Tag: enterprise

Enterprise CIO: “The Reports of My Death Are Not Greatly Exaggerated” | Gaining Altitude in the Cloud

As a humorist, American author Mark Twain would undoubtedly have been amused by this variant of his famous quote. But the demise of enterprise CIOs’ traditional role is real, (unlike the misreports of Twain’s passing), and to understand this phenomenon, we need to understand the evolving market dynamics.

Three key trends are significantly altering the shape, structure, and operations of today’s CIO office:

  1. Cloud services: Unlike infrastructure, IT governance, and IT security teams, which are generally shared throughout an enterprise, large numbers of applications developers are normally aligned to specific businesses. Due to the complex labyrinth of multiple teams and decision centers, applications developers face substantial difficulties in fulfilling their business-based project sponsors’/budget holders’ demand for quick time to market.

    To overcome these challenges, applications developers are increasingly adopting cloud-based infrastructure/platform-as-a-service (PaaS). This allows them to bypass the other IT teams, (e.g., security and infrastructure). By leveraging cloud services, applications developers no longer solely rely on enterprise IT’s infrastructure and operations to develop and test their applications. They can develop, test, and even host their applications on a cloud-based platform. This is causing challenges for the CIO’s office in terms of reduced involvement with businesses, security issues, and audit risks.

  2. Software-as-a-Service (SaaS): Although it is part of the cloud ecosystem and has been in the marketplace for more than a decade, SaaS is treated as a different segment. The challenges with deploying enterprise software in the traditional manner, (e.g., ownership of licenses, hardware, support, upgrades, etc.), coupled with the significant time to deploy and the high rate of failure, are driving business to push the CIO’s office toward a “cloud first policy.” For simpler applications that do not require organizational support, (e.g., infrastructure, data, integration), businesses are more than willing to leverage the SaaS model. And to avoid getting embroiled into the complex labyrinth of organizational IT, businesses are also hiring contractors to perform specific IT-related tasks. Additionally, as businesses’ appetite to wait for months, even years, without knowing the possible outcomes of an enterprise software deployment is depleting fast, they are increasingly viewing SaaS as the solution.

  3. Digitization and business-IT budgets: Although cloud services and SaaS are disrupting enterprise IT, the biggest challenge facing CIOs is the shift of technology budgets to the business. This typically includes initiatives such as big data analytics, multi-channel customer engagement, social media, CRM, and enterprise mobility. While the CIO’s office plays a role in these initiatives, it is fast losing decision-making powers. CEOs and CFOs are now inclined to spend technology dollars on business initiatives that generate growth, e.g., digitization. Therefore, in a boardroom battle for technology budgets, CIOs are increasingly losing against the businesses (e.g., chief marketing officers and chief digitization officers). The growing perception that digitization is for growth and IT is for efficient operations also works against the CIO’s office.

Despite the fact that a CIO’s office will always exist, there will be an increasing debate around its utility in its existing form. While the misalignment of business and IT has been an age-old debate, the cloud age has finally provided businesses with the ammunition required to change the game. Cloud services, next generation technologies, techno-savvy business users, and the pivotal role of technology in an organization’s growth are creating pressure on enterprise CIOs. They need to act fast to prove that Mark Twain was indeed right and stem reports of their death.

If you are a CIO or an IT manager interested in sharing your story, please reach out to me at [email protected], or directly add a comment below.

Video: Scott Bils Chats with Randy Bias of Cloudscaling on Dysfunctions and Value Creation in the Cloud | Gaining Altitude in the Cloud

It’s not all roses and sunshine in the cloud. There’s cloudwashing. Vendors don’t always deliver what the customer thought they were promised. Deployment fail. People get fired. Randy Bias, cloud iconoclast and Co-Founder & CTO of Cloudscaling, moderated the True Stories from the Cloud session at Cloud Connect Silicon Valley in April 2013. Neal Sample, CIO, Enterprise Growth at American Express, and Thomas Barton, Global Enterprise Architect at Novartis Pharmaceuticals shared with the audience their experiences with moving their organizations toward transformation through cloud technologies. In this video, Randy talks to Everest Group’s Scott Bils about challenges and value creation in the cloud.

