It's Very Clear: Clouds Are Getting Big

By Samuel Greengard  |  Posted 01-20-2017 Print Email

In a best-case scenario, clouds help organizations innovate and disrupt. Moreover, they frequently cut or shift costs by transferring CAPEX to OPEX.

Cloud computing

It's certainly not news that cloud computing has become a standard tool for the enterprise. Clouds have introduced a level of agility and flexibility that would have been unimaginable in the past.

In a best-case scenario, clouds help organizations innovate and disrupt. Moreover, they frequently cut or shift costs by transferring CAPEX to OPEX. There are many attractive qualities, to be sure.

Yet, the term "cloud" is somewhat monolithic. It doesn't describe the myriad ways organization use the technology.

A recently released report from IT market research and consulting firm 451 Research, "Voice of the Enterprise: Hosting and Cloud Managed Services," offers some perspective. Only 31 percent of enterprise spending is devoted to infrastructure services, while nearly 70 percent of budgets for hosting and cloud is spent on other services. More specifically, this includes:

  • 42 percent on application services
  • 14 percent on managed service
  • 9 percent on security services
  • And 5 percent on professional services for cloud enablement.

The upshot? "A significant portion of hosting and cloud services spending is on unmanaged or self-managed infrastructure or application services," 451 Research notes. "Nearly half—44 percent of infrastructure services spending and 49 percent of application services spending—is for products that are bundled with additional managed or security services."

The survey, along with interviews of more than 45,000 senior IT buyers and enterprise technology executives, also found that enterprises use hosting and cloud services supplied by a broad range of provider types. Public cloud infrastructure providers, which are used by 69 percent of respondents, are the most common, followed by managed hosting providers, used by 26 percent of the enterprises surveyed.

It turns out that CIOs and other IT leaders are "looking for providers who emphasize expertise in operating, optimizing and securing the infrastructure and application products they deliver," said Liam Eagle, research manager at 451 Research and lead author of the study.

For hosting and cloud services providers, 451 Research found that all of this represents growing opportunity.

"The market for managed infrastructure and application services is a longer tail market, with greater opportunities for providers who emphasize expertise in operating, optimizing and securing the infrastructure and application products they deliver," Eagle noted. "This includes opportunities to deliver services based on reselling infrastructure and application services from the largest IaaS and SaaS vendors."

 



 

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