The Future of Cloud Computing:

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1 The Future of Cloud Computing: Is The Cloud the Next Revolutionary Change for IT? Q3/Q Pulse Survey In partnership with:

2 Table of Contents Introduction Key Survey Findings What is Cloud Computing? How Do You Use the Cloud? What Prevents IT Organizations from Jumping into the Cloud? Should Cloud Computing Incorporate Current EA Strategies and SOA Principles? How Do You Get in the Clouds? Looking Ahead: What is the Cloud Computing Forecast Over the Next 10 Years?

3 The Future of Cloud Computing: Is The Cloud the Next Revolutionary Change for IT? The Future of Cloud Computing: Is The Cloud the Next Revolutionary Change for IT? Is cloud computing a short-term trend or a transformative movement in application, platform and infrastructure management? It s not an easy question to answer as we sit somewhere between the launch of this potentially groundbreaking approach and the time when the marketplace impact and value of cloud computing can be easily measured and quantified. Because the cloud computing movement poses such profound questions to the IT industry, MPS Partners and Microsoft have developed a pulse survey titled The Future of Cloud Computing: Is The Cloud the Next Revolutionary Change for IT? in order to measure the response of IT leaders. According to findings, cloud computing is here to stay. However, how fast cloud computing will take hold and its impact are yet to be seen. Just over half (57%) of respondents to the survey believe cloud computing will revolutionize IT or have a major impact, yet 66% of the respondents report having no strategy for implementation at this time. What are leading companies saying about cloud computing? Is cloud computing already making an impact and if so, how? Are we on the cusp of a new round of innovation in IT? Key Survey Findings Cloud computing is a technology that has potential for widespread impact for IT organizations of all sizes. With only 34% of respondents noting that they currently have an actual cloud strategy, it s clear that cloud computing remains more of a technology for conversation than implementation today. 66% of respondents do not have a cloud strategy, which tells us that IT organizations are hesitant to jump on the bandwagon without further proof of its ability to create more efficient IT operations, achieve better uses of infrastructure and bottom-line: save resources. Organizations have only touched the surface of the opportunities possible through cloud computing. 33% of respondents noted and calendaring as their primary uses for cloud computing, which indicates the majority of users are not tapping its full potential for enterprise-wide agility, productivity and streamlining. It s notable that 25% of respondents are using cloud computing for CRM and sales force 1

4 automation, which is a very effective use of the technology over on-premise software because of the mobile nature of sales force users. Low upfront investment and bottom-line savings seem to be important factors for cloud computing as more capacity for less money (52%), low upfront investment (51%) and low total cost of ownership (49%) were noted as extremely important. 64% of respondents noted application requirements as a hurdle to launching cloud computing. The cloud is not immune to concerns about security. 57% noted security as one of the biggest concerns with cloud computing. The way in which cloud computing works with existing technologies seems to be important to some and not as important to others. Integration with Service-Oriented Architecture (SOA) principles was very important for 89% of respondents. Enterprise Application Integration (EAI) strategy integration with the cloud, on the other hand, saw varied results with 37% saying it should be one in the same and 34% saying it should be slightly different. There is a dichotomy between those who think cloud computing is an important new direction in enterprise computing and those who see it as just one way to operate. Just over half of the respondents (57%) believe cloud computing will revolutionize IT or that it will have a strong impact. The remaining respondents either don t know or believe it will be a positive addition to IT, but won t be dramatic. What is Cloud Computing? Cloud computing is the phrase du jour these days. Most in IT have a general understanding of the technology, but when it comes to giving a definition, the answers vary. The term cloud, which is used as a metaphor for the Internet as a whole or applications that reside within it, offers businesses the opportunity for scalable and often virtualized control over their organization s technology infrastructure. The cloud hosts all the programs and applications that are typically housed on each individual computer or on an individual company server (on-premise). The intention of shifting to hosting these items within the cloud presents enterprises with fewer hardware and software demands, and dramatically increased efficiency. If integrated well, the cloud would allow businesses to be more nimble and reactive in the marketplace. Best Explanation of Cloud Computing From the choices: Software as a Service (SaaS), hosted applications, Web-based services, outsourced infrastructure, I don t know and other; the majority of respondents (40%) described cloud computing as Software as a Service. 28% split their explanation between hosted applications and Web-based services (14% each), and 23% explained it as outsourced infrastructure. 9% chose other describing it as a combination of the above components. Given the uncertainties currently present with the cloud, the inability to articulate a definition is not surprising. 2 PULSE SURVEY

