Canadian Underwriter

90% of polled enterprises in U.S. to increase, maintain annual spend on cloud computing in 2016

February 16, 2016   by Canadian Underwriter

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A new survey out of the United States identifies a cloud computing spending pattern – 90% of respondents say their companies plan to increase or maintain related budgets – that signals a growth opportunity for providers.

Cloud service providers are advised to target opportunity in enterprise market, Washington, D.C.-based B2B research firm Clutch suggested in releasing its 2016 Enterprise Cloud Computing Survey last week.

Plan is to maintain, increase annual spend on cloud computing

The poll of 300 respondents with decision-making authority or influence in the IT department – from companies with 100-plus employees that use a full-service cloud computing platform – found most respondents’ organizations plan to increase their respective cloud computing budget by as much as 50% in 2016. Conducted in December, the research also measured cloud computing services used and cloud infrastructure implementation processes practiced.

Almost 30% of those taking part in the survey say their enterprises will maintain current spending, and just 6% report their enterprises will reduce spending, notes a statement from Clutch. “This spending pattern indicates a growth opportunity for cloud service providers in the enterprise market,” it adds.

“Analysts confirm that the value enterprises derive from cloud infrastructure directly influences spending patterns,” Clutch reports. “The cloud is building ROI [return on investment] faster and with better business accuracy, so companies are willing to reinvest in it every year,” Jason Reichl, CEO of Go Nimbly, says in the statement.

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Anticipated company annual spend on cloud computing

Randy Bias, vice president of technology at EMC, suggests in the survey report that there is no value in transplanting an existing business model in the cloud. “The cloud forces companies to find new ways to do business. As you disrupt yourself, own markets and move faster to surpass competition, you will invest in new revenue-generating opportunities,” Bias says.

In all, the survey shows almost half – 47% – of respondents identified increased efficiency as the main benefit of cloud computing. Security (45%) and data storage (41%) followed to fill out the overall top three cloud-computing benefits, states the report.

The highest priority cited for enterprise cloud usage is file storage (70%), followed by back-up and disaster recovery (62%), application deployment (51%), and application development and testing (46%).

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Top three tasks completed using cloud computing

Survey findings suggest cloud service providers can appeal to enterprises by leveraging features that correspond to the identified prioritized tasks. “The ease of adopting the cloud for file storage needs enables rapid adoption in this space as opposed to other use cases for the cloud,” Duane Tharp, vice president of technical sales and services at Cloud-Elements, notes in the statement.

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Top three benefits of using cloud computing

In addition, 83% of respondents report using one of the big four cloud service providers the most, and 53% of those polled report hiring an external professional consulting firm to implement cloud infrastructure.

The report notes that working with a consulting firm to implement cloud infrastructure has both pros and cons, pointing out that the main advantage arises from the ability to access a consulting firm’s extensive knowledge base.

That said, “working with a consultant becomes disadvantageous if a transfer of knowledge does not occur from the experienced consulting firm to the internal staff of the enterprise company,” the report states.

“For long-term project success, it’s critical that the consulting firm you work with is dedicated to empowering and training your team,” argues author and speaker David Linthicum. “If you don’t invest in building an internal knowledge base, all the domain knowledge walks out the door when the engagement is complete.”