Irvine Louisville San Francisco
2009 C
LOUD
C
OMPUTING
T
RENDS
R
EPORT
T
ABLE OF
C
ONTENTS
The Survey
Page 3
The Participants
Page 4
Executive Summary
Page 5
Familiarity with Hosting
Page 6
Cloud Computing Defined
Page 7
Cloud Computing Drivers
Page 8, 9 and 10
Cloud Computing Obstacles
Pages 11
Pricing & Timing
Pages 12
IT Services in the Cloud
Page 13
Solutions in the Cloud
Page 14
Ways to Pay
Pages 15
Further Analysis
Page 16
T
HE
S
URVEY
Hosting.com proactively engages with clients and prospects to
effectively understand their business goals to build solutions that are both client relevant and applicable. A core component of Hosting.com’s client engagement strategy is the use of surveying tools.
The Cloud Computing Trends Survey was launched on December 17, 2008 and respondents had until January 23, 2009 to respond.
The survey was conducted and hosted electronically. The survey asked approximately 11 questions and took between 6 and 10 minutes to complete.
In sharing the results, Hosting.com will provide general demographic information about respondents and the companies they represent; however, Hosting.com will not reveal the specific identity of any respondent or company.
T
HE
P
ARTICIPANTS
644 Respondents
C-level Executives and Business Decision Makers
Over 40% were CXOs, President, Owner or Vice President
Industries
All major industries represented including Financial Services, Retail, Social Networking, Healthcare, Manufacturing, IT Service Providers, Marketing and Advertising, Non Profits and City Governments.
Number of employees
69% had fewer than 100 employees 11% had greater than 1,000 employees
Annual Revenues
Ranged from less than $1M to over $100B 64% are less than $10M
E
XECUTIVE
S
UMMARY
This Cloud Computing Trends Report introduces new data into the cloud marketplace. This survey
provided insight into the expectations small, medium and large businesses have of cloud computing, their intended uses, reasons for adopting, and expected time-frames for implementing cloud-based solutions. Surprisingly, this e-book reveals that there is little difference between how larger companies and small businesses will utilize Cloud Computing . Specifically:
• The driving factors for adopting cloud services are nearly the same for all company sizes. • Business size plays no role in how quickly cloud technologies will be adopted.
• Executive leadership in small businesses list cloud computing as a priority at the same rate as executives with large companies.
• Small businesses are likely to receive a greater amount of IT Services from a cloud platform. • Increased education on cloud benefits, solutions and design is needed for businesses of all sizes. As cloud providers continue to create cloud-based solutions that provide reduced costs, scalability,
improved service level agreements, increased flexibility and overall performance they must keep in mind a new force in cloud computing that will demand immediate, measurable results – small businesses.. 2009 is slated to be a banner year for cloud computing providers and solutions. Until now, the expected primary source for increased revenues was large companies, specifically for test and development
environments. However, over the past several months decreased revenues and operating budgets have driven small businesses to explore and implement production cloud environments.
F
AMILIARITY WITH
H
OSTING
Which services does your company currently receive from a hosting provider?
Multiple selections were allowed
Online Storage Application Hosting Database Hosting Email Hosting Web Hosting
21%
30%
32%
54%
72%
This intended purpose of this question was to establish the respondents’ familiarity with hosted services and extending IT functions to an external provider. 90% of respondents currently use a
C
LOUD
C
OMPUTING
D
EFINED
When you hear the term “cloud-computing,” what definition first comes to mind?
47% Fundamental change in how technology services are provided
19% A tool, if delivered properly, that can provide instant value to my company
9% A tool that might work for another company
13% Another buzzword – all hype
12% Unsure
Analysis: Two-thirds of the respondents believe Cloud Computing will have a major impact on the IT
industry. Contrastingly, 22% were familiar with the term but did not believe it would provide value to their company.
