Bracing for a future that involves AI and ever-increasing data sets, CIOs face great cultural challenges.
Public cloud: 8 stats to see
As you explain cloud - and your latest cloud decisions - to others in the organization, you'll want some data points for context
CIOs don't want to debate cloud adoption any more: They want to talk cloud optimization, as Jeff Budge, VP at OneNeck IT Solutions, recently noted. Analyst outlooks and research reports back this up, showing rapid growth for public cloud and hybrid cloud in the months and years ahead.
As you explain cloud – and your own cloud decisions – to others in the organization, you'll want some data points for context. So we've highlighted a few studies that help tell the public and hybrid cloud story for 2018 and answer some relevant questions: Where does cloud land on a CIO's priorities list? Is it living up to its cost-savings promise? How much work is shifting to the public cloud? Dig in for more.
2018 global cloud market: $178 billion (Forrester): According to Forrester’s cloud predictions, the global public cloud market will jump from $146 billion in 2017 to $178 billion in 2018. Beyond this year, Forrester predicts it will continue to grow at a 22 percent compound annual growth rate (CAGR).
Also noteworthy according to the Forrester report:
- Public cloud platforms represent the fastest growing segment: They will generate $44 billion in 2018, Forrester predicts.
- By the end of 2018, more than half of global enterprises will rely on at least one public cloud platform for digital transformation, Forrester predicts.
Nearly 80 percent of companies studied plan to have more than 10 percent of their workloads in public-cloud platforms in three years, according to McKinsey's 2017 global cloud cybersecurity research. "Just 40 percent of the companies we studied have more than 10 percent of their workloads on public-cloud platforms; in contrast 80 percent plan to have more than 10 percent of their workloads in public-cloud platforms in three years or plan to double their cloud penetration," the report states.
Who's investing the most in cloud? Manufacturing. Where will the most spending occur? IDC breaks down investment by industry and region in its public cloud spending forecast for 2018. “The industries that are forecast to spend the most on public cloud services in 2018 are discrete manufacturing ($19.7 billion), professional services ($18.1 billion), and banking ($16.7 billion). The process manufacturing and retail industries are also expected to spend more than $10 billion each on public cloud services in 2018,” notes IDC.
IDC also predicts that the United States will be the leading country in cloud spending, accounting for $97 billion – more than 60 percent of global spending.
Cloud rates third on CIOs' investment lists: Where does cloud fall in CIOs’ overall IT investment priorities for this year? The 2018 State of the CIO survey results from CIO.com list cloud computing as ranking third (28 percent), behind enterprise applications (35 percent), and data/business analytics (33 percent).
IT hardware growth gets new life thanks to hybrid cloud: What does all this cloud spending mean for on-premises data centers? According to Morgan Stanley, “Several catalysts are converging to give IT hardware a second life – and drive double-digit earnings growth in 2018,” writes Katy L. Huberty, Head of North American Technology Hardware Equity Research. “One of the biggest detractors of growth hasn't been the actual migration of computing to cloud, but rather decision-making around the cloud. For the last few years, enterprises have been putting IT hardware spending on hold while they grapple with decisions around how, when, and how much of their workloads to move to the cloud. While companies plan to migrate a larger share of their workloads to the cloud, they aren't abandoning on-premises computing. Instead, many are adopting a hybrid IT model in which applications move between a public cloud and their own internal data centers.”
Biggest draw and biggest pain of cloud: Cost: Now that we’re shifting focus in 2018 from adoption to optimization, what exactly needs to be optimized? A recent study from 451 Research illuminates one area that needs work: cost.
Their report shows that cost-savings are the top motivating factor for CIOs moving to the cloud model, at 38.8 percent. (Resource scalability and time to market/agility rank high as well; both were cited by about 32 percent of respondents.) However, post migration, cloud costs become the number one pain point, according to 451's data.
According to 451 Research, “Cloud is an inexpensive and easily accessible technology. People consume more, thereby spending more, and forget to control or limit their consumption. With ease of access, inevitably some resources get orphaned with no ownership; these continue to incur costs. Some resources are overprovisioned to provide extra capacity as a 'just in case' solution. Unexpected line items, such as bandwidth, are consumed. The IT department has limited visibility or control of these items.”
For expert tips on controlling cost and other multi-cloud management issues, read our related article, Multi-cloud management: 6 expert tips.
[ Want to create a more agile IT organization? Learn how and get the digital transformation Ebook: Teaching an elephant to dance. ]
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