Under the Cloud, a Climate Change for IT

Cloud has had a deep impact on the fundamental ways in which IT services are consumed. Yet we are only on the cusp of the transformation. Cisco estimates that connections among people, processes, data, and things will surge from “only” 10 billion today to 50 billion by 2020. Cloud’s value as a key delivery system will extend to this emerging Internet of Everything (IoE) economy, connecting people, processes, data, and things. And the cloud readiness of each organization will determine its ability to reap value in an era of sweeping change.

But what is the current state of IT cloud consumption? And how do IT decision makers view the future impact of cloud?

Figure 1. Drivers of IT Change.

Source: Cisco/Intel Cloud Study, 2013

In a wide-ranging study, Cisco® Consulting Services (CCS), in partnership with Intel®, sought to pinpoint just how these powerful trends are impacting IT. The “Impact of Cloud on IT Consumption Models” study surveyed 4,226 IT leaders in 18 industries across nine key economies, developed as well as emerging: Brazil, Canada, China, Germany, India, Mexico, Russia, United Kingdom, and the United States. In each country enterprise and midsized companies were represented. The survey was conducted during March and April 2013.

Here are some of the key findings:

In the Eyes of IT Decision Makers, Cloud Is Good. Despite its challenges and disruptions, cloud is creating solutions. And in the eyes of our respondents, this is considered a positive development for their organizations. (Case in point: security may be an inhibitor to cloud, but it is also viewed as a solution to security fears.) Globally, more than four out of five respondents believe that cloud will positively impact their organizations..

Cloud Is Here…and Growing. Cloud — whether public, private, or hybrid — is already here. Today, it occupies a significant share of IT spending, 23 percent, and our respondents see it rising to 27 percent by 2016. Private cloud is the most prevalent cloud deployment method at 45 percent.

Emerging Markets Upbeat About Cloud. Despite the overall positive attitude toward cloud, important distinctions arise between emerging and developed markets. IT leaders in emerging nations are more upbeat about cloud, focusing on its transformational and innovative potential; in developed markets it is mostly seen as a tool for cost-cutting.

High Marks for Cloud Providers. In a competitive marketplace, cloud providers will need to offer end-to-end solutions while orchestrating an ecosystem of partners. Accordingly, high ratings for cloud providers in our survey come with high demands: for security capabilities, custom solutions, and guarantees on service levels.

IT Wants To Feel Safe in the Cloud. No matter which vertical industry or global region was surveyed, security and privacy issues are top of mind and seen as a clear inhibitor to cloud growth. Robust security and data protection capabilities are also seen as the most critical factors for cloud service providers.

One Size Does Not Fit All. In a World of Many Clouds — public, private, and hybrid — companies will need to formulate an approach that enables them to meet the overarching goals for their organization. IT leaders should consider how best to partner with key stakeholders, such as LOBs and third-party providers, with an approach that is tailored for their unique needs.

IT Seen as Front and Center… Despite the rise of LOB influence, our IT respondents — especially those in emerging markets — believe that IT will maintain a centralized and well-funded role, managing cloud solutions with consistent policy and security solutions. (Respondents in Asia Pacific and Latin America are nearly twice as likely to project an increase in the size of their IT organization than were their counterparts in Europe and North America.)

…But LOBs Are Gaining Influence. The influence of LOBs will extend across all IT lifecycle stages and create unprecedented complexity for IT organizations as they grapple with security and technical support. As IT transforms to an “as-a-service” model, the interlocks and relationships between IT and the LOBs will need to change.

The IT-LOB Partnership. Whether centralization and greater resourcing for IT is realistic remains to be seen. Regardless, IT will need to partner with LOBs in complex new ways. In the view of the IT leaders surveyed, IT will evolve to be a broker of services to LOBs, acting as a critical intermediary and orchestrator of internal and external cloud solutions within the business, while also providing technical support and security.

A Wake-up Call for IT. Given the rising influence of LOBs, IT must step up to new challenges: moving rapidly, fostering innovation, enabling new end-user experiences, and positively impacting business outcomes in a measurable way.

These insights represent a clear call to action for IT leaders, cloud providers, and service providers. Combining the requisite skills and solutions in a cloud-driven marketplace will create a recipe for success.

To download the full report, please visit: http://www.cisco.com/web/about/ac79/docs/re/IT-Consumption_PoV/

To navigate the report findings by region, please visit: http://share.cisco.com/brightfuture/

For more information on the Internet of Everything, please visit: http://www.internetofeverything.com

For more information on the Cisco cloud strategy, please visit: http://www.cisco.com/go/cloudstrategy

For more information about Intel in cloud computing, please visit: http://www.intel.com/cloud