7 Things We Learned at Cloud Connect | Gaining Altitude in the Cloud

Originally posted on Leverhawk


It was an interesting week last week at Cloud Connect Silicon Valley. In addition to the keynotes and track sessions, we also saw the release of the summary results of the latest joint Cloud Connect / Everest Group survey on enterprise cloud adoption.  Here are the seven things we took away from the conference, the survey results, and the discussions we had:

  1. The power shift from IT to business is real – one of the key findings from the adoption survey was that outside of dev test environments, disaster recovery (DR) and email / collaboration, business stakeholders are the primary drivers of enterprise cloud adoption. Anecdotal conversations with practitioners and vendors alike reinforced this idea that the cloud is permanently changing buying behaviors in the enterprise.  This is bad news for many of the legacy enterprise IT players, who struggle with transitioning from a CIO-centric sales model to one focused on emerging business buyers.
  2. OpenStack is on a roll – one of the common themes in both the sessions and side conversations is that OpenStack appears to be gaining steam not just with the Foundation members but with enterprises as well.  In fact one leading financial services player we met there has the target of moving half of their production workloads to OpenStack by the end of the year.  We heard countless more examples of deployments that were in fact more than just pilots, and indications that OpenStack is starting to gain serious momentum.
  3. Cloudwashing is contagious – many legacy enterprise IT vendors have a lot to lose as their customer base migrates to the cloud.  It’s probably not surprising that many of them are happy to have their customers mistakenly believe that virtualized environments = private clouds.  As a result we have the unfortunate phenomena of organizations claiming and believing that they’re migrating to private cloud models, when in fact they’re really not.
  4. Cloud infrastructure can create competitive advantage – while applications, analytics and data are commonly seen as the source of IT-enabled competitive differentiation, we heard about how some enterprises are actually seeking cloud infrastructure as potential sources of business advantage.  We heard from one other major financial services firm that the speed and agility benefits being provided by the combination of cloud and open source was in fact creating competitive business advantage in the marketplace.
  5. Shadow IT doesn’t always mean happy customers – a growing trend that we heard a bit about was the “lose / lose” dynamic that was being created in some organizations by shadow IT.  The scenario goes like this: business buyer asks corporate IT for on-demand infrastructure services, with requirements that are perhaps a bit unrealistic.  Unhappy with the response they hear, business buyer instead goes to a public cloud IaaS provider, but quickly realize requirements aren’t met there either, but for different reasons.  The result is one unhappy customer and two unhappy service providers.   While this is the exception not the norm today with shadow IT, it is a trend worth watching.  Note to business buyers:  with freedom comes responsibility, certainly at least to understand your real requirements.
  6. Compliance isn’t stopping adoption – conventional wisdom suggests that highly regulated verticals will be adoption laggards due to security and compliance concerns.  A series of sessions with IT executives at NovartisAmerican Express and Fidelity proves that’s not the case.  While in the most case they’re focus is on private cloud models, the motivation is still around business drivers – providing faster, cheaper and more effective applications and capabilities.  The initiatives they’re driving are global in nature, and far from the ubiquitous proof-of-concepts that everyone seemed to be discussing last year.
  7. The tipping point is near – if it’s not here already, we’re close to the point where cloud becomes accepted as the primary IT delivery model going forward.   The conference survey showed that the majority of enterprises now expect migration to some type of cloud model (public, private hybrid or other) across all major workload types.  This isn’t to say that everything will migrate tomorrow, or that it will make sense to migrate everything to cloud models (it won’t), but it does say that market conversation around whether cloud makes sense for the enterprise may be close to over.

Interested in reading more about how cloud is driving enterprise transformation?  Check out our recent post on how JP Morgan Chase is using PaaS to transform internal application development.  Also read our guide on understanding the Great Tech War being fought across cloud, mobile, digital content and big data.

Photo Credit: Cloud Connect

Learn How Enterprises Are Embracing Disruption at Cloud Connect Silicon Valley 2013 | Gaining Altitude in the Cloud

2013 Enterprise Cloud Adoption Survey Thumbnail
Download the 2013 Enterprise Cloud Adoption Survey Summary Report

Saving money is nothing compared to beating your competitors to market with a better product.