The chart above illustrates that larger companies view the cloud more positively; primarily, due to their familiarity with cloud computing solutions. Less than 1% of respondents from companies with 250+ employees were unsure how they would define cloud computing. Most service providers, vendors and software manufacturers have adjusted their service offerings for the booming trend toward Cloud Computing - they must keep the 62% of small businesses in mind when developing these solutions.
Answered Either Fundamental Change or Instant Value
R
EDUCED
C
OSTS
D
RIVING
C
ONSUMERS
TO
E
NGAGE
C
LOUD
C
OMPUTING
To the best of your knowledge, please select the three most important factors
that will drive companies to invest in cloud computing.
After selecting the three, please place them in order of importance.
Ranked Number 1 Ranked in Top 3
Cost Savings 34% 65% Uptime/High Availability 17% 46% Performance 12% 43% Consumption-based Pricing 12% 33% Scalability 7% 40% Flexibility 6% 41% Rapid Deployment 5% 24%
Continued…
F
ACTORS
D
RIVING
C
ONSUMERS
T
O
C
LOUD
C
OMPUTING
Company-size did not alter the expectations that our respondents have of
cloud-computing solutions. The three most important factors driving consumers to invest in
Cloud Computing are nearly the same for all businesses. Likewise, the two least important
factors when stacked against the other drivers listed on page 8 were exactly the same.
Continued…
Top 3 In order of ranking 2 Least In order of ranking 250+ Employees 1. Reduced Costs 2. Uptime 3. Scalability 1. Rapid Deployment 2. Consumption-based Pricing 50-249 Employees 1. Reduced Costs 2. Uptime 3. Scalability 1. Consumption-based Pricing 2. Rapid Deployment 1-49 Employees 1. Reduced Costs 2. Uptime 3. Performance 1. Rapid Deployment 2. Consumption-based PricingM
OST
& L
EAST
I
MPORTANT
F
ACTORS
D
RIVING
C
ONSUMERS
Company-size did not alter the expectations that our respondents have of
cloud-computing solutions. The three most important factors driving consumers to invest in
Cloud Computing are nearly the same for all businesses. Likewise, the two least important
factors when stacked against the other drivers listed on page 8 were exactly the same.
Continued…
250+ Employees 50-249 Employees 1-49 EmployeesTop 3 1. Reduced Costs
2. Uptime 3. Scalability 1. Reduced Costs 2. Uptime 3. Scalability 1. Reduced Costs 2. Uptime 3. Performance
2 Least 1. Rapid Deployment
2. Consumption Pricing
1. Consumption Pricing 2. Rapid Deployment
1. Rapid Deployment 2. Consumption Pricing
C
LOUD
C
OMPUTING
O
BSTACLES
To your best knowledge, what are the top three obstacles Cloud Computing
providers must overcome?
(Multiple selections were allowed)64% 58%
40% 39%
30% 27%
21% 21%
Analysis: Security also top concern in other Cloud Computing Studies including recent surveys by Third
E
NTERPRISE
-S
PECIFIC
O
BSTACLES
Large companies expect higher levels of Security and Control.
Companies 250+ employees - 75% selected Security (selected by 58% of all others)
45% selected Control (selected by 38% of all others)
Due to their size, larger companies are more frequently the targets of malicious data attacks and have a greater need to protect their assets due to compliancy and regulatory requirements. Types of Cloud Computing solutions Enterprises will pursue include: R&D projects, quick promotions, online
collaboration, partner integration, social networking , new business ventures.
Analysis: Security for companies of all sizes will become less of a concern
due to advances in virtualized technologies that have produced increased security options to meet any organizations business demands. Recent advances, especially those made by VMWare have made shared virtual cloud environments as secure as single-tennant environments.
E
XECUTIVE
O
RDERS
Has Cloud Computing been identified as a priority by your organization’s executive leadership?
