We've all just about had it with monolithic proprietary systems that cost lots of money in purchase costs and annual service, require expensive customizations in order to get anything actually done, with frequent upgrades requiring additional consulting services just to do the upgrade, followed by yet more consulting services to port the previous customizations to the upgrade, and on and on and on.
Per Cloud Powering an Enterprise, business always strives to do three things simultaneously: 1) sustain existing products and services; 2) grow them; and 3) introduce new ones. Gartner labels these activities "run, grow, and transform."
According to Gartner in 2011, 66% of IT spending is focused on "run" (sustaining existing stuff), 20% is focused on "grow" (improving existing stuff), and only 14% of IT spending is focused on "transformation" (creating new value).
Now that doesn't mean there isn't a role for on-premise software. Far from it. But as we think about how to meet the challenge of rapidly deploying new Systems of Engagement, it doesn't take a rocket scientist or a brain surgeon or [insert other really smart people] to realize that something needs to give. We have to find new, more cost effective ways to deploy new systems and we need to find ways to save on legacy Systems of Record. Cloud solutions can provide a way to save money on our legacy systems, and also provide new ways of more quickly deploying transformational technologies.
A couple of data points to consider
- 60 percent of organizations are ready to embrace cloud computing over the next five years as a means of growing their businesses and achieving competitive advantage. The figure nearly doubles the number of CIOs who said they would utilize cloud in the previous 2009 study (IBM Survey of 3,000 global CIOs).
- The total size of the public cloud market will grow from $25.5 billion in 2011 to $159.3 billion in 2020. The market for virtual private cloud solutions will grow from $7.5 billion in 2011 to $66.4 billion in 2020. The market for private cloud solutions will grow from $7.8 billion in 2011 to $15.9 billion in 2020 (Forrester, Sizing the Cloud).
- Cloud computing spending among SMEs (1-1,000 employees) will double between 2010 and 2015 from $6.3 billion to $13.3 billion (In-Stat, http://www.instat.com)
However, this is easier said than done. Cloud computing is a lot like teenage sex; not nearly as many people are doing it as are talking about it. The data suggests that organizations are having a difficult time making the transition.
- 33% of organizations have a generic IT strategy for moving to the cloud. 12% do not, and 55% are still undecided. (Process Revolution: Moving Your Business from Paper to PC to Tablet)
- 28 percent of US organizations currently using cloud computing. [CDW Cloud Computing Tracking Poll]
- 1/3 of organizations still unlikely to use cloud-based or SaaS solutions. [AIIM – State of the ECM Industry]
The net-net is that the business needs to DEMAND that IT embrace the cloud. Not just experiment with it or consider it or ponder it or look at it when they have a chance. Cloud be a part of every IT decision, not an afterthought.
