

– Offshore and MNC service providers are focusing on orchestration and provider capabilities to tap the cloud ecosystem; however, their relative focus is different.

“While buyers show concerns, and providers have their own apprehensions about cloud services, it seems even a preliminary cloud discussion makes service providers upbeat about the certainty of cloud adoption,” said Tisnovsky. “To tap the cloud opportunities, service providers need to change their organizational strategy and philosophy. This includes changing the traditional sales and delivery mindset in terms of pricing, sales approach, target clientele, and competence needed.”

For more information about the report, Service Provider Cloud Strategies – “As Unique as Everyone,” or other ITO reports and research services, please visit research.everestgrp.com, email [email protected] or call +1-214-451-3110. 

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