Analyzing Factors that are Driving Cloud Adoption

Feb 23,2021 by Manoj Yadav
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It would be an exaggeration to state that every business enterprise is either planning or has already moved to cloud. This is applicable to businesses of all sizes and from all categories across the globe.

Growth of cloud adoption

The projected growth of 30 percent CAGR between 2013 and 2018 for expenditure involved in adoption of cloud platforms as well as infrastructure by Goldman Sachs is a sound testimony to the extent of cloud adoption by organizations.

The phenomenal growth of cloud adoption is so intense that it has forced Forrester to amend the previously projected rate of growth by additional 20 percent due to sudden spurt in overall public cloud market. We need to appreciate two significant factors that are driving all models of cloud services including SaaS (Software as a Service) IaaS (Infrastructure as a Service) and PaaS (Platform as a Service) on the fast growth track.

Accelerated growth of cloud is associated with growing number of workloads that are shifted to cloud as well as enhancement of total  IT budget that  is earmarked for cloud computing.

Cloud adoption present scenario  [driving factors towards cloud]

We need to look at some of the interesting results of a study conducted by Cloud Security Alliance in order to understand the overall attitude of enterprises towards cloud computing. The study revealed that one third of all organizations that were surveyed are serious about adopting cloud services lock stock and barrel.

As many as 86 percent of enterprises, are already spending some part of IT budget towards IT services. There are another 79 percent of organizations that are consistently being asked by end users to go for wide assortment of cloud applications. The list of cloud applications requested  by end users is topped by content sharing followed by social media, collaboration, file sharing, and communication to name a few.

Major benefits of cloud adoption    [Driving factors towards cloud]

In addition to customer requests, there is a plethora of factors that are contributing to increasing rate of cloud adoption.  Cloud services have been helping organizations improve productivity; improve market response time, and lower cost.  This was the opinion of 460 decision makers in senior positions of finance functions across diverse enterprises.

The study conducted by reputed market research company Vanson Bourne and titled as ‘The Business Impact of Cloud’ listed 11 factors that can be termed as drivers of cloud adoption in addition to specific improvements that are mentioned above. In spite of the non-IT backgrounds of these 460 finance executives, they have been actively engaged in discussing cloud adoption strategies in their respective organizations.

The following figures of growth percentage speak volumes about role of cloud services in overall improvement in various business aspects of companies. The average improvement in terms of time to market was 20.66 percent and process efficiency improved by 18.80 percent. The important impact of cloud services was reduction of IT expenditure by 15.07 percent leading to overall organizational growth of 19.63 percent.

Significant factors that influence cloud adoption   [Driving factors towards cloud]

Quantifiable improvements in organizational efficiency are strongly linked with cloud adoption. Following are eleven advantages that can be attributed to cloud computing according to the Vanson Bourne Report:

1.   Latest Software – 

Thanks to cloud based SaaS, Customers can lay their hands on the fresh software no sooner than it is ready for release. One can instantly transfer new functionalities existing software and features by way of updates.

2.  Minimize IT infrastructure – 

The most visible change of cloud is reduction of existing IT infrastructure without any impact on capabilities. Many organizations have been able to entirely eliminate the need for onsite infrastructure by reducing staff expenditure and maintenance costs of physical infrastructure.

3.   Flexibility of costs – 

In sharp contrast to the traditional systems, cloud solutions are extremely flexible as far as payment methods are concerned. Consumers of cloud resources pay only for the amount utilized in terms of infrastructure and server capabilities. Additional capacities can always be provisioned or decommissioned in response to demand fluctuations. Unlike traditional methods, there is no instance of unutilized capacity lying idle.

4.  Remarkable availability – 

Irrespective of geographical location of users, cloud ensures that data as well as application are incessantly made available.

5.  Enhanced mobility – 

Cloud based applications facilitate employees to work from anywhere with help of internet enabled smart devices. Employees can even work while on the go.

6.  Enhanced collaboration – 

Collaboration is hallmark of cloud applications since these enable dispersed workgroups to come together on cloud platforms via shared usage and share information as well as collectively work on the data in real time. This facilitates the acceleration of product development and minimization of time required for marketing by improving customer service.

7.  Cost-effectiveness – 

Organizations can considerably mitigate expenditure for purchasing hardware components or equipment since these factors are taken care of by cloud service providers.

8.  Instantaneous reduction of expenditure – 

Organizations are able to face economic slowdown or recession, thanks to flexibility of cost structure.

9. Optimization of capacity –

Users of cloud services are empowered with excellent flexibility of capacity that can be easily tuned up or down to enhance optimization. The examples can be seen in cloud hosting, dedicated server hosting, and many other related services.

10. Facilitate M&A –

Cloud computing is extremely accommodative and can help organizations adapt to new business models that are necessitated with mergers or acquisitions. Migration can be highly cost intensive and excruciatingly slow in traditional models.

11. Eco-friendly – 

Cloud computing is contributing to the global environment by reducing the number of data centers and improving work efficiency.

Organizations need to address concerns related to data security and regulatory compliance in order to explore the fascinating advantages of cloud computing.

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