Recent Goings-On in the Cloud Services Market

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Sep 25, 2015 5:06:38 PM

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Recent Goings-On in the Cloud Services Market

Cloud computing has already become a less hyped and widely discussed technology thanks to the rapid increases in adoption that took place starting around 2007, as the vast majority of the world's organizations are now using the services for at least one purpose. Virtually every industry has completely overhauled its approaches to IT provisioning and management to set the stage for more modernized operations, and the cloud has been at the center of it all. 

Cloud services can be used to accomplish a variety of feats, ranging from the streamlining of unified communications management to the handling of financial reporting and accounting responsibilities all at a lower price point than legacy IT. In fact, one of the main reasons why cloud computing became so popular so quickly was the transition away from weighty capital expenditures that would have been necessary in legacy IT to operational expenditures with these newer service models. 

For obvious reasons, small-business owners have stood to gain the most from these investments, as they have never had a large budget to fall back on when putting expenditures into server purchases and maintenance. Entrepreneurs are indeed among the quickest to adopt cloud technologies and expand their uses of the tools for these and other reasons, and one could make the argument that these solutions played a major role in the leveling of the playing field between small, medium and large enterprises.

If you would like a quick tutorial that was composed specially for small-business owners, check this six-minute video courtesy of Chris Boyle who describes the basics of cloud computing:

From government to private sectors and beyond, the cloud is acting as a powerful vehicle to leverage in modern technology, and can now be seen in the gadgets of consumers and employees from around the globe. Thanks to the fact that many entities began to use the cloud about five years ago, a growing volume of studies and surveys are starting to show the long-term impacts of comprehensive IT overhauls and managed services deployments. 

Government's big win
You might remember the first federal Chief Information Officer, Vivek Kundra, who formulated and deployed the Cloud First Initiative back in 2009 when the technology was just beginning to gain traction across marketplaces. Now five years in, the plan has come back with strong results, as the Government Accountability Office has released a report on the performances of the 26 agencies that participated in the endeavor since it was first launched. 

According to the GAO report, roughly $3.6 billion have been saved thanks to the consolidation of data centers that took place as the key aspect of the major initiative to reduce spending through the use of cloud computing. Some of the dollars saved were the result of not having to purchase upgrades or completely replace backend hardware, while others were retained simply because of the greater efficiency that comes alongside novel technologies and strategies. 

Interestingly, it took the government a little while to get the ball rolling on cost reductions, and this is to be expected given the fact that agencies could not just throw away their old servers and networks and replace them with brand new cloud assets. Rather, adoption and deployment will often be most seamless and profitable when the entities take a more structured and patient approach, especially when it comes time to expand out the projects and target other areas of operations. 

The cloud computing market remains strong. The cloud computing market remains strong.

The study estimated that $200 million were saved in 2011, $700 million in 2012, $1.3 billion in 2013 and $1.4 billion last year, which is the type of progression that many analysts would want to see in government and the private sector, for that matter. The agencies that performed the best in these cost reductions included the U.S. Department of Labor, the Social Security Administration, the Labor Department and the Department of the Interior. 

Now, while $3.6 billion is nothing to shake a stick at, it is worth noting that this was far below the original target of $7.6 billion, but the researchers at GAO did discover some of the ways in which the federal government can build off of these initial successes to surpass objectives in the future. The agency did note that more advanced and thorough reporting, measurement and analysis will be needed moving forward to ensure that the projects continue moving in the right direction. 

Software spreading to new industries
Software-as-a-Service has long been the most prolific segment of the cloud computing market, and it appears as though the inclusion of newer industries into the mix is driving adoption rates even higher. Businesses and public sector entities are already using SaaS for myriad functions and objectives, including a proverbial universe of management demands such as enterprise resource planning, financial reporting and customer engagement. 

"Leaders need to better understand cloud cost analysis."

International Data Corporation recently explained that while the utilities sector has taken the most time to begin adopting cloud computing technology, the tides are beginning to shift among decision-makers in the industry. According to the research group, once leaders start to better understand the cost analysis and return on investment measurement aspects of use, the technology should spread a bit more quickly given the inherent benefits it yields to these types of companies. 

"Today's technology advancements are being developed in cloud applications first, and not necessarily in on-premise applications," IDC Energy Insights Vice President Jill Feblowitz explained. "At a time when utilities need to evaluate and adopt current and emerging technologies more aggressively, regulators, shareholders, stakeholders, and ratepayers need to take a closer look at the true economic impact of the traditional capex/opex model to determine whether the numbers, in fact, make sense for all parties."

At the end of the day, small-business owners - regardless of which industry they might be competing in - should recognize the value in embracing these technologies a bit more quickly than competitors. From managed infrastructure and platforms to hosted software and other services, the cloud can be a boon to financial and operational performances in the modern era. 

Topics: Cloud Trends