Recent Gigaom Research surveys suggest that another big round of cloud-technology adoption is coming soon. And this time it will be driven less by startups and low-entry costs and more by companies re-inventing their own businesses. At the same time, there's still plenty of growth left as both business and IT workloads migrate to the cloud, according to our analysis of tech-buyer surveys.
Overall, software as a service (SaaS) is mainstream, with over 60 percent of our tech-buyer survey respondent saying they are currently using some applications. Over one third currently use infrastructure as a service (IaaS), and within two years over half expect to do the same. Tech buyers of all stripes tell us they expect to nearly double their usage of software-defined-networking (SDN) in two years, to a nearly 30 percent adoption rate. Platform as a Service (PaaS) and database as a service should also display rapid growth, and within two years will cross the 40 percent threshold.
Every year, Gigaom Research collaborates with North Bridge Venture Partners to gain insights into cloud-computing adoption, drivers and inhibitors, and business objectives. North Bridge recruits technology suppliers and their customers to participate in a wide-ranging survey. Recently, we asked some of the same questions to group of IT decision makers at large companies. We can strip out the vendors and compare the results for two types of users – a mix of small and large companies who are early adopters compared with mainstream enterprise IT. This year at Structure, we also polled conference attendees in real time and compared their answers with our preliminary results.
Signs of strategic shift
So what's driving that pace of adoption? To answer that question it's informative to compare the leading edge with the mainstream. As illustrated in the chart below, over 40 percent of leading-edge tech buyers say creating new businesses and revenue streams are among their near-term strategic objectives for using cloud-based applications and services. Another 35 percent want to – or already do – run their company off the cloud. While the mainstream is still migrating necessary but non-revenue-generating IT functions to the cloud, nearly 30 percent are also looking at new business. We expect that attitude will increase over time.
[dataset id="852160"]
Source: Gigaom Research Enterprise IT Buyers Survey, North Bridge Future of Cloud Computing Survey, 2Q14
Workload migration
Gigaom Research is working on a cloud-computing forecast that we believe will use a unique methodology. We're going to use survey data as an input into a spending model largely based on workload migration and cloud data storage plans. Gigaom and North Bridge asked tech buyers how they expected their company to use cloud resources over the next 12 to 24 months on a variety of IT and business functions. We asked whether they were not moving a given workload to the cloud, whether they were moving some processing, or significant processing. At Structure, we asked which workloads the audience thought would migrate fastest. Unsurprisingly, just about everyone is moving their web operations to the cloud, but a quarter of respondents of all types are moving significant transaction processing.
[dataset id="852169"]
Source: Gigaom Research Enterprise IT Buyers Survey, North Bridge Future of Cloud Computing Survey, 2Q14
Leading-edge companies are migrating front-office business functions like sales and marketing rapidly. Organizations of all types are moving business analytics and back office functions to the cloud, though manufacturing, logistics, and supply chain might take a little longer.
[dataset id="852173"]
Source: Gigaom Research Enterprise IT Buyers Survey, North Bridge Future of Cloud Computing Survey, 2Q14
Michael Skok, a partner at North Bridge, believes this transformative, business-driven wave of cloud computing will result in a boom that is orders of magnitude bigger than the original. While that estimate could be a little aggressive, there's no question the industry will see plenty of growth. Smart IT execs - even at the most traditional companies – will harness or even drive this momentum. Those that do will look like heroes. No more will IT be the sluggish cost center, but rather a key contributor to new company revenue.