"Honestly, it's not as if anything coming back from this report is hugely surprising," said Stuart Feil, editorial director at Forbes|INSIGHTS, as we discussed its recent report, "Seeding the Cloud: Enterprises Set Their Strategies for Cloud Computing," sponsored by EMC.
The report summarizes the results of a survey of 235 CIOs and other IT executives--more than 90 percent vice president or director level or higher--at companies with annual sales exceeding $500 million. The survey also includes quotes from interviews with five CIOs and CTOs from diverse industries, including health care, government, engineering and energy.
Feil's laconic opener about the report might be taken to mean that nothing important is happening in the enterprise cloud space, but that wouldn't be accurate. In fact, the Forbes report reveals that "Cloud computing projects are still at an early stage at most companies, if they are happening at all. However, the overwhelming majority of IT executives have at least begun evaluating the benefits of cloud technology, with much of their focus on private clouds."
The Forbes|INSIGHTS report describes a private cloud as one "in which infrastructure and applications are managed and controlled by the IT organization using them, whether developed internally or delivered by an external services provider." In contrast, it labels a public cloud as one "where infrastructure and applications are delivered to multiple clients by a third-party, and housed and managed in that provider's data center."
According to Feil, one top-line take-away is that the public cloud still has a way to go to establish real credibility among top-tier enterprise users. (See Figure 1 in PDF) Only 4 percent of respondents describe themselves as having a public cloud strategy that they are currently implementing. Most are evaluating (38 percent) and piloting (23 percent) public clouds, and fully 35 percent of respondents say they have no plans to use them.
This is not surprising when you consider that core enterprise needs for manageability, insight, security and regulatory compliance are still not well met by the public cloud paradigm.
Feil suggests that the emerging picture for an enterprise public cloud is about selective adoption around key applications and work practices (sales, for example), and he suggests that, beyond this, uptake may eventually be seen to map to dynamics such as corporate strategy for assimilating acquisitions, maintaining regional offices, supporting global teams, partnering and federating, letting people work from home and other situational variables.
All of these create needs, trends, financial considerations and center-of-work footprints that resemble those of the small- to medium-size businesses normally considered the sweet-spot for service provider applications.
Quite a different picture is emerging for the private cloud, Feil said. (See Figure 2 in PDF) While only 7 percent of Forbes' survey respondents describe their firms as "currently implementing" a private cloud, more than half of the respondents are evaluating them. In addition, a quarter of the respondents have pilots running, and only 16 percent "do not plan to use" this technology.
Comparing charts for the two paradigms side by side shows an approximate halving of market-retarding positions (16 percent versus 35 percent that "do not plan to use"), and an almost doubling of market-accelerating positions (7 percent versus 4 percent that "are currently implementing") for the private cloud over the public cloud paradigm. "It's pretty obvious," Feil said, "that the private cloud is where the action is now."
The accelerating movement toward implementation of private cloud solutions is being driven hard by every business fundamental and by the whole scope of evolving enterprise IT requirements. It's also being coaxed along by the now-proven viability of core technologies such as virtualization and their obvious role in data center consolidation and IT workflow optimization.
Virtually all respondents view cloud technology as enabling cost-reduction, which 89 percent say they are under pressure to realize. The vast majority think that cloud solutions offer a clear path to reaching brass-tacks goals for dynamic compute/storage allocation, application and license management, and backup, as well as to IT-local issues such as workforce management. And a not-insignificant number think the cloud is key to pursuing more strategic goals, including collaboration and improved communications with partners, suppliers and customers. (See Figure 3 in PDF)