Is Cloud Adoption Dissipating?

Silver Lining

Is Cloud Adoption Dissipating?

By Erik Linask, Group Editorial Director  |  January 25, 2013

This article originally appeared in the Q1 -2013 edition of Cloud Computing Magazine.


When you look at what’s happened in the cloud computing space in the last 12 months, it’s nothing short of remarkable. A year ago, I noted that the increase in mobile app usage in the consumer segment, as well as enterprise adoption in a range of use cases, would help sustain its growth.

The consumer market will continue to support service provider cloud utilization – it’s the only way they can support subscriber demand, and also the only way they can efficiently and cost effectively store, analyze, and monetize the incredible amount of data those users generate.

On the corporate side, while cloud will continue to grow – 82 percent of businesses are using Software-as-a-Service (SaaS) applications in some capacity already, according to the 2012 Future of Cloud Computing survey by North Bridge Venture Partners. A JP Morgan (News - Alert) study earlier in 2012 indicated that 55 percent of corporate CIOs planned to increase their SaaS spending this year.

Largely, this is a function of mobility, which has become an inseparable component of today’s business environment. Business agility and mobility were two of the top five drivers of cloud growth, according to the North Bridge study.

However, while cloud is changing the way we define software, and the way we are able to perform our daily activities, the coming year will bring a slowdown in the growth of cloud.

First, we are past the early adopter stage. While cloud is, in fact, a mainstream technology that recognition also means the next stage of growth, while sustainable, will not be as sharp as initial adoption. It rarely is. The benefits of cloud computing have been widely documented by vendors, customers, and media alike. So, why will growth slow?

·         Existing investments – as with any technology, one of the key factors in delaying adoption is a desire to maximize ROI on existing investments. Why pay a recurring fee for cloud services when your existing software is still able to support your needs?

·         Long-term costs – There is no question cloud helps reduce CAPEX, but whether it is most cost effective than traditional alternatives in the long term is debatable. Proving the TCO benefit will prove difficult for many. In fact, the North Bridge study suggests that some businesses are finding that cloud does not lower TCO.

·         Security – Significant strides have been made, but breaches serve as a constant reminder that the hacker community is half a step ahead of the vendors, causing some businesses to shy away altogether and others to limit what they migrate to the cloud.

·         Standards and Interop (News - Alert) – Because businesses will often prefer to use multiple cloud providers, for redundancy as well as specialized services, they require interoperability between those providers, which, due to a lack of complete and ratified standards, is not yet reality.

·         Service Quality – Cloud services need to be monitored, just as any other service. Most of today’s monitoring tools are not capable of incorporating multiple clouds or hybrid cloud/on-premises environments, making it difficult and costly to have end-to-end visibility.

·         Access – We are still nowhere near ubiquitous reliable access – signal strength and bandwidth limitations still plaque public access points. If you’re outside your home or office, this means access to cloud resources is still hit or miss in many cases, causing many to still lean towards traditional deployments.

·         Vendor vs. User – In many cases, there is a significant gap between user and vendor sentiment regarding and or all of these factors, which must be reduced in order for adoption rates to be maximized.

None of this should be viewed negatively. Rather, they are signs of maturity in a market that, only a year ago, was faced with more questions than it could answer. Today, organizations are doing real business in the cloud. More will continue to adopt cloud services. They will just be cautious and make their cloud investments wisely.

Edited by Brooke Neuman
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