5 The Future of Cloud Computing: Is The Cloud the Next Revolutionary Change for IT? Cloud Computing Strategy When asked the question, Does your organization currently have a cloud computing strategy? the majority responded no (66%). The remaining 34% do currently have a plan to either implement or strengthen their existing cloud computing strategy. Of the 66% who do not currently have a strategy, 62% have no short- or long-term plans to implement one. Only 4% have a strategy laid out for implementation 6 to 12 months from now, and 16% have plans for implementing a cloud computing strategy anywhere from 1 to 3 or more years from now. 18% of survey participants did not know whether or not their organization had a strategy. How Do You Use the Cloud? With the goal behind cloud computing being to increase operational efficiency and reduce capital investments, it appears as though organizations have only touched the surface of possible opportunities for enterprise-wide impact. Surprisingly, only 25% of respondents noted CRM and sales force automation as a current use of cloud computing even though tools like Salesforce.com have been providing offpremise services for years. In fact, when integrated correctly, the potential for increasing operational efficiency is astounding. As described in an article in the October 12, 2009, edition of the Chicago Tribune, Microsoft Predicts Cloud Will Burst with Growth, Opportunity, the cloud will become like a one-stop shop. As shared in the article, Instead of managing systems of their own, government agencies, companies and millions of individuals will tap into a one-stop shop for their digital needs. This is the promise of cloud computing. The main reasons IT leaders give for adopting cloud computing include low upfront investment, low total cost of ownership, rapid speed to market, greater functionality for less money, more capacity for less money, extra processing for peak seasons and ease of application deployment. 3

6 Current Uses of Cloud Computing Because cloud computing is so new to IT, it s interesting to learn how those companies who do have a strategy are using it. Of the 34% who responded that they do have a cloud computing strategy, the main use noted was for and calendaring (33%). Tied for second with 25% noted in each area were CRM and sales force automation, and other. Other included things like payroll, HR, non-core business processes, B2B e-commerce and freight management. The remaining 17% noted using cloud computing for collaboration. Reasons for Adopting Cloud Computing Respondents are adopting cloud computing for a variety of reasons, all of which were noted as relatively important to respondents. However, more capacity for less money (52%), low upfront investment (51%) and low total cost of ownership (49%) were noted as extremely important. The least important of the above reasons included extra processing for peak seasons (35%), rapid speed to market (37%) and greater functionality for less money (38%). What Prevents IT Organizations from Jumping into the Cloud? With all the build up touting cloud computing as extremely easy to implement and its potential to yield business-changing results, organizations are still holding off. This hesitancy is not surprising considering IT leaders are unsure of the technology and are likely to not have the resources to properly evaluate it due to the current state of the economy. Furthermore, while cloud computing is a relatively cost-effective platform to deploy, its still new infrastructure. Right now, you either buy something running in the cloud (SaaS) or you buy on-premise software. If companies have current investments that are still depreciating, they can t just walk away. 4 PULSE SURVEY

7 The Future of Cloud Computing: Is The Cloud the Next Revolutionary Change for IT? Security is another reason companies are holding back from the cloud. As with technology in general, security rises to the top as a significant concern. But with cloud computing, the security risks are unique. Beyond the typical issues with IT security, cloud computing poses additional risks with things like data integrity, recovery and privacy, as well as regulatory compliance by vendors, segregation of data and security of data in the event the vendor is acquired. Greatest Hurdle to Launching Cloud Computing 64% of respondents noted application requirements as the main hurdle in launching cloud computing. Beyond application requirements, education was noted by 18% of respondents followed by technical skills (9%) and funding (6%) as presenting hurdles to implementation. Biggest Concerns with Cloud Computing A majority of respondents (57%) noted security as the biggest cloud computing concern. Support came in second in terms of concern with 26%, and long-term cost and scalability were of significantly less concern with 11% and 3%, respectively. 5

