Changes Coming as Companies Drive Growth in the Enterprise Cloud

July 21, 2016

By Susan J. Campbell - Enterprise Cloud Contributing Editor

The enterprise was once scared of the concept of cloud computing. The thought of moving proprietary data outside of the firewall and giving another company control is a scary concept. But the reality is cloud providers have proven that they not only provide better protection for the enterprise cloud, they also allow greater control over data.

For these reasons and more, the enterprise cloud is ready to boom. A recent eWeek piece highlighted the growth predicted by IDC (News - Alert). The research firm suggests there are 10 key areas of activity in the enterprise cloud computing industry as this segment of the market is ready to explode. We’ll take a look at a few of these activities and how they’re going to impact the market.

One thing apparent in IDC’s research is that the U.S. is leading the way to public cloud platforms. The research firm found that nearly 60 percent of all cloud revenue in 2019 will be generate in the U.S. Western Europe is a close second with 22 percent. Interestingly, Canada and Japan are considered advanced economies, yet they will represent only a fraction of total public cloud spending by 2019.

Still, regardless of location, enterprises are increasingly moving to the cloud. The good news is that we are well past the pilot stage and companies are readily embracing the opportunities afforded in the cloud. In fact, IDC found that 80 percent of businesses have either deployed or are fully embracing the cloud. Another 12.5 percent of businesses are at the very least evaluating a move to the cloud. Roughly 8 percent have indicated they have no plans or interest in the cloud, but this figure has dropped significantly from the 21 percent reporting in 2014.

For those who have embraced the enterprise cloud, budgets are shifting. While roughly half of all IT budgets are dedicated to traditional, in-house deployment of technology; this figure is expected to drop to 40.7 percent of the total IT budget over the next two years. In the same timeframe, public cloud spending will increase to 13.6 percent of all total IT budgets, compared with 10.5 percent now. Dedicated hosted public cloud service will also increase to 9.6 percent from 6.1 percent.

Finally, don’t be surprised if the CIO in your company ends up with a different title in a few years. Of the 200 CIOs interviewed by IDC, 57.4 percent said that they will transition to chief innovation officers within three years. In this position, these individuals will focus on IT projects that drive revenue growth. Another third of the CIOs surveyed will transition to a role of business service broker focused on expanding service capabilities.

Regardless of the end title, the reality that the enterprise cloud is here and making a significant impact on the market is creating opportunities and changing much of the focus within companies. The outcomes are expected to be significant as companies embrace this direction.

Edited by Maurice Nagle