SaaS adoption ploughs on while IaaS and PaaS reach tipping point, research shows

Software as a service (SaaS) adoption has more than quintupled since 2011 with the front office leading the way, research from North Bridge Venture Partners has shown.

The data, which polled 1358 respondents, found that SaaS was becoming increasingly important as a CIO priority, behind security software and business intelligence, hitting 74% adoption this year. IaaS and PaaS, in comparison, lag behind on 56% and 41% adoption respectively.

The report revealed fairly solid figures for cloud adoption and innovation. Nearly half (49%) of respondents claimed companies use cloud computing for revenue generation or product development activities, while a similar number (45%) want to or already run their company in the cloud.

The transition phase is also rapidly improving, according to the research. Aside from manufacturing, two thirds of respondents across all business apps will move some or most of their processing to the cloud in the next two years. This comes as an interesting contrast to Coca-Cola Bottling Company Consolidated, whose CIO, Onyeka Nchege, noting at Cloud World Forum last week that the company had only tepidly moved “non-critical” apps into the cloud, such as HR and time-keeping.

“What comes across to me loud and clear from this survey is that even more businesses are no longer thinking ‘why cloud?’ but will focus the next 12-24 months figuring out ‘how do I execute a long-term cloud strategy?’”, said Mike Schutz, general manager, cloud platform marketing at Microsoft.

While the front office suite is most likely to move into the cloud – sales and marketing (52%), customer service (44%) and business analytics (44%) were the most popular use cases – the back end, not surprisingly, is struggling. 19% of transaction processing and 17% of data centre consolidation apps are defiantly not moving over, according to the report.

The report discusses the ‘second front’ of cloud, and examines two key acronyms representative of this change: from ABC (amazing because cloud) to IWC (impossible without cloud). According to North Bridge, while the first front of cloud computing was transition, the second is transformation – and it continues to accelerate.

With over 11,000 restful APIs today, cloud services are being developed which deliver rich functionality accessible as a service, according to venture capitalist Michael Skok the ‘everything as a service’ trend will continue apace with companies looking to ‘outservices’ – outsourcing to cloud services – with everything in their portfolio aside from core competency.

“The second cloud front will be an order of magnitude bigger as these cloud services are combined in previously unimagined ways to deliver entirely new applications and services,” wrote Skok, citing Uber as an example of this disruptive technology.

“Uber...uses geolocation to find both users and the nearest cars, analytics to price on demand, communication to broker and connect and finally payment services to close the transaction,” he added.

“This and other applications like it are only possible in the cloud.”

With four years of data to work with, this report is one of the better ones in sizing up actual cloud adoption. Compare and contrast with 2012’s findings, where CloudTech reported the top line finding that “more and more companies are starting to get their heads around cloud as a concept”.

Like it or not, it’s gone a lot further than that now.

Take a look at the full findings here.

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