In a recent Gartner press release, the projected growth for public cloud services worldwide was predicted to increase 16.5% in 2016 to $204 billion. Cloud applications will still be sought after and grow 20.3%. The growth is contributed to digital business strategies being adopted by most organizations and paving the way to move from legacy systems to cloud-based services.
1. Cost and Economies of Scale
The claims that cloud services are cheaper than traditional IT can be argued successfully from both sides. Cloud services are definitely less expensive for short term projects where the resources are needed on a temporary basis or overflow demand during peak usage periods. In traditional solutions, IT departments would need to procure entire hardware systems to support temporary or additional demands. With cloud services, the resources can be obtained quickly and companies pay for what they use. However, in the long run, the cost of using cloud services is comparable to traditional solutions.
However, prices have dropped 66% for many cloud services over the last three years. The pay-as-you-go model makes cloud services attractive as organizations have greater control over their short-term IT spending and greatly reduced capital expenses. Additionally, organizations are not committed to the long-term investments required in traditional IT.
2. Confidence in the Public Cloud
When cloud solutions were initially introduced, organizations were unsure about the credibility or reliability of the cloud. Security, compliance, and trust were chief concerns. Over the course of a few years, much has been learned about building the right cloud solution and how to effectively use the cloud. The major concerns have been addressed satisfactorily for most organizations through hybrid solutions where sensitive data is stored in a private cloud and functionality is provided by the more cost-effective public cloud.
Early adoptions started out small and expanded as organizations and staff realized the value and ease of using a public cloud. Confidence is increasing as organizations successfully use the public cloud for non-mission-critical workloads. As organizations see the value, they can confidently migrate another system to the public cloud. Small steps have allowed many organizations to lose their inhibitions in cloud services.
Scalability in traditional IT typically addresses adding to the existing infrastructure, but rarely scaling back. Significant time and expense is required to add resources to the current infrastructure and in many cases the added resource is underutilized. Public cloud solutions are designed to acquire and release resources on demand as the needs of the customer change.
Machine learning, Big Data analytics, and the Internet of Things are specialized areas growing in the cloud in ways difficult to replicate within an internal IT infrastructure. Rapid changes in demand for resources and even specialized skill and knowledge on infrastructures supporting these processes are major reasons for adopting the cloud as traditional deployments would be highly expensive to deploy and maintain.
More importantly, organizations can focus on their primary business not IT management when adopting cloud services. IT management is performed by the managed service provider and enough transparency is in place to allow the consuming organization to see important trends in resource usages. As cloud providers start to differentiate themselves from other cloud providers, specialized solutions for various business processes will begin to emerge and rapidly shift how the cloud is used.
Cloud computing is here to stay. The biggest question facing organizations today is how the cloud can be used effectively in current situations. Hybrid solutions, small scale adoptions, and short-term resource acquisitions are great way to introduce organizations to the cloud and then expand usage as a deeper understanding and trust of cloud value is established.
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