This is the revelation that’s rapidly taking hold in the enterprise CIO’s office. Until very recently, most enterprise IT leaders would tell you that their primary goal in moving to cloud computing was related to cost reduction, primarily through server consolidation. Occasionally, you might find a an adventurous CIO talking about infrastructure automation and end-user provisioning.

Now, these CIOs are beginning to realize what SaaS providers figured out several years ago: the real benefit of cloud computing lies in organizational transformation, not cost compression.

This dawning realization is what’s led us to build two sessions about the practical implications of cloud disruption at Cloud Connect Silicon Valley. The event is April 2-5 at the Santa Clara Convention Center. Register with the priority code DISPEAKER for 25 percent off.

In the first of the two sessions, we will look at the tools and techniques driving the cloud disruption in the enterprise. A panel of enterprise IT leaders and cloud thought leaders will survey the tools and techniques enterprises are embracing to accelerate their time to value in cloud deployments while improving the ability of user communities to drive new streams of competitive differentiation by developing, testing, deploying and iterating applications faster than ever before.

Rather than looking at edge cases and exciting but unproven technologies, the panel will focus on cloud technologies and tools that are available, proven in production environments and ready to deploy. Randy Bias of Cloudscaling will talk about the disruption of open source projects, while Keith Shinn from Fidelity will give an example of his organization’s transformation through implementation of OpenStack. Niall Dalton from Calxeda, will talk about disruptive hardware innovations such as ARM processors.

Our goal in this first part is to give participants a high-level understanding of which tools are solid choices for their enterprise cloud deployments.

In the second of our two disruption-focused session, we’ll present new business models and case studies from enterprises who have used cloud to accomplish goals that were impossible with traditional IT organizations. We’ll take a closer look at specific examples of organizations that have embraced cloud technology AND new IT organizational protocols to unleash the creative potential of their internal users to build, launch and iterate new apps faster than ever before.

Enterprise executives who have done this will share their stories, and participants will hear how these leaders helped their organizations first understand and then embrace the agility, flexibility and dramatic time-to-market compression that cloud enables. We’ve asked Anand Palanisamy of PayPal to talk about the increased agility and development cycle compression that have helped make his company more responsive to customer needs and competitive threats.

Building sustainable competitive advantage through a transformation in business model assumptions is the real benefit goal of cloud migration. That’s why we built two sessions dedicated to the topic. Come, and hear about it for yourself, or watch for a mid-April summary of what the speakers shared about using cloud technology to align the IT service delivery process and help their organizations launch flexible new business models that drive new revenues and profitability.

A Timeout to Evaluate Our Progress on the Road to Cloud and Transformation | Gaining Altitude in the Cloud

2013 Enterprise Cloud Adoption Survey Thumbnail
Download the 2013 Enterprise Cloud Adoption Survey Summary Report

Cloud Connect Silicon Valley is just around the corner. Once again we’re assembling a group of enterprise IT leaders and top thinkers in cloud to deliver current, unvarnished and useful information for companies mapping their strategies for organizational transformation through agile business models empowered by cloud computing.

And speaking of maps, this year’s theme for the Organizational Readiness and Business Cases track is “Time to pull over and check the map.” On our road to the cloud, enterprises have taken wrong turns, one-way streets and paid some hefty tolls. After all this exhausting traveling, where are we? So, we’re going to safely pull off to the service plaza and check the map.

The first session (Wednesday, April 3 at 9:00 am) will feature a keynote address from the IT leadership at a Fortune 500 enterprise that has made aggressive moves to push much of its workload portfolio to cloud infrastructure. Participants will learn how this enterprise made the business case for organizational transformation to cloud; what assumptions it made in building its strategy for migration; and where the organization is seeing early successes — and warning signs.

Session two (Wednesday at 3:45 pm) is called the “Cloud Witness Protection Program.” We’ll hear entertaining but serious insights from an enterprise IT executive whose identity we’re concealing. He (or she) will share with the audience hard-learned lessons and strategies for avoiding the same mistakes. A quiz session from a panel of experts will follow, digging deeper for keys as to what to look for in a cloud vendor; tough questions to ask before the contract is signed; and what terms to insist on — or walk.

