We forecast that worldwide revenue from outsourced enterprise cloud-based services will almost treble between 2010 and 2015, growing from USD12.1 billion to USD35.6 billion. This makes it one of the biggest growth opportunities in the ICT industry.
The market for outsourced enterprise cloud-based services has been one of the few ICT areas to benefit from the fragile economic climate, which has placed cost reduction and greater efficiency at the top of many businesses’ priorities. The opportunity to transfer IT expenditure from capex to opex, as well as the agility and flexibility of the cloud-computing model, have made such services particularly attractive.
Despite this, enterprises are unlikely to migrate en masse from traditional IT infrastructure to cloud-based solutions. Various concerns – notably around vendor lock-in and data security – are preventing organisations from fully embracing outsourced cloud-based services. Instead, most organisations are:
- using outsourced cloud-based services to provide additional computing capability on-demand. The latest generation of services, such as Steria’s Infrastructure On Command, is delivered through an online self-provisioning portal, and can be available in as little as 20 minutes after the order is placed. This eliminates the need to adjust the scale of in-house IT infrastructure to meet peak-time requirements.
- moving non-critical applications to outsourced cloud services. This takes the burden of routine maintenance tasks away from the IT department, which enables it to focus on more strategic activities and gives the enterprise an opportunity to cut IT resources. A recent survey carried out by Information Age among 272 senior IT managers in the UK indicated that 29% of respondents’ IT departments spent between 60% and 80% of their time on maintenance.
- trying out new applications in the form of outsourced cloud-based services. This reduces the initial investment required to implement a new application, while minimising risk. For some smaller organisations, cloud-based services may be the only affordable way to benefit from enterprise-grade applications.
Therefore, the market will be driven by partial, selective adoption of outsourced cloud-based services in order to meet specific needs. This will result in a prevalence of hybrid computing environments, in which outsourced services complement traditional in-house deployments.
In addition, many organisations are either considering or implementing private clouds, in an attempt to yield the benefits of both approaches.
- Using cloud technologies, notably virtualisation, enables organisations to optimise their IT infrastructure, as well as introduce new business models for the provision of internal IT services. This delivers some of the efficiency and flexibility associated with outsourced services, although the enterprise still bears the costs of owning the infrastructure.
- Bringing the cloud in-house enables organisations to address the two key concerns about outsourced services: vendor lock-in and data security.
During the past year, NASA has been developing Nebula – a private cloud-based platform – to provide the computing capability required to securely manage its scientific data sets. Earlier this month, NASA announced that OpenStack would incorporate Nebula technology in its newly launched open-source cloud-computing initiative. OpenStack will enable organisations to avoid the risk of being tied into a vendor-specific solution.
The co-existence of different computing environments will result in more-complex integration issues – particularly at the higher end of the market. Such challenges are best left to systems integrators, which have the required skills and experience. To gain a share of the rapidly growing cloud-based services market, network and cable operators that are moving up the value chain should focus on the SME market, because SMEs will typically opt for standalone or pre-integrated applications.
To find out more about the opportunity for cloud-based services from our experts, please sign up for our forthcoming free Webinar.
