5 Key Drivers for Enterprise Cloud Adoption

By Anirban Guha on June 19, 2015

5_Key_Drivers_of_Cloud_Service_Adoption

In recent years, Cloud migration has progressed beyond development and testing, and there has been a tremendous upsurge in adoption of Cloud services among IT organizations. Enterprises, all over the world, have unique requirements and challenges when it comes to Cloud computing. Especially for startups and small and midsize businesses (SMBs), Cloud has emerged extremely advantageous as personnel and financial resources are limited. Cloud provides enterprises the flexibility to focus on their core competencies and reduce cost to a great extent.

Although there are security concerns associated with Cloud adoption, the rapid adoption of enterprise-class cloud computing implies that the concerns are being met. This becomes more convincing when we look at IDG Enterprise’s Cloud Computing Study, which says that 24% of IT budgets will be allocated to cloud solutions in 2015, with the highest percentage being allocated to Software as a Service (SaaS) models.

With the amount of interest Cloud has managed to build up among startups, SMBs, and Chief Information Officer (CIOs), we have tried to analyse and compile the most important drivers of Cloud services adoption.

1. Increasing business agility – Business agility is undoubtedly the main benefit and key driver behind Cloud adoption among enterprises. It has been found that enterprises who have adopted Cloud have gained competitive advantage by reducing complexity and increasing business agility. Even for SMBs and independent software vendors (ISVs), business agility has been the main reason for moving to Cloud. Enterprises that have adopted Cloud have observed improved agility due to on-demand self-service and rapid elasticity. Moreover, IT resources can be acquired and deployed more quickly and, once deployed, they can be increased or decreased as needed to meet the demand.

2. Reducing cost – This is definitely one of the key drivers behind Cloud adoption. Many enterprises have witnessed a considerable reduction in license and services spend by adopting Cloud services, compared to legacy systems. In many cases it has been found that the cost of replatforming to the cloud is actually much lower than the license renewal of their legacy apps. For SMBs, this benefit leads to a very healthy return on investment (ROI) after year 1. Cloud computing enables organizations to reduce cost through server consolidation, thin clients and community cost sharing.

3. Enforcing mobility – An increasing number of enterprises are driven towards Cloud technology, because it is ubiquitous, self-configurable and cost effective. With remote working gaining popularity among organizations, Cloud computing is enabling employees to work at any place, at any time, and on any device. In recent years, the way smart mobile devices market has matured and got acceptance has made mobility a key driver behind Cloud adoption. In the days ahead, more and more enterprises are expected to join the race to launch new Cloud computing solutions of all sizes to be more efficient and gain competitive advantage.

4. Improving productivity – Every organization is concerned about improving productivity and Cloud computing is seen as an ideal option by many organizations. Use of Cloud-based tools for email, instant messaging, voice communication, information sharing and development, event scheduling, and conferencing is becoming an increasingly common feature of business life.

5. Creating new business avenues – An enterprise can get new business opportunities as a provider of cloud services or added services. Organizations that have good track record of its own IT can become a public Infrastructure-as-a-Service (IaaS) or Platform-as-a-Service (PaaS) provider. One business opportunity could be, if a company implements a private cloud and has spare capacity, it can sell that additional capacity as public Cloud to another company. On the other hand, software companies can expand their market by providing cloud services in the form of Software-as-a-Service (SaaS).

The drivers discussed above will impact enterprises at different levels. Any organization will only benefit largely from Cloud adoption, if it is considered, planned and implemented strategically.

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