Businesses Want Cloud To Grow Business, Not Just Cut Costs: Study

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As end users continue to adopt cloud-based technology over the next two years, they will be doing so to grow their business, not to cut costs, according to a new study by Microsoft and 451 Research

"To do more with less is yesterday news based on our findings. In the next two years, more than 50 percent of customers will [use cloud] to focus on growing their business. Only 26 percent see the benefit of cloud as a cost-saving opportunity," said Marco Limena, vice president of Microsoft's hosting and cloud service providers business. "Cloud is giving them the opportunity to grow business and realign the organization to new company strategies. The benefits of cloud are introducing new products and getting them to market faster and supporting them."

The survey was conducted among small, midsize and large businesses across a wide swath of industries, Limena said.


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"That is a dramatic shift into how they are leveraging cloud for business growth. They are looking to innovate to transform their business. That becomes more important in the next two years," Limena said.

Meanwhile, the total worldwide hosting and cloud market size will grow from 6.9 percent of all IT in 2010 to 20.6 percent by 2014, according to the study. Platform-as-a-service is growing at a 70-percent compounded annual growth rate over that period and Infrastructure-as-a-Service has a 69 percent CAGR, according to the study. Meanwhile, the more mature dedicated hosting and shared hosting models are growing at 8 percent and 9 percent CAGR, respectively.

Accordingly, 68 percent of customers said they plan to adopt a hybrid cloud model in the next two years, up from 49 percent today, according to the study.

"The key message is that the next phase is the hybrid model, with each customer defining their own strategy and own consumption," Limena said.

Drilling down, Microsoft found that the growth of the hybrid model comes at the expense of both the public-only and private-only models today, Limena said.

"The math is basically going 10 points both directions. People don't want to be locked into those configurations because the workload might need to move in a different direction with new requirements. They like the interoperability of public and private cloud," Limena said.

Today, enterprise applications, email and database applications are the three largest SaaS applications by use, according to the study, but several other application areas will drive more SaaS growth in the next two years including business support applications, analytics/business intelligence/data mining, e-commerce, unified communications and media streaming, according to the study.

These applications will be "cloud native" for many customers with implications for underlying infrastructure and data centers, according to the study.

NEXT: Cloud Hosting And Technology: Killing Two Birds With One Stone

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