Cloud Computing – Uneven Growth?

A recent study by the AMD group indicated that as many as 70% of business respondents have stated that they are either already using cloud computing or are contemplating beginning to use it in the near future. Most business leaders already recognize that there is substantial value in cloud computing and 1 in 10 businesses already admit to storing more than $10 million worth of data on the cloud.

Gartner Inc. recently published data showing that there is a global shift towards various cloud computing services such as IaaS, PaaS, and SaaS. However, maturity varies across regions.

The highest level of adoption was found to have taken place in North America with nearly $33 billion worth of data center outsourcing having taken place in 2011. At the same time, with nearly $23 billion worth of web hosting and collocation, the North American market has the highest level of cloud services adoption.

Europe came in next with about $47 billion worth of business dollars being spent on cloud-based operations. A key feature of the European market has been the development of low-cost centers that gain significantly from the SAP market. The current economic crisis in Europe is holding things back somewhat. However, once this settles, the pace will pick up once again.

Activity in the Asia Pacific is still low with only about $13 billion worth of business being devoted to the cloud. The action is primarily in Japan and South Korea with other developed economies of the area following closely behind.

As far as current adoption is concerned, this is how things stand. But many other users are entering the arena. The fastest growth now is in Latin America and in the Asia Pacific. Companies here are moving extremely aggressively to embrace the cloud whereas the approach in the US and in Europe is more cautious.

In a recent interview, the CEO and MD of the Indian multinational, Tata Consultancy Services, (TCS) said that an inflection point has been reached and there could possibly be no turning back. Cloud applications were already a major part of corporate IT infrastructure, and the benefits were too large to ignore.

Security is still a major concern although there are regional differences. American and European companies particularly vary about putting their core applications on the cloud. There is also a clear difference in confidence when public or private clouds are concerned. Whereas only 20% of US / European companies are willing to put their critical data on public clouds, they are more confident of private clouds with 66% willing to migrate. Companies are also very careful about putting customer data on the cloud.

Surprisingly cost is not the dominant driver of the move to the cloud. The US and Asia Pacific are making the move primarily to standardize software applications and business processes. In Europe and Latin America, business agility provided by the ability to alter server/application instances rapidly is the key reason for the migration.

The next few years will see major increases in the ratio of expenditure between traditional IT and cloud computing.  Although individual rates may vary, in every case, the graph is only pointing upwards.