Cloud computing to remain high on the agenda in 2013

Laurent Lachal, Senior Analyst, Ovum Software

Cloud computing has emerged as a major disruptive force for both IT vendors and users. It is still very early days, and 2013 will see cloud computing continue to evolve rapidly as vendors and enterprises get to grips with the opportunities and challenges it represents. In the Ovum report, 2013 Trends to Watch: Cloud Computing, Ovum points out that cloud computing is an increasingly crucial IT and business enabler.

Enterprises are slowly coming to terms with it, and vendors are experiencing similar issues as those faced by enterprise users, only on a larger scale. In the meantime, apart from its roles as a user and regulator, the public sector is increasingly focusing on its economy-manager role, and many countries have ambitions to use cloud computing to boost the local economy as they continue to face economic difficulties.

A quick search on Google Trends reveals that interest in cloud computing is waning. The market is by now tired of the hype, and more importantly, it has moved on. It has not, however, moved beyond cloud computing, but it has moved on to search for, and talk about, what it does with it at two levels: IT and business. Ovum anticipates that in 2013 the “cloud computing as an enabler” debate will increasing shift toward the way in which cloud computing can enable new business models and supply chains. The focus now is mostly on IT and the way in which cloud computing is enabling a new wave of applications, such as social, mobile, Big Data, e-commerce, and entertainment.

Enterprises continue to come to terms with cloud computing

Overall, at the moment, Ovum estimates that while less than one-fifth of companies are getting serious about cloud computing, more than one-third have dipped a toe in, and the rest have yet to jump on the bandwagon. However, all enterprises, irrespective of their current location on the journey toward cloud computing, acknowledge the importance of the trend as one of their top priorities and have the intention to tackle it sooner rather than later. Investments will remain limited in 2013. Too many organizations have yet to pull themselves together around a clearly defined strategy. They will increasingly do so, although many will work at “cloud computing-enabling IT” rather than “transforming the business via cloud computing”.

Vendors experience the same issues as users, on a larger scale

Examples abound of how difficult it is for ICT vendors to drag themselves into the cloud computing era.

For example, in August 2012, Adobe had to reduce its revenue expectations from $1.13bn to $1.08bn as a result of its struggle to move from on-premise software to cloud services. Its cloud services are a resounding success, but they are not successful enough to enable the company to avoid a dip in revenue this year and it is still working at transitioning its sales force to a cloud computing-centric world. This makes Wall Street nervous, and it will remain so for a few more years.

In parallel, cloud computing is increasingly woven into every aspect of ICT vendors’ overall strategy. It is therefore little wonder that ICT vendors are much more likely than enterprises to talk about cloud computing in “business-level transformation” terms rather than in terms of “IT cloud computing enablement”. They should also share the ups and downs of their cloud computing-centric “business-level transformation” experiences with their customers much more than they currently do.

The public sector is increasingly focusing on its economy manager role

At first, government clouds, also known as G-clouds or government cloud service aggregation portals, attracted most of the attention. They don’t any more, mainly because they are taking much longer than anticipated to emerge, but they will do so, slowly, over the next five years.

As a regulator, the public sector is increasingly targeting cloud computing, which concerns the cloud service provider industry. Ovum shares this concern: the industry will have to make extra efforts in 2013 to keep overzealous legislators in check. This zeal, however, will be tempered by the third, and increasingly important, role of governments, that of economy manager. As they continue to face economic difficulties, an increasingly large number of countries have ambitions to use cloud computing to boost the local economy, with a special focus on SMEs. In October 2012, for example, the EU published a report on the subject that among many other things asserts that the EU hopes to create 3.8 million jobs by 2020 via investments in cloud computing.

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