From The Expert Feature Article
February 05, 2013

Enterprises Focused on Building Internal Clouds

Nearly half of today’s enterprises have internal cloud projects planned for 2013, as many remain skeptical as to whether or not they can actually save money by using the public cloud, according to a new study.

TheInfoPro, a service of 451 Research, interviewed 100 IT decision makers, and found that 47 percent had internal cloud projects planned for this year.

The cloud has become a proxy for internal transformation, as adoption of technologies like virtualization and efforts to radically standardize and consolidate have all been classified as cloud initiatives, according to Peter ffoulkes, research director of cloud computing at TheInfoPro.

“The digital infrastructure of the future will provide CIOs with an assortment of service delivery venues, which will enable users to schedule or automate the delivery of workloads to the most suitable internal or external clouds depending on workload characteristics, SLAs and policy requirements,” ffoulkes said in a statement.

The annual study is based on interviews with primary decision-makers at large and midsize enterprises in North America and Europe.

While the market for cloud platforms today is small – of those responding to the survey, only 26 percent said they’re currently using a cloud platform. But the future looks bright, as 40 percent of respondents said they are in-pilot and will deploy in the next 18 months.

“As IT organizations complete their infrastructure virtualization and automation projects and turn toward cloud initiatives, there will be significant upside opportunity for a veritable host of cloud service and cloud enabling technology vendors over the next two years,” ffoulkes added.

Based on the study, TheInfoPro expects enterprises to remain focused on building internal environments that mimic the functionality of cloud service providers such as Amazon.

In addition, many of the organizations interviewed have more clarity about the potential cost savings of their internal private cloud initiatives. End users expect greater savings from their internal cloud efforts, with 36 percent expecting savings of between 1 and 10 percent from their internal cloud efforts, and that much of the expected savings will come as a result of increased automation.

Other key findings of the study include the following:

  • The majority of enterprises remain in the initial stages of their internal transformation. Sixty-four percent of those interviewed indicated they remain in the initial phases – standardization, consolidation and virtualization – of the internal cloud journey, with 61 percent in the virtualization phase.
  • Forty-seven percent said they are facing significant roadblocks in their quest to move beyond virtualization toward automation; 34 percent cited non-technical issues (organization/budget, people/time and buy-in /resistance to change) and 13 percent said technology issues would likely thwart their efforts.

Amazon remains the clear leader in the IaaS space. When asked to identify their existing cloud service providers, 19 percent of respondents chose Amazon, while 8 percent chose Verizon and 5 percent selected Rackspace (News - Alert).

“The opportunity to participate in a rapidly growing market coupled with the necessity of defending existing markets, has brought in competitors from a variety of market segments including telecommunications, Internet infrastructure providers (e.g. Amazon and Google (News - Alert)) and traditional hosters,” ffoulkes added.

TheInfoPro study, conducted during the second half of 2012, identifies major initiatives and explores several fundamental areas, including implementation plans for more than 12 technologies, macro IT influences transforming the sector, drivers of cloud adoption, and provider-selection criteria.

Edited by Braden Becker