It is Raining ‘Cloud’
According to Oxford Research, 78% of enterprises believe that cloud services driven, on-demand consumption model enabled via a Cloud Marketplace will be a critical factor for gaining competitive advantage in the next three years.
This data clearly points towards a growing demand for cloud marketplaces. In recent years, more and more businesses are transitioning to cloud marketplaces, after realizing that this Web-based computing service can provide the power, low costs, functionality, flexibility, and mobility that has long eluded traditional enterprise computing.
Amidst the storm of ongoing political and economic challenges, leading CIOs and CTOs around the globe are seriously considering cloud computing as their go-to-business strategy. Again, cuts in IT budgets, pressures for IT to be more agile and the need of overall cost reductions are directing businesses towards cloud computing, not only as a savior but more as a game changer for grabbing more business opportunities.
Research has shown that analytics and data storage will lead cloud adoption applications in 2017. According to the RightScale State of the Cloud Survey (2016), 75 percent of enterprises with greater than 1,000 employees have at least one app or platform running in the cloud today, leading all categories of adoption measured in the survey.
Furthermore, the study found that 90 percent of all organizations today either have apps running in the cloud or are planning to use cloud apps in 2017.
The pay-as-you-go Amazon Web Service (AWS) model is a primary driver of this development. Use of AWS was at an all-time high in 2016, with 57 percent of companies running it in the cloud. This is largely in part because AWS makes it easy and affordable for organizations to move to the cloud. AWS offers users the ability to search for, and buy SaaS directly from AWS Marketplace Vendors, without monthly fees or subscriptions costs. Instead, the AWS pay-as-you-go model only charges users for the services that they consume.
Experts also agree that, the 300 percent growth rate, that cloud marketplaces will experience through the year 2022 will be led by cloud applications, cloud platforms and cloud business services. These three areas are most in-demand from enterprises of all types. And while there is impressive demand, cloud marketplaces are still in the very early stages of development. Companies are still learning their clients’ needs and creating solutions to meet through the cloud marketplaces. They are now on the way to realize the real need for marketplaces for a variety of reasons including better choice, cost comparison, quality and capability review, and latency.
While exploring through the benefits of a cloud marketplace, organizations will likely need many different cloud services in upcoming years as more parts of the enterprise realize the usefulness of cloud technology. The most visible value of cloud marketplace as of now, seems to be, its pay-as-you-go service, as in the AWS model explained above, which lets companies pay for only the amount of services they actually use.
Still, cloud computing, like any other new technology, brings with it risks and concerns. Security is always one of the primary concern. No CIO would be perfectly comfortable allowing sensitive data to reside outside the confines of the company’s firewall. However, of late, a strong-held belief in traditional IT security over cloud is faltering as studies suggest that data security is more a matter of location and less of accessibility.
According to Alert Logic’s Fall 2012 State of Cloud Security Report, the variations in threat activity are not as important as where the infrastructure is located. Anything that can be possibly accessed from outside — whether enterprise or cloud — has equal chances of being attacked, because, attacks are opportunistic in nature.
Another concern that may arise, could be regarding the vendor pricing of the cloud computing services. Because, for anyone in general, a subscription pricing models for Web-provided applications and services is relatively simpler than licensed models.
Despite these concerns, we believe that cloud computing is a viable option for most of IT problems. CIOs owe it to all the stakeholders at their companies to perform a realistic assessment of the technology, its virtues and pitfalls, and to understand how it can benefit their companies now and in the future. And the time is ripe: The current economic downturn has put pressure on many corporations, to cut costs and do more with less, and cloud computing’s “on demand” model for applications offers clear financial advantages. Smart and aggressive CIOs will take advantage of cloud computing to lower costs and manage risk now, while getting ready to use it more strategically in the coming upturn.
Of course, cloud marketplaces are still new. But Forrester Research predicts the bright future of cloud marketplaces, with projections for the public cloud market reaching $191 billion by the year 2020. Adding to this promising forecast, Albert Qian, Global Marketing and Communications Manager at Ingram Micro says cloud marketplaces are “the ecosystem of the future”. Partnerships and relationships built by tech companies already in marketplaces will spur innovation, allowing cloud marketplaces to evolve and businesses to grow.
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