Analysis: As companies continue to recognize the monetary and technology benefits of Cloud
Computing, the number of executives identifying Cloud Computing as a priority will increase. Factors such as the adoption of Software-as-a-Service (SaaS) models, Virtualization and access to broadband and wireless networks provide mobile workforces with new approaches for delivering and receiving business applications. Again, there is no difference between small and larger companies.
ALL RESPONDENTS:
24% - YES 61% - NO 15% - UNSURE
% Answering Yes 250+ Employees 25% 50-249 Employees 23% 1-49 Employees 24%TIMING
How quickly do you think Cloud Computing and its benefits will evolve to have an impact
on your company?
Next 12 Months Unsure
250+ Employees 33% 27%
50-249 Employees 31% 25%
1-49 Employees 34% 40%
33% - NEXT 12 MONTHS 17% - NEXT 24 MONTHS 36% - UNSURE 5%-NEVER
Analysis: Significant market opportunity exists for cloud providers within small businesses. 34% of
respondents believe Cloud Computing will evolve to impact their business in the next 12 months. 40% were unsure which providers can use as an opportunity to effectively engage, educate and build
Over the next 12 months, what percentage of your IT services do you estimate will be
delivered from a cloud platform?
IT S
ERVICES IN THE
C
LOUD
Analysis: Compared to a September 2008 study by InformationWeek, the likelihood of organizations to
deliver their IT services on a Cloud platform has doubled (13% responded that greater than 25% of their IT services would be in the Cloud) indicating that Cloud Computing is trending upward. An
appealing aspect of Cloud Computing is little knowledge is required to set up, configure and maintain the technology and the supporting infrastructure.
12% 39% 23% 12% 8% 6% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% No Intention of Using 1% - 9% 10% - 25% 26% - 50% 51% - 75%
More Than 75% More Than 80%
With 50% + 1-49
W
EB
A
PPLICATIONS
B
EST
-S
UITED
FOR
C
LOUD
C
OMPUTING
To your best knowledge, what two solutions are best-suited for a Cloud Computing
environment?
Hosting Web Applications was the most popular solution for all companies. The two most popular based on company size were:
2 Most Popular
250+ Employees 1. Web Applications 2. Application Server
50-249 Employees 1. Web Applications 2. Application Server
1-49 Employees 1. Web Applications 2. Database Server
70% Web Applications
7% File/Print Server
41% Database Server
7% Traditional IT
37% Application Server
7% Other (Popular write-ins: Media, File, Raw
20% Testing/Development storage, Email)
W
AYS TO
P
AY
Select the manner in which you would most prefer to pay for Cloud Computing services?
Analysis: There was a large difference between how small companies wanted to pay for cloud
computing services when compared with larger companies. 32% of companies with 250+ employees preferred annual contracts compared to 13% of companies with 1-49 employees. For unpredictable businesses, paying for services used is alluring; until, the first bill with multiple overages and
unexpected costs is received. Unsure responses were evenly distributed between all company sizes.
Month-to-Month, No contracts, Charged on
Usage
32%
Month-to-Month, No Contracts, Base Fee
Plus Resource Bursting
16%
Annual Contract, Based on Resource Needs and Bursting,
18%
Unsure
E
DUCATION
N
EEDED AND
W
ANTED
The survey data convincingly illustrates the need for additional education around cloud
computing, its uses and benefits. Examples demonstrating this need include:
• 25% Define Cloud Computing as a Buzzword or Are Unfamiliar with the Term • 36% Are Unsure When Cloud Computing Will Impact Their Business
• 12% Have No Intention of Using Cloud Computing
• 39% Foresee 1-9% of Their IT Services Being in the Cloud in 2009
Analysis: Across all industries and all company sizes there is a significant number of individuals
interested in Cloud Computing that have not been presented with compelling or relevant information regarding Cloud Computing. The willingness of those that are familiar with Cloud Computing to adopt it combined with the large number of companies that are still seeking information and have not
formed a conclusive opinion signals a strong market opportunity. Innovative providers that develop client-driven solutions will continue to shape the Cloud Computing landscape.
