Cloud computing adoption rising rapidly 21 October, 2009 By Mark Cox

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The most remarkable element in the general data is that the number of respondents who say they are beginning to embrace cloud computing jumped more than 320 percent since the January 2009 survey. And while some of the shock value of that number can be explained by the miracle of the exponential curve, it translates into an adoption rate of about 10 percent. Moreover, the number that had no plans to adopt went down from 54 to 37 percent.

"I was shocked to see the uptake had got that fast," said Larry Beck, Senior Director of Cloud Strategy at Avanade.

Beck said that a key reason for the accelerated adoption was that many of the concerns in the January survey had been addressed, at least in part. While most organizations then saw a cloud as a viable option, not just hype, there was a general reluctance to take action because of fears of security and loss of control. The fears about security are on the decline. The other main concerns in that survey, the lack of a unified way of talking about it, and the need to earn client trust in the same way payroll services companies have.

Not surprisingly, the study also found that while companies are moving toward cloud computing, there is little support for cloud-only models. Just 5 percent of companies using the cloud now utilize only cloud computing. Rather, the majority of companies are using a combination of cloud and internally-owned systems, or a hybrid approach.

"Using a hybrid model mitigates risks and fears," Beck said. Given that the companies surveyed were enterprises, not smaller companies, even the 5 percent number seemed somewhat high, Beck said, and likely reflects relatively newer companies or ones undergoing a major transformation like being merged or acquired.

Security is still the number one barrier to adoption, but it fell to 40 percent from 53 percent in January.

"It shows headway is being made getting customers comfortable with the model," Beck said.

Another sign of this was the increased concern about the steep learning curve for current IT staff as a barrier to adoption -- a sign that concerns were shifting to more practical issues.

More respondents also saw the cloud as a strategic investment rather than as a cost saving measure, by a margin of 57-43 percent.

"The strategic bet includes things like the ability to be current on software, and avoiding upgrade pains," Beck said.

The survey also asked questions about Software-as-a-Service (SaaS). More than half of respondents report that they are currently using SaaS applications.

"The SaaS option is clearly past hype," Beck said. "Over half use SaaS globally and in the US, that number is 68 percent." Beck also noted that over a third of respondents are using three or more SaaS offerings, and 62 percent of adopters plan to increase usage in the next 12 months.

Beck thinks that to keep cloud adoption on its' current path the industry needs to do things.

"First, it needs to make adoption easier," he said. "Migrations on and off the cloud are very manual, and we need to give customers better tools for doing that. Contracting policies right now are also difficult because of the newness."

The second requirement is the need to live up to expectations, with respect to security, reliability and business value.

"The cloud needs to deliver business value, not just cost savings."