How Companies Are Adopting and Adapting to Cloud Computing
There have been several studies attesting to the growth of cloud computing, and some of them have been covered in earlier articles (See: Where Is Cloud Computing Going? Up, Up And Away! and How BIG Is the Cloud Computing Market?). Now, KPMG has come out with study that shows not only how fast cloud computing is growing, but also what is compelling this change.According to the study conducted among 806 executives, many from the C-suite, 81% responded that their organizations had already moved at least some business activities to the cloud and 17% of them expect 2012 investment “to skyrocket, with some companies planning to spend more than a fifth of their IT budget on cloud next year”. 10% of the respondents said that their organizations were already running their entire core IT services on the cloud, while 13% responded that the process was underway.
The study also revealed the reasons companies were taking to the cloud. 80% cited process improvement as the reason; 79% of users and 76% of providers believed that the shift leads to technical benefits, and 76% said the use of cloud computing would have strategic benefits, possibly including transforming their business models to gain a competitive advantage.
The respondents stressed that a move to the cloud will have to deliver tangible cost reductions for organization-wide buy-in, with different proportions gunning for different percentages of required savings on IT spending. 45% said they would have to be between 1-10% of current levels, 34% proposed a range of 11-25%, while 10% had high expectations of 25%-plus reductions.
For some ways in which companies can save money by adopting cloud computing, see:
KPMG summarized the beneficial effects of cloud computing, as seen by companies, as follows: “Cloud is transformative in that it is creating new business opportunities as companies harness its power to efficiently facilitate new revenue, services and businesses. It is breaking down barriers in the supply chain, creating more effective and timely interaction between clients and suppliers. It is delivering speed, agility and cost reduction to IT and other functional areas within the enterprise. The transformative impact of cloud can readily be seen across the enterprise in areas from HR, CRM, and IT infrastructure.”
Steve Hasty, head of Global IT Advisory, Risk Consulting at KPMG, commented, “Cloud adoption is quickly shifting from a competitive advantage to an operational necessity, enabling innovation that can create new business models and opportunities. As this rapid adoption curve continues to gain momentum amid a struggling economy, it is important for corporate leadership, directors and boards to be informed and engaged in strategic discussions about Cloud’s impact on their long-term growth opportunities and competitiveness.”