Digital Planet: Cloud Computing Moves to Second Adoption Wave

Cloud computing is moving into a second wave of adoption, with companies no longer focusing just on efficiency and reduced costs, but rather looking to cloud as a platform to fuel innovation, growth and disruption, according to a study released by Cisco.

The study finds that 53% of companies expect cloud to drive increased revenue over the next two years. Unfortunately, this will be challenging for many companies as only 1% of organizations have optimized cloud strategies in place while 32% have no cloud strategy at all.

The Cisco-sponsored InfoBrief was developed by IDC and is based on primary market research conducted with executives responsible for IT decisions in 3,400 organizations across 17 countries that are successfully implementing private, public and hybrid clouds in their IT environments.

In the study IDC identifies five levels of cloud maturity: ad hoc, opportunistic, repeatable, managed and optimized. The study found that organizations elevating cloud maturity from the ad hoc, the lowest level to optimized, the highest, results dramatic business benefits, including:

  • revenue growth of 10.4%
  • reduction of IT costs by 77%
  • shrinking time to provision IT services and applications by 99%
  • boosting IT department’s ability to meet SLAs by 72%
  • doubling IT department’s ability to invest in new projects to drive innovation.

The study also quantified the economic benefits the most mature cloud organizations are realizing. Organizations studied are gaining an average of US$1.6 million in additional revenue per application deployed on private or public cloud. They are also achieving US$1.2 million in cost reduction per cloud-based application.

The revenue increases were largely the result of sales of new products and services, gaining new customers, or selling into new markets. Organizations were able to attribute revenue gains to increased innovation resulting from the shifting of IT resources from traditional maintenance activities to new, more strategic, more innovative initiatives.

Operational cost reductions associated with cloud stem from the advantages to the business of running on a more scalable, reliable, and higher-performing environment. These include improved agility, increased employee productivity, risk mitigation, infrastructure cost savings and open source benefits.

By Networks Asia Staff

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