Corporate America Agrees: Cloud Is Good For Business

Businesses Understand That The Cloud Adds Value

Almost two-thirds of America's corporate leaders who participated in a recent study believe adoption of cloud computing is good for business.

That's according to The Path to Value in the Cloud survey conducted by Oxford Economics, an international advisory firm, and released by telecom provider Windstream.

Oxford Economics queried 350 executives from across the United States. One-third of the respondents were CEOs, CTOs or COOs; the rest held other executive positions at their companies.

The results shed light on how business leaders view the changing IT landscape and shift to virtual infrastructure -- insights that solution providers can leverage to sell products and services.

The Cloud Is Driving Business Strategy

The Oxford Economics research shows that the cloud has already been accepted as a strategic business play, and that influence in driving strategy will rapidly expand as more organizations realize the potential benefits.

Currently, 36 percent of the 350 respondents believe the cloud is critical to their innovation strategy. But another 17 percent -- 53 percent in all -- believe it will be critical to strategy two years from now.

Just short of three-quarters of the executives expect that in two years the cloud will constitute an important part of their long-range vision for their business as well.

The Cloud Powers Collaboration

The cloud is connecting business systems, employees, partners and vendors across the enterprise by enabling realtime communication and collaboration.

Of the 350 executives surveyed, 63 percent said they believe the cloud is improving collaboration among their business units, and 59 percent believe it is improving collaboration with partners. Eighty-three percent believe it will be improving collaboration within the business in two years.

Those numbers are even higher when you isolate respondents from the largest companies.

Security Still A Concern

More than three-quarters of businesses are still concerned about security when it comes to migration. And just over half are concerned about platform compatibility and privacy. Highest among them, not surprisingly, are those in the health-care industry.

Trailblazers Are Rewarded

It pays to be an early adopter of cloud technology, the survey found.

Those innovative companies are enjoying the cloud's benefits, according to Oxford, with higher profit margins (on average more than 10 percent) and a greater likelihood of profitability over the last two years than their peers.

Trailblazers were more likely than their peers to establish a clearly defined strategy for migrating applications and data to the cloud. More than half of the early adopters surveyed said the cloud was critical for innovation, whereas only 33 percent of companies lagging in adoption responded that way.

Business Expansion

The efficiencies delivered by virtual infrastructure make possible physical expansion by opening new lines of business.

Today, 40 percent of the business leaders surveyed said this is a key goal in adopting the cloud. Two years from now, however, 57 percent of the respondents expect to be leveraging the power of the cloud to drive entry into new markets.

Remaking IT

As companies move to fulfill their strategic visions, they are pushing an increasing number of business functions into the cloud. The leading functional areas for cloud adoption are engineering/development, management/board functions, operations, sales, purchasing and finance.

That shift is changing the nature of their internal IT operations.

Of the 350 respondents, 36 percent said the cloud was already responsible for pushing control of IT out to line-of-business users, and in two years, 53 percent expect that to be the case.

Thirty-five percent also said the cloud is remaking their IT function, and that goes up to 50 percent projected two years into the future.

Efficiency And Savings Not All That

Only 33 percent of respondents told Oxford Economics they value the cloud for increased efficiency and only 36 percent for operational savings. Collaboration, innovation, improved customer service, time to market and business agility were all greater drivers for cloud adoption.

Roughly two-thirds of the respondents believe that in two years the cloud will boost their ability to innovate and deliver quality customer service.

Cloud Boosts The Bottom Line

Overall, The Path to Value in the Cloud report concluded that the cloud was integral to the long-range visions of business leaders.

The survey authors at Oxford Economics noted the "strong correlation" of companies further along in adopting cloud technology, and those getting better results in their bottom line.

That correlation represents the simplest, most effective selling point for solution providers.