Enterprises continue to move their IT infrastructure and business applications to the cloud in a bid to transform digitally.
Enterprises worldwide are using external hosting and cloud services to underpin their infrastructure, applications, security and digital transformation – and this spending shows no signs of abating. According to analyst firm IDC, the total spend on IT infrastructure deployed in cloud environments is forecast to hit $44 billion in 2017.
Cloud-first, and in some cases, cloud only, is rapidly becoming the norm. “Cloud will increasingly be the default for software deployment. The same is true for custom software, which increasingly is designed for some variation of public or private cloud,” says Jeffrey Mann, research vice president at Gartner, who believes that moving forward practically every organization will have something in the cloud.
IDC forecasts that by 2020, organizations' spending on cloud services, the hardware and software to support cloud services, and services for implementing and managing cloud services will exceed $500 billion. One of the key drivers in moving to cloud is improving workplace efficiency, collaboration and productivity by introducing technology that users want to use.
Enterprises choosing bundled services
Hosting and cloud providers often position themselves as key enablers of the infrastructure, yet 451 Research estimates that only 30 percent of enterprise budgets for hosting and cloud is spent on infrastructure services. The remaining 70 percent is being spent on other services, primarily application services, followed by managed services and security services.
“The markets for unmanaged IaaS and SaaS are dominated by large, hyper-scale vendors. However, this spending trend indicates there is an appetite for the type of bundled services a broader market of managed service providers are well positioned to deliver,” explains Liam Eagle, Research Manager at 451 Research. Enterprises are looking for a “diversified set of hosting and cloud services that includes infrastructure and application hosting, as well as managed services and security services delivered around them.”
Public cloud continues to gain momentum
As the cloud market matures, more organizations are looking to adopt public cloud services. According to Gartner, the top driver for public cloud adoption is IT modernization, followed by cost savings, innovation and agility. This shows a sophisticated and strategic use of public cloud services, maintains the analyst firm. Not only are public cloud services being used to recognize economies of scale and innovation, they are also being used as a foundation for digital transformation.
The potential savings from deploying Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (IaaS) for IT departments is also helping drive the public cloud market. “Growth of public cloud is supported by the fact that organizations are saving 14 percent of their budgets as an outcome of public cloud adoption,” says Sid Nag, research director at Gartner.
The flexible computing trend is helping enterprises migrate their legacy enterprise applications to the cloud for improved IT extensibility and business agility. It also puts a stake in the ground for hybrid cloud, which Gartner forecasts will be the most common usage of the cloud – and one which requires public cloud to be part of the overall strategy.
“More leading-edge IT capabilities will be available only in the cloud, forcing reluctant organizations to adopt cloud,” explains Yefim V Natis, vice president and Gartner Fellow. “While some applications and technologies will remain locked in older technologies, more new solutions will be cloud-based, thus further increasing demands for integration infrastructure.”
Cloud is the engine behind digital transformation
Our 24/7 connected world is changing the way organizations do business. Successful digital transformation is imperative for enterprises to avoid being sidelined. Cloud is crucial in building a digital-ready infrastructure.
Digital transformation is now top of the agenda for almost every CIO as the Internet and cloud have a tectonic effect on how business operations are structured. Analyst firm Forrester has gone as far as predicting digital transformation budgets will top the billion dollar mark this year.
Orange Business, for example, is helping the European Space Agency (ESA) through its digital transformation by deploying a reliable, flexible and robust private cloud solution that is already enhancing collaboration and providing improved productivity across geographically dispersed locations.
Cloud maturity
Cloud is letting organizations build rapidly, run more swiftly and operate anywhere. The next step will see companies taking a bi-modal style approach to cloud. Many enterprises have already moved their innovative and agile applications to the cloud. Now it is time to migrate their legacy applications, so that everything finally sits neatly in the cloud.
To find out how Orange Business cloud computing can empower your organization. Read about the new partnership between Orange and Huawei that will help businesses move their legacy applications in the public cloud.