Public Cloud Computing and Managed Hosting Services

The promise of cloud computing and application hosting benefits are already delivering practical solutions to very real business problems, according to the latest market study by In-Stat. In fact, many small businesses are using managed cloud services as their primary method to solve a variety of IT requirements.

"Web hosting and data storage are the most obvious IT needs that can be addressed by public cloud services" says Greg Potter, Research Analyst at In-Stat.

"With the advent of Software as a Service (SaaS) offerings many businesses are realizing that much of their IT needs can be fulfilled without the need for expensive networking equipment and high-end computers."

Moreover, many small businesses are now re-visiting the use of thin clients for most of their employees, as the need for increased computer processing power is rendered moot by the cloud.

SMB IT Applications Transition to the Cloud

For the SOHO and small business market, there is considerable opportunity for a variety of cloud service providers. According to In-Stat’s latest market assessment, small business spending on public cloud services in 2010 was roughly $3 billion.

As a direct result of this growing demand, In-Stat forecast that public cloud computing revenues are set to increase well over 100 percent from 2010 to 2014.

This significant increase is changing the IT infrastructure paradigm in small office and home office (1-4 employees) and small business (5-99 employees) environments – it’s also transforming business technology application scenarios.

In-Stat’s research shows that SOHO and small businesses will comprise roughly 65 percent of the public cloud computing market in 2014.

Hybrid-Cloud Appeals to the Larger Employers

Mid-sized (100-999 employees) and enterprise (1000 and more employees) businesses have other issues to consider -- primarily security and the cost of transition, when evaluating their choices for cloud computing solutions.

For these companies the choice between public and private clouds will dominate their decision-making processes.

In-Stat believes that private clouds give businesses that are securing sensitive data an alternative to the public cloud, as they can realize cost advantages and improved utilization of IT equipment over a traditional physical infrastructure deployment.

A great number of enterprises are running virtualization software on their current infrastructure, and they’re already recognizing the cost savings yielded by utilizing cloud infrastructure.

For those companies not already utilizing a private cloud platform, In-Stat believes that the public cloud offers an appealing demand-based payment model and scalable infrastructure solution.

In the end, some large companies will very likely choose the hybrid cloud approach -- moving their mission-critical information and applications to a private cloud, and then partnering with a public cloud infrastructure service provider for their other remaining application needs.

Widespread Private and Public Cloud Adoption

Cisco released the final installment of the Cisco Connected World Report, an international study about the behavioral trends of workers in accessing information anywhere, with any device, and the ability of information technology (IT) professionals to address their needs.

The latest results focus on data center, virtualization, and cloud computing trends, and evolving IT roles, in the context of increasingly mobile and distributed workforces.

The study found that global IT professionals are creating new job opportunities by increasing collaboration among teams in the data center, and adopting new technologies such as virtualization and cloud computing. But they’re also struggling to maintain security and data governance as employees demand more offsite access to networks and information.

Comparing Cloud Adoption Rates by Country
For example, across the 13 countries in the global study, 52 percent of the IT professionals stated they use or plan to use cloud computing, while much higher cloud adoption rates are predicted in Brazil (70 percent), China (69 percent) and India (76 percent).

Across the world, respondents rated the following as their top data center priorities for the next three years: improve agility and speed in deploying business applications (33 percent), better manage resource capacity to align demand and capacity (31 percent), increase data center resilience (19 percent), and reduce power and cooling costs (17 percent).

This report adds to the initial survey results released in October, which revealed that workers want flexible access to corporate information from any mobile device, anywhere, anytime, and to the results released in November -- which revealed disconnects in worker expectations around information access, IT policies and employee awareness of policies.

The latest survey results examine how IT managers are evolving their data centers and taking advantage of new technologies, while working to accommodate trends in the workplace like social media, device proliferation, video and an increasingly mobile workforce.

Summary of Cloud Computing Trends

• Cloud use today: Across the study's 13 countries, only an average of 18 percent of respondents are using cloud computing today, while an additional 34 percent plan to use the cloud.
• Top cloud users today: Brazil (27 percent), Germany (27 percent), India (26 percent), U.S. (23 percent) and Mexico (22 percent) top the list of countries that are already taking advantage of cloud computing, exceeding the average (18 percent) across all countries.
• Future cloud use: A large majority (88 percent) of IT respondents predict that they will be storing some percentage of their company's data and applications in private or public clouds within the next three years.
• Private clouds: One in three IT professionals said more than half of their company's data and applications will be in private clouds within the next three years. Private cloud adoption was predicted to be higher in Mexico (71 percent), Brazil (53 percent) and the U.S. (46 percent.)
• Timing for public clouds: Of those respondents that will use public clouds, one of every three (34 percent) plan to deploy within one year, and 44 percent predicted their companies would use public clouds within the next two years; 21 percent are expected to do so within two to three years.