8 Should Cloud Computing Incorporate Current EAI Strategies and SOA Principles? Based on our findings, just how cloud computing fits in with current business approaches is unclear. When respondents were asked about the influence of EAI strategy on a cloud integration strategy, the responses were mixed. Some thought strategies should be the same while others thought they should be significantly different. There wasn t an overwhelming response in either direction. However with SOA and cloud computing, the responses were much different. A strong opinion exists that since SOA infrastructures are intended to enhance the efficiency, agility and productivity of an enterprise, those principles should be fully integrated with the cloud. As businesses continue to learn more about cloud computing and ways it can work with existing technology or not the opportunities for cloud within a specific business will become more apparent. Influence of EAI Strategy on a Cloud Integration Strategy 37% of respondents said that strategies should be one in the same and 34% said they should be slightly different. 17% thought the strategies should be separate and significantly different, while only 6% think there should be little to no relation at all between the two strategies. Importance of SOA Principles to Cloud Computing A full 89% of respondents view the principles of SOA as very important (63%) or somewhat important (26%) to cloud computing. It s clear that for those organizations with plans to implement cloud computing or for those who already have implemented the technology, integration of the existing SOA is significant. 6 PULSE SURVEY

9 The Future of Cloud Computing: Is The Cloud the Next Revolutionary Change for IT? How Do You Get in the Clouds? The development of cloud computing has created competition among vendors that may work in the customers favor. Global technology manufacturers and IT solution providers like IBM, Microsoft, Oracle and SAP are all working diligently to offer the most desirable cloud computing platform and dominate the cloud computing sector. Use of Middleware Products for EAI or SOA Among the options presented (IBM WebSphere, Microsoft BizTalk, Oracle ESB, SAP PI and I don t know), Microsoft BizTalk was by far (45%) the most frequently used middleware product for EAI or SOA. The second most frequently used middleware product noted was IBM WebSphere (21%) and then the use of other middleware products fell significantly with a mere 7% noting Oracle ESB and 3% noting SAP PI. Best Equipped Middleware Products for Integration with Cloud Computing In terms of which middleware product is best equipped for integration with cloud computing, a resounding 67% reported that they do not know. The other 33% noted Microsoft BizTalk (18%), IBM WebSphere (9%) and Oracle ESB (6%) as being best equipped. These percentages tell us the level of uncertainty as to how best to integrate the cloud, as well as the opportunity for vendors to demonstrate their products potential is high. Effectiveness of Cloud Computing Platform Vendors When asked to consider whether Amazon Cloud, Google, Salesforce.com or Windows Azure is most effective based on experience and knowledge of the platforms, Salesforce.com (31%) and Google (27%) rise to the top. Windows Azure is an emerging cloud platform that seems to be gaining momentum on the cloud platform radar. 7

10 Looking Ahead: What is the Cloud Computing Forecast Over the Next 10 Years While the future of cloud computing is open for debate, one thing is certain: over half of the survey respondents believe cloud computing will not only have a strong impact, it will revolutionize IT operations and service delivery. As businesses continue to look to IT for innovative ways to work more efficiently, concepts like cloud computing are a perfect example of exploring new approaches that add value. At the same time, companies should be cautioned not to invest in the technology without determining how best to integrate within existing, on-premise infrastructures. Responsible businesses will take a look at current infrastructure investments and determine how, together with cloud computing, to continue realizing the maximum value. As with any new technology, identifying all the areas impacted by the cloud, thoroughly mapping out its functionality, and creating a solid plan to implement and integrate cloud computing will be the best bet for yielding desired results. So as it stands today, cloud computing may appear to be a trend full of hype, but one that may just move into reality and continue to shape the future of IT. MPS Partners is committed to keeping a pulse on cloud computing. One of the ways is by conducting ongoing pulse surveys to explore the progress and development of the cloud, and the effect it is having on business. With the promise of increased efficiency and cost reduction, it behooves all in the world of IT to stay abreast of pertinent developments in this budding technology. For the Q3/Q report, MPS Partners surveyed a select group of IT executives across Illinois and Wisconsin resulting in 40 respondents who provided their insights and opinions on the future of cloud computing. We anticipate an increase in response rates as the cloud evolves into an enterprise priority. We look forward to sharing ongoing cloud insights in upcoming pulse surveys and events. 8 PULSE SURVEY

11 About MPS Partners MPS Partners is a leading provider of business and technology solutions that turn vision into value using Microsoft technologies. Their customized, project-based offerings deliver people ready solutions to mid-market and enterprise-sized businesses. A Premier Microsoft Solutions Partner, MPS Partners is the recipient of Global Microsoft partnership recognition and is known for their depth of business and product expertise. As thought leaders, their long list of accomplishments includes published books and keynote presentations at Microsoft and other industry events. To learn more or to schedule a cloud readiness assessment, please contact Chris Kabat, Vice President of Connected Business Systems at or Visit us online at

12 Microsoft is a trademark of the Microsoft group of companies SPR Companies. All rights reserved.

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