Business Objectives Drive the Shift to Cloud Services

Adoption of cloud computing services continues to accelerate as organizations move from limited deployments to comprehensive solutions, according to the latest market study by CompTIA, the non-profit trade association for the information technology (IT) industry.

More than half (56 percent) of the organizations surveyed for the CompTIA study said their investment in cloud computing will increase by 10 percent or more over the next 12 months.

“This additional investment will likely be accompanied by greater complexity in the overall cloud strategy, such as moving to a hybrid cloud model or adopting more advanced services beyond Software as a Service (SaaS),” said Seth Robinson, director, technology analysis, CompTIA. ”Organizations may begin exploring options such as Infrastructure as a Service (IaaS) and Platform as a Service (PaaS), which will allow them to experiment with custom application development.”

IT departments are often a key driver behind the transition to managed cloud services, but the CompTIA study suggests individual business unit leaders within an organization are equally or perhaps more likely to now seek out the benefits of a cloud service deployment.

About one in five (21 percent) companies surveyed said that line of business leaders championed the transition to a cloud solution -- independently of their IT department.

“Most SaaS applications are easily accessible through the Internet, making it relatively easy for business employees to use them without involving the IT staff,” Robinson said. “But there are risks in this approach, as lines of business often do not have the same awareness of security and reliability as the IT department.”

Demand for Procurement and Implementation Guidance

That being said, apparently the results from the study provided no specific evidence of where CIOs or other IT managers demonstrated security breaches -- as a result of business leaders leading the shift to managed cloud services.

However, the CompTIA study findings did indicate that there's growing interest throughout these organizations to invest more in cloud computing education and thereby learn about the technology deployment considerations.

Although the mainstream business manager's understanding of cloud computing has improved over the past year, many users continue to have questions regarding details of cloud service implementation.

The 2010 CompTIA cloud computing study found that 60 percent of end users desired a clearer definition of cloud computing. In 2011, that number increased to 66 percent.

Areas where users want more clarity include the types of cloud computing offerings (Software as a Service, Platform as a Service and Infrastructure as a Service) and the types of deployment models (public cloud, private cloud or hybrid cloud services).

Attainment of Business Objectives Drives the Shift to Cloud

Organizations that have invested the time to learn about -- or are experimenting with -- cloud solutions indicate they have a higher level of comfort with cloud computing offerings. Approximately 72 percent of these organizations feel more positive about cloud computing now than they did one year ago. Another 25 percent of survey respondents report no change in their perception.

“For those who feel more positively about the cloud than they did a year ago, the primary reasons are the technical benefits and the ability to achieve other business objectives,” Robinson noted. “This finding is in line with data from other CompTIA surveys, where the primary advantage of cloud computing appears to be increased capability, not cost savings."

Note: the survey included 500 IT business professionals and other key decision makers within the U.S. market.

The Top Five Vertical Markets for IaaS Offerings

The cloud computing phenomenon now includes a set of services and technologies that enable the delivery of on-demand computing services over the Internet in real-time, allowing end-users instant access to data and applications from any device with online access.

Although still in its infancy, gaining traction has not been a problem. According to the latest market study by In-Stat, Infrastructure as a Service (IaaS) is set to grow to roughly $4 billion by 2015.

"Growth is expected in all public cloud service segments," says Greg Potter, Analyst at In-Stat.

Many Software-as-a-Service (SaaS) applications have been around for a long time, but now with the advent of entire platforms for these applications they're gaining the necessary visibility among businesses to reach renewed momentum in the marketplace.

Infrastructure-as-a-Service (SaaS) is also gaining increased traction, especially in the small business market.

In-Stat's latest market study includes the following insights:

• SaaS (software as a service) is poised to grow 142 percent between 2010 and 2015.
• Overall public cloud computing (IaaS, SaaS, and PaaS) is set to grow 153 percent from 2010 to 2015.
• Small business (5 to 99 employees) is the fastest growing size segment growing from $2.5 billion by 2010 to $6.6 billion by 2015.
• Small business account for over half of the market in SaaS and IaaS.

According to the In-Stat assessment, the top five vertical markets for IaaS offerings, in terms of 2011 market revenue, will be hospitality and food, healthcare and social services, and retail trade. The bottom 5 verticals will be mining, forestry, fishing, and agricultural services and utilities.

How Healthcare IT will Migrate to Cloud Services

According to the findings from a global market study, the healthcare sector has a highly complex IT environment that's supporting a very diversified professional user population (i.e., clinicians) -- along with their patients in life-critical situations. The industry is currently facing growing economic and regulatory pressures that make its IT infrastructure primed for change.

Therefore, all organizations will likely consider the potential benefits of migrating to cloud computing. Improvement in the quality of healthcare services is a key driver for managed cloud service adoption.

Billions of dollars of federal incentives are provided for the delivery of quality healthcare services, and expanding the use of electronic health record (EHRs) systems -- as well as providing the basis for the exchange of information and data across and between the providers. These EHR systems are expected to be used extensively by 2014.

Another significant opportunity is the consumer-oriented cloud application -- offering the potential of improving healthcare communications and enabling patients to manage their own medical records. The cloud platform fits well with new business models, which often require uninterrupted access from multiple providers to a single patient, such as a Patient Centered Medical Home (PCMH) model or Accountable Care Organization (ACO).

Cost Reduction Potential Across the Ecosystem

Reducing costs in the healthcare industry ecosystem is a key motivation for cloud service adoption. This is true for all healthcare organizations, irrespective of their size and area of specialization. In making future IT investment decisions, health organizations will likely measure the return on investment closely. For many new Health Information Exchange (HIE) models, the infrastructure is already in place.

In today’s healthcare system, access to good facilities often depends on the physical location. As more health data moves into the cloud and telehealth technologies become popular, everyone will be able to access health information in real-time from anywhere. The result will be better access to healthcare and relevant data, especially in the remote areas. However, risks around data privacy, security and safety, and state specific policy rules are among the top concerns raised for the adoption of cloud computing.

As a result, these issues currently are the greatest barriers for embracing cloud computing. However, according to the MarketsandMarkets assessment, the data security issue has the potential to increase cloud service adoption. By centralizing and standardizing handling of patient data across the healthcare ecosystem, the cloud could enable stronger security and authentication measures to be imposed by SaaS (software as a service) providers, thereby actually improving protection and integrity of data.

According to MarketsandMarkets latest research, globally 32 percent of healthcare facilities are already using some form of cloud application. Moreover, close to 75 percent of the organizations not using any cloud applications are already considering adopting them in the next three to five years.

In summary, the top priorities for the healthcare industry are:

• Improvement in the quality of healthcare services.
• Reduction of costs.
• Increasing access to the healthcare systems.
• Data privacy and security.