The third session (Thursday at 2:30) is titled, “Disruptive Innovation in Cloud Technology and Tools.” Experts from technology providers, open source projects and enterprises will give participants a tour of new cloud technologies and tools that are available, proven in production environments and ready to deploy. Participants will leave the session armed with an understanding of which tools are the best choices for their enterprise cloud deployments.

The final session (Friday at 10:15) looks at disruption from a business models standpoint. I’ll lead a discussion with two enterprise executives who have used cloud to fundamentally disrupt organizational business models. Participants will hear how these leaders helped their organizations first understand and then embrace the agility, flexibility and dramatic time-to-market compression that cloud enables. Building sustainable competitive advantage through a transformation in business model assumptions is the goal of cloud, and this session will give participants new insights on how to help their organizations get there.

At last year’s Cloud Connect Chicago, we unveiled the results of the inaugural Enterprise Cloud Adoption Survey. Building on the success of that effort, we have launched the 2nd Annual Cloud Adoption Survey. The survey will help us track year-to-year adoption trends and drivers. Tell us about your journey to the cloud, and you could win a complimentary conference pass to Cloud Connect Silicon Valley. Take the survey now.

Hope to see you at this year’s Cloud Connect! Register using priority code DISPEAKER for 25% off.

Five Mistakes that Enterprise Cloud Service Providers are Making | Gaining Altitude in the Cloud

A wide array of players is aggressively attacking the enterprise cloud infrastructure services market. The competitive landscape includes providers from a variety of backgrounds, including hosting companies such as Rackspace, GoGrid, and Tier3; telcos such as AT&T, Verizon, Telstra, and BT; and legacy enterprise IT service providers such as IBM, HP, CSC, and Dell. They’re all pursuing the same prize – providing CIOs of large enterprises a range of cloud-enabled, next generation infrastructure platforms, from managed or hosted private clouds to public cloud IaaS.

Although the market opportunity is undeniably large and growing, the problem is that many IT services players are not achieving their revenue and growth aspirations for enterprise cloud services. They’re finding it difficult to migrate existing customers to cloud platforms, expand cloud adoption beyond limited use cases, and use cloud services to win new customer logos. Why is growth falling short of expectations? While not exhaustive, following is a set of five issues and mistakes Everest Group commonly sees in the service provider community:

  1. Underestimating Amazon: Enterprise providers almost universally discount Amazon AWS as not being “enterprise ready.” This is despite the fact that AWS is now forecasted to generate nearly US$4 billion in 2013 revenue and that enterprise customers will be driving a significant part of this revenue. While AWS enterprise use cases today are focused primarily on dev / test environments, web apps, and websites, AWS has recently rolled out a variety of enterprise offerings. These include everything from Redshift and data pipeline services targeting business intelligence (BI) and data warehousing, to vertical specific clouds including GovCloud and FinQloud. In fact, this iterative, incremental approach is part of its strategy for attacking the enterprise, with many competitors running the risk of becoming the proverbial “boiled frog.” The reality is, many service providers need to think hard about whether they are going to be able to compete in the enterprise public cloud IaaS space. Using AWS instead of continuing to invest in a native public cloud IaaS offering may be a better strategy for many of them over time.

  2. Neglecting change management:  While providers expect customers to make the cloud paradigm shift, many haven’t done so internally. Instead, a “build it and they will come” mentality tends to be pervasive. The expectation is that once the offers hit the market, customers will be clamoring to get on board. Unfortunately, experience is showing that’s not the case. Customers need help understanding the benefits, risks, and costs of cloud models, and where they make sense. Although helping customers understand the implications of cloud models is critical, many providers have dramatically underinvested in vital areas such as sales training. Too often, sales and marketing groups position and message cloud services in a legacy paradigm, which isn’t connecting with customers. While many providers are frustrated that sales teams aren’t making cloud quotas, they need to take a step back to make sure their go-to market teams are positioned and trained for success. To achieve sales effectiveness, they need to structurally change their incentive mechanism, account strategy, and planning exercises.

