Why the Cloud is the Future for Business

February 19th, 2014

A business manager looking up to the sky


By virtue of its cost advantages, cloud computing has a democratising effect on access to new, agile technologies. In addition, cloud technology supports mobile access for geographically dispersed workforces. Here are some trends that suggest the cloud is the future for business information technology.

Business demand is driving growth

The Future of Cloud Computing Survey (commissioned by North Bridge Venture Partners and produced by GigaOM research) shows that business demand for cloud solutions continues to grow at a rapid pace. Here are some of the findings:

  • Cloud grew in 2013. Cloud adoption grew by 67% between 2012 and 2013. One in three survey respondents said they already used some type of cloud platform.
  • Increasing value. More respondents were finding that cloud applications improved business priorities (as opposed to IT priorities).
  • Total cost of ownership. A large percentage (68%) of survey respondents believe that migrating to the cloud brings equal or better total cost of ownership.
  • Total addressable market to exceed US$158 billion.GigaOM Research’s figures suggest that the global total addressable market for cloud computing will jump by 126.6% to exceed US$158 billion by 2014.

There is evidence to suggest that business demand is behind the growth of cloud because organisations are seeking options that offer better agility, scalability, and productivity.

Cloud technology is reinventing the software and IT industries

Some of the credit must go to the nature of cloud computing itself. Cloud computing currently offers the possibility of ‘everything as a service’, which means services can be deployed to match specific tasks, projects, jobs, and levels of expertise. ‘Platform as a service’, hybrid cloud services, and multi-cloud providers are also expected to grow in the coming years. This not only has the potential to improve total cost of ownership, it offers the possibility of an even higher level of flexibility and agility in IT systems.

BYOD to BYOC

Some companies are already anticipating the shift from ‘bring your own device’ (BYOD) to ‘bring your own cloud services’ (BYOC). For example, with open application program interfaces, businesses can outsource absolutely everything except for their core business activities.

The future of cloud computing

The Future of Cloud Computing Survey suggest that security concerns are losing force as an inhibiting factor against the adoption of cloud solutions, with the proportion of respondents recognising it as an inhibitor declining from 55% to 46%. Complexity of managing IT, vendor lock-in, and interoperability are some of the other inhibiting factors listed by the surveyed organisations.

On the other hand, the survey results reveal that the transition to cloud computing is largely driven by cost (48% of respondents recognise lower cost as a motivating factor), but mobility is another key driver (25%). Innovation (22%) and competitive advantage (14%) are also listed as reasons for adopting cloud solutions.

Hence, while traditional barriers to adoption remain, there is a strong perception among businesses that cloud computing offers unique, even crucial, benefits. This perception is likely to continue driving the growth of cloud computing, guaranteeing its role as a major business technology tool for many years to come.

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