Cloud computing projects are soaring in the IT priority list

ESG's recent 2011 Budget Intent survey shows that spending on cloud infrastructure and services is expected to grow this year. At the end of 2009, when we asked respondents about their company's it priorities for 2010 and the first half of 2011, cloud Computing and software Services (SaaS) ranked 22nd and 24th, respectively, in all 24 priority list items. At the end of 2010, when we asked about it priorities in 2011 and the first half of 2012, respondents put cloud computing in the first half of the list (12th) and SaaS was 14th.

This bodes well for cloud infrastructure and service providers, and suggests that cloud research done by users at the end of 2010 could eventually become a real investment in 2011.

Cloud Application Survey Background

To assess it input priorities for the next 12-18 months, ESG recently surveyed 611 senior IT professionals in North America and Western Europe representing the midrange market (100 to 999 employees) and the Enterprise (1000 employees or more) market. As part of this survey, we asked questions about SaaS and infrastructure as a service (IaaS). The survey defines these two cloud-related concepts as follows:

SaaS: A software distribution mechanism in which applications are hosted by manufacturers or service providers and are provided to customers via the network, usually the Internet.

IaaS: A computing model in which devices, including servers, storage, and network components that are used to maintain a company's operations, are provided by a service provider, usually the Internet, to users via the network. The service provider owns those devices and is responsible for the placement, operation and maintenance of the equipment, and the customer usually pays for the number per user.

Cloud Acceptance trends

34% per cent of respondents are currently using SaaS, and surprisingly, 91% per cent said the company would spend at least part of its budget on SaaS applications in 2011 years. But even for companies that already use SaaS, their utilization is low; most (70%) use SaaS to deploy less than 20% of applications. Only 15% of respondents offered 31% or more apps through SaaS.

When users think about how they deliver apps in three years, things change a lot: the percentage of respondents who use SaaS "less than or equal to 20%" is reduced to 39%, while the proportion of respondents who use SaaS "over 31%" increases to 30%.

Respondents use SaaS delivery applications that include a variety of enterprise applications, from financial and accounting applications to security, but the most likely application of SaaS delivery is customer relationship management (CRM) and mail, which is not surprising given the amount of data produced by the application.

Among our respondents, IaaS is less used than SaaS, with 17% currently using IaaS to meet their infrastructure needs. But there is also an upward trend in IaaS, with 81% of respondents saying they would use a piece of their 2011 budget for the technology.

The facts of cloud application

There are few technologies that can maintain a cloud-like heat among it users and vendors. Generally speaking, new technology can not meet the expectations and the commitment of the supplier. There are several reasons why clouds can sustain this trend, and one of the important reasons is that it seems that everyone is opinions on the subject of "Yunwei". ESG believes that the cloud will ultimately be a service delivery model where applications (and/or infrastructure) are provided to users in the form of services. The question of whether a "private cloud" can be counted as a cloud or just a service-oriented it architecture in the user and vendor circles is not yet conclusive.

Our consumer surveys show that reducing costs, especially operating costs, remains the biggest driver of it decisions in the 2011, and that the cloud certainly looks like a way to help reduce the total cost of it ownership. Because the value orientation of IaaS and SaaS is related to cost reduction, we specifically ask users about ways to reduce costs and see cloud technology as a viable solution. Companies that are lowering/controlling costs have shown more willingness this year (2011 23%, 2010 17%, 2009 13%) to consider cloud computing services as a means of reducing it costs.

Can cloud strategy be renewed in 2011? Our survey shows that they will, at least from the end user's perspective, yes. Because 2010 is basically about cloud talking and hype, and end users have shown their willingness to invest in this area in the 2011, and it seems that suppliers must "either come true or shut up" and provide the cloud they have been doing for a long time, providing truly cost-effective, secure and usable IT services.