  3. Selling sole-source:  many providers are selling next generation infrastructure platforms – the ability to provide customers anything from dedicated or managed hosting to public cloud services. The problem is that’s not how enterprise customers are buying cloud today. They’re seeking to use the flexibility of the model to deploy specific use cases, and different use cases may require different platforms. Too many providers are trying to sell the “big bang,” sole source IT transformation story and telling CIOs they can provide all of their next generation platform needs. While there are CIOs driving cloud-enabled IT transformation, there aren’t enough of these opportunities yet to support the number of providers chasing them. In fact, many providers would likely be better off selling incremental or even transformational stories to business buyers.

  4. Omitting SaaS and PaaS: Cloud infrastructure service providers have little incentive to migrate customers to public cloud SaaS offerings such as Salesforce.com or Workday. For many customers, migrating legacy apps to SaaS models will be the right answer. Many enterprise cloud service providers conveniently omit this lever from their transformation story and lose customer credibility as a result. The fact is these providers need a better answer for SaaS migration and integration. Moreover, very few cloud IaaS providers are investing in creating an effective PaaS strategy. Enterprise buyers require flexible platforms hosted in an agile infrastructure environment to develop applications for the future. Service provider transformation stories need to closely integrate application development platforms with a cohesive IaaS offering.

  5. Failing to differentiate:  Many vendors position themselves as providing managed services that make cloud models ”enterprise ready.” The problem is that every other vendor is saying the exact same thing. Enterprise cloud service providers need to think harder about what their distinctive customer value proposition really is. Too many providers are trying to sell horizontal cloud technology platforms with little thought given to customers’ unique business drivers and how cloud can be used to drive business transformation. But there are plenty of potential opportunities to differentiate by vertical, use case, geography, target community, and other dimensions.

While all of these issues are fixable, they also are non-trivial. The good news for the provider community is that no one has truly yet cracked the code on enterprise and cloud infrastructure services.

Enterprise Cloud: Is Corporate IT Finally Getting Serious? | Gaining Altitude in the Cloud

One of the better indicators that corporate IT groups are starting to get serious about cloud is their growing interest in solutions that help them aggregate and manage multiple cloud services. Some call these solutions cloud services brokerage and management, and others term them cloud orchestration. While the market hasn’t yet converged on a common set of capabilities or definition, the broad category typically includes the following:

  • Service catalogs – “App Store”- like models that provide users access to internal IaaS and PaaS services and in some cases third-party SaaS apps and infrastructure services as well
  • Service provisioning – capabilities that support end-user requests, provisioning, and deployment of cloud services
  • Service integration – data integration services across multiple cloud services, including “cloud-to-cloud” and “cloud-to-ground” models
  • Chargeback and billing – consumption-based metering and billing of cloud services to internal users, including private services and aggregation of public cloud services spend
  • Service management – monitoring and management across multiple cloud services, including performance, capacity planning, workload management, and identity management
  • Sourcing – contracting and sourcing of cloud services across multiple platforms and providers

These solutions are being offered by a wide variety of players, including not only traditional enterprise systems management vendors – which in some cases are just repackaging SOA offerings – but also global systems integrators (SIs) and focused startups.

What’s important about this phenomenon?

First, corporate IT’s interest in these capabilities is, in a way, an implicit acknowledgement that:

  • Cloud services will be adopted in scale across enterprises
  • Multiple large scale services will need to be orchestrated and managed
  • Orchestrating these services will be hard and will require external third party solutions

This is a far different conversation than corporate IT was having a year ago at this time, which was primarily around what pilot or proof of concept to launch.

Second, interest in cloud orchestration is being “pulled” by corporate IT, rather than “pushed” by the business. A premise we recently heard is that business’ role in driving adoption of cloud is no different than it was in the packaged software era. Packaged software required servers, storage, and networks, all of which required IT management and support. This provided IT with long-term job security and the opportunity to “empire build.” As a result, corporate IT aggressively supported packaged software rollouts and implementations.

The difference in the cloud era is corporate IT’s attitude. To date, it largely perceived the cloud as a threat. But now, IT is discovering it can potentially regain a measure of relevance and control by adopting a service provider mindset, and service catalogs / chargeback models combined with private and public cloud services.

Is corporate IT finally finding a path to building its empire in the cloud? Are you or your IT group considering, or embarking upon, a cloud orchestration initiative? What thoughts and experiences do you have to share with your peers?

