From a geographic standpoint … the uptake is actually greater in parts of Asia and Europe, excluding China, than it is in the U.S. and the U.K. We just looked at the adoption rates and the U.S. and the U.K. were sixth and seventh, respectively, country by country. That is reflective also in our pipeline for cloud services.
From a scope of service point of view I would say there is a lot of focus on the infrastructure space, at least in terms of total dollar value of potential contracts … A lot of energy is being spent by our clients on figuring out what it means to manage -- and mostly at the infrastructure level but increasingly they're asking about applications - in this new world that's introduced by the integration of cloud services in their legacy environments. That's probably half of what we're seeing in terms of demand. That is followed by SaaS implementations.
We do an awful lot of SaaS implementation work. I think what we're beginning to see is a great amount of interest in this whole application re-platforming and revitalization/optimization area. Clients are coming to us and saying, 'That's great, but I could build new applications on a cloud platform but I still get this giant legacy lump in the background, what do I do with that?'
We actually have an assessment tool to help them work with clients and learn how they can re-architect their application portfolio to take advantage of the cloud. That will probably grow to be a larger part going forward. The infrastructure stuff, I don't think it will run its course, but I think that as people begin to understand that the real value is in optimizing the application portfolio we're going to see more demand for that. We're beginning to see it now. It's just right now today probably not the largest portion of what we do.
What are some of the roadblocks you've been seeing keeping clients from adopting the cloud? Early on it was security it was data control. What are some of the reasons clients are putting behind not deploying the cloud?
[Security and data control] are still the big ones. It's hard to say that the performance isn't there. These things are highly available, high performance environments, so that was an early sort of issue that's gone away by the waters. People still - when they think about it, and I think this is probably the largest conceptual roadblock - say 'Yeah, we want the cloud but we want it to work exactly like our old stuff works.' The fact is it doesn't, and it doesn't for a reason.
Having said all that, I think the economics, the flexibility, the speed of implementation and all of those things are going to win the day and in time these issues will be cured through commercial measures, through technical measures and through changes in attitudes, but they still remain today as extensive roadblocks.
If security and data privacy are the biggest roadblocks, what are some of the key things you see driving clients to cloud computing offerings?
It's cost. Cost. Cost. And cost.
I don't think any of our colleagues in the enterprise IT world have been relieved of the responsibility to continue to drive down costs in the enterprise. It's a permanent condition. While we talk about agility and so on the first question is: Can I do something I'm doing today for less? Or can I do something in the future that I'm not doing today for less than I think it would cost me under conventional means? That's confirmed by surveys and confirmed by the work we're doing with our clients.
Following closely after that is the growing realization that you can do things faster. It's not only cheaper, but you can do them faster and you can do some things you couldn't do before. If you're in the pharma industry and you want to do some analytics on clinical trials and you want to go to Amazon and spin up 1,000 concurrent servers and use it to process a data set in 15 minutes -- it might have taken you a month in the old world -- at a cost that is a fraction of what it would cost to outfit and provision that same function in the old world then wow that's good. I think people are seeing that the software and the applications themselves are pretty good. They're next-generation, they're more easily integrated, they're pretty functionally rich and they're highly configurable.
Cost is compelling, but increasingly, as people kind of get their heads around what the opportunities for the use of these technologies and business models are -- and in cost there's the change from capital to operating expenses -- there's a continuing wave of demand for it.
Vendors And The Channel Accenture is partnered with most of the main players in the cloud. Are there any vendors that really 'get it' and get how to play cloud computing in the channel with solution providers? What is it that makes a difference in a vendor relationship?
Understand where a lot of these companies came from and what their channel strategies have been to date. I would argue that the cloud is just another thing. It's a different thing. They have to behave somewhat differently because they're moving to becoming service providers.
Salesforce is at the applications level; Microsoft is all the way up and down the stack and is even into cloud hosting now; IBM is up and down the stack; HP is somewhat lower in the stack; with Cisco UCS/VMware the control point is really at the hypervisor and potentially moving up into a platform. Each potential partner has a different view of what's important in the enterprise. For us, that will inform how we work with them as channel partners and where we can add the most value. When they understand that we can work better together.
Does Accenture break out its revenue for cloud-related services or cloud offerings? Over the next year how much of Accenture's revenue will come from the cloud?
No, not publicly. I can tell you we've commissioned work to look at the market itself and where the growth is likely to come. What sorts of services and at what pace and in what geographies and so on. The growth will be greater than the traditional IT services market, significantly greater in some instances. That was done from a top down meets bottom up estimate of IT spending, the kinds of things that companies spend on, some public information from companies that are already in the cloud space and their projected growth rates.
So we're looking at growth in general in the cloud services that are offered probably 25 percent to 30 percent for the foreseeable future. That information is confirmed by self-reported information from our survey participants, 80 percent of whom are planning on increasing their spending on cloud-based services going forward and one-third of those looking to double spending on cloud based services in the next 24 to 36 months. While we don't divulge Accenture specific statistics we believe it's a significant growth area and it will continue to outpace the growth of the general technology market.
What's the next big services opportunity as it pertains to the cloud?