Analyzing Factors that are Driving Cloud Adoption

Feb 23,2021 by Manoj Yadav

It would not be an exaggeration to state that most business enterprises are either planning or have already moved to cloud. This is applicable to businesses of all sizes and from all categories across the globe. But what are driving factors of cloud computing towards this widespread cloud adoption?

Let’s check out.

Growth of cloud adoption

The projected growth of 18% percent CAGR between 2019 and 2026 for expenditure involved in adoption of cloud platforms as well as infrastructure by globenewswire is a sound testimony to the extent of cloud adoption by organizations.

Accelerated growth of cloud can be measured by the number of workloads that are increasingly being shifted to cloud as well as enhancement of total  IT budget that  is earmarked for cloud computing.

Cloud adoption – Present Scenario

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 71 percent of enterprises, are already spending some part of IT budget towards IT services. There are another 61 percent of organizations that have migrated their workloads to the cloud in 2020.

Major benefits of cloud adoption

Cloud services have been helping organizations improve productivity; improve market response time, and lower cost that also account for the key business drivers for cloud adoption.  This was the opinion of 460 decision makers in senior positions of finance functions across diverse enterprises.

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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. Platform as a service (PaaS) will grow by 21% in 2021. And in the study conducted by Vanson Bourne, the 460 finance executives that participated, despite their non-IT backgrounds, 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. Quantifiable improvements in organizational efficiency have been reported to be linked with cloud adoption.

Cloud computing is primarily available as SaaS (Software as a Service) IaaS (Infrastructure as a Service) and PaaS (Platform as a Service). Following are some driving factors towards cloud computing in either of the ways:

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 –

Flexibility stands as one of the pivotal driving factors of cloud computing adoption. Unlike traditional systems, cloud solutions offer remarkable flexibility in payment methods. Users pay solely for the utilized infrastructure and server capabilities. Additional capacity can be readily provisioned or decommissioned, aligning with demand fluctuations—eliminating instances of idle, unutilized capacity.

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4) Remarkable availability –

The cloud ensures incessant availability of both data and applications, regardless of users’ geographical location.

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 they 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 –

Cloud service providers considerably mitigate organizations’ expenditure on purchasing hardware components or equipment by taking care of these factors. The remotely positioned entire platform turns out to be more affordable than onsite datacenters.

8) Instantaneous reduction of expenditure –

Organizations are able to face economic slowdown or recession, thanks to flexibility of cost structure. Cloud computing leverages pay-as-you-use model with no contractual obligations, so clients are not bound to pay any fee except for the resources deployed.

9) Optimization of capacity –

Users of cloud services are empowered with the 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 greatly accommodates organizations, enabling them to adapt to new business models required for mergers or acquisitions. Traditional models make migration highly costly and excruciatingly slow.

11) Eco-friendly –

Cloud computing is contributing to the global environment by reducing the number of data centers and improving work efficiency. As part of the global green initiative, cloud providers are mostly green hosts and make use of renewable energy sources as much as the energy-requirements allow.

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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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