5 Things We Learned At Cloud Connect | Gaining Altitude in the Cloud

Even though email, smart phones and iPads are great virtual communications devices, nothing beats the value you can gain from face-to-face time with your peers and other industry thought leaders. If you weren’t fortunate enough to attend the Cloud Connect conference in Chicago earlier this month, we’ve captured some of the highlights of and insights from the discussions during the Organizational Readiness track (which we were privileged to lead) for you:

  1. Change management comes to the fore – executive sponsorship and early successes are keys success factors for driving cloud-enabled transformation. While “top-down” CIO-driven programs are helpful in shifting culture and mindset, “bottom-up” adoption and innovation is also required to demonstrate the value of cloud models to skeptics. In many cases, new cloud initiatives need to be incubated and protected from the enterprise to provide freedom for experimentation. This kernel of wisdom was a result of our very interactive session with Matt O’Keefe (Morningstar), Keith Shinn (Fidelity) and Dave Roberts (ServiceMesh) about the hard choices in enterprise cloud adoption. Watch Dave in this video for tips on ensuring a successful cloud deployment in.

  2. “Shadow IT” isn’t a dirty phrase – corporate IT needs to focus its limited resources and time on the objectives and initiatives that are deemed to be highest priority. In many organizations this means focusing only on applications and infrastructure considered to be “mission-critical.” As an unfortunate result, many projects requested by the business fail to make the cut. Thus, it’s understandable if the business decides to “end-run” IT and go to the cloud. The cloud can give enterprises additional scale with limited IT budget and go deeper in the project stack. In fact, in many cases CIOs actually encourage their business counterparts to go to external cloud service providers. The key to success, however, according to Bates Turpen (formerly InterContinental Hotels Group) and David Falck (salesforce.com), is that IT leaders , help internal customers self-provision without losing control and help business users ask the “right” questions of potential cloud vendors.

  3. Culture changes within IT – not only is cloud reshaping the relationship between business and IT, it’s also starting to restructure the IT organization itself. The dev ops revolution is shifting IT from a CIO-driven model to a developer-driven decision-making model around infrastructure. Developers are making their own frontline choices around platforms and service providers that are then being aggregated up by managers, a distinct break from legacy models where platforms and infrastructure are mandated by the CIO. Also, as user experience becomes an integral part of a product, CIOs need to encourage their developers to think like a user and empower them to build a product from beginning to end. Watch Lauren Cooney (Cisco) talk more about the dev ops movement.

  4. Different clouds for different folks – common enterprise concerns around cloud continue to center around security, compliance, performance and vendor lock-in. We asked the experts on our “Current Thinking in Addressing Persistent Cloud Challenges” panel, Paul Burns (Neovise) and Troy Angrignon (Cloudscaling), how to best address these questions. Their answer was : “It depends” (which is a much better answer than the vendor community could deliver just a few years ago). Options across public and private, and enterprise virtualization and elastic infrastructure clouds, provide new answers to these issues for both legacy and new applications, but also must be carefully evaluated.

  5. Adoption is about innovation – in conjunction with the Chicago conference, we conducted a joint survey with Cloud Connect on enterprise cloud adoption patterns. While most service providers think enterprises are migrating to the cloud for total cost of ownership (TCO) reasons, agility, innovation and flexibility are actually the drivers. Thus, there’s a glaringly apparent  disconnect between vendors that are focused on selling next generation infrastructure to IT, and businesses that want cloud platforms to drive top line revenue. Download the complimentary survey results.

If you attended Cloud Connect, our readers would enjoy hearing what you took away from the conference sessions, as well as your concerns, issues and successes on cloud adoption within your enterprise, so feel free to share away!

Picture This: a 360° Visual Depiction of Current Cloud Adoption Trends | Gaining Altitude in the Cloud

Download the Enterprise Cloud Adoption Survey Results


We wrote in a blog last week about the top messages that emerged from the extensive enterprise cloud adoption survey we conducted earlier this year in partnership with Cloud Connect. To ensure we’ve “got the backs” of our readers who tend to be right-brained and thus more attuned to images and visual thinking, the following shows the key findings we reaped from the responses of the 346 buyers, providers and advisors who participated in the survey.

Enterprise Cloud Adoption Infographic
Click to expand

As you see:

  •  Cloud adoption is expanding beyond “low hanging fruit” like email and custom applications to include disaster recovery, storage and archiving, and business intelligence and analytics to support Big Data initiatives
  • Buyers’ opinion of the Cloud is extremely positive, with highest satisfaction in ability to create flexible infrastructure, and they have exceptionally high expectations of future benefits
  • Enterprises are increasingly viewing Cloud as an enabler of top line growth, i.e., to reduce time to market for applications, solutions and products, yet providers continue to sell with a cost reduction value proposition

To gain more insights on these and other key findings, you can download the survey summary report, and/or join me at the Cloud Connect Chicago conference on September 12, when I’ll be discussing the survey results in detail. Use code EVERESTGRP to receive 25% off conference passes or claim a free expo pass. For now, up and away on the Cloud!

Top 5 Takeaways from the Enterprise Cloud Adoption Survey | Gaining Altitude in the Cloud

The enterprise cloud adoption survey jointly conducted by Everest Group and Cloud Connect in mid 2012 shows very interesting trends. Unlike other surveys, this effort includes all the cloud market participants such as cloud providers, buyers, third-party advisors, consulting firms, and cloud enablers. This ensures a 360o view of the market.

The survey summary report is now available and can be downloaded here.

The top five messages emerging out of this survey effort are:

  1. Buyers are willing to transform their infrastructure and business application landscape leveraging cloud models. The growing need for data intensive applications, quicker time to market, flexible infrastructure, and data management is driving this transformation. The survey indicates that over 85% of enterprise buyers have already deployed or plan to deploy cloud-based infrastructure solutions.

  2. Buyers and providers of cloud services need to find a common ground on understanding challenges in cloud adoption. Though security and integration challenges top the list, the buyers believe that their management is more than willing to deploy cloud solutions whereas providers see lack of management buy-in from the buyers as an important barrier.

  3. There is a disconnect between what the buyers hold valuable and what the providers believe is important in cloud adoption. Adopters believe that cloud model enables them to improve top line by increasing productivity and reducing the time to market. Moreover, reduction of total cost of ownership does not drive their cloud adoption whereas providers see it as the most important factor.

  4. Cloud delivery models are significantly impacting the traditional IT buying centers. The survey shows that a considerable portion of IT budget is increasingly getting allocated to the businesses. Moreover, individual business leaders (including C-level executives) have more say in cloud decisions over IT, procurement, or the finance team.

  5. Overall, the sentiments of buyers of cloud services remain very positive. Most of them met their objective, especially from cloud infrastructure solutions. The survey reveals that ~65% of buyers met their objectives from cloud deployment and ~90% decision makers believe that their cloud adoption will increase in the future.

The survey shows that though currently a large part of cloud adoption is driven by industry-agnostic offering, there is a considerable demand for industry specific solutions. We believe that industry flavors will become prominent once a critical mass of cloud adoption is achieved.

Though the survey showed disconnect between the perspective of buyers and providers in cloud adoption, it also revealed common ground on various aspects. For example, in key decision criteria for cloud evaluation, both the buyers and providers believe that security, contract terms and SLAs, fair pricing, and tenure of the provider are important parameter. We believe these common grounds are good for the industry and development of the cloud market as it aligns the expectations of various market participants and should help in creating relevant cloud services.

Overall the enterprise cloud adoption survey shows that despite all the challenges, confusion, barriers, and other issues, market participants are upbeat about cloud adoption. The buyers are quite satisfied with the outcome of cloud adoption within their enterprise IT set-up. Not only is this positive for the industry, but it also establishes the fact that, unlike other hyped-up trends, cloud delivery models are here to stay.

I will be speaking more about the survey results at Cloud Connect Chicago on September 12. We also have an excellent speaker lineup for the Organizational Readiness track, including thoughts leaders from Cisco, InterContinental Hotels Group, salesforce.com, Morningstar, Fidelity, Neovise and Cloudscaling. Read my blog from earlier this month for a sneak preview of the track sessions. Use code EVERESTGRP to receive 25% off conference passes or claim a free expo pass. I look forward to seeing you at Cloud Connect!

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