Posted on: Wednesday 19th of December 2012
Cloud technologies underpin much of the new information services ecosystem. The ‘Internet of Things’ and self-quantification services rely on cloud based storage, computing power and platforms. Open data initiatives are now feasible because of cost-effective cloud infrastructure. And ‘as a service’ platforms in the data market, including Personal Clouds and Information Logistics Platforms are the ultimate fruition of multiple cloud-based components.
Given the centrality of cloud technologies to so many new information driven services, industry predictions for the growth of the cloud market are a key indicator for how the market for information services will evolve. This post looks at some of the failings and pitfalls of previous forecasts and what 2013 may realistically have in store.
Looking back at last year’s forecasts, many are off by 40% or more. That reflects the hype that’s surrounded this market – a bit like the wild imaginings of a child rustling the presents under the tree on Christmas Eve. The reality is that cloud adoption by enterprises is still lagging behind industry predictions and while 2013 is again predicted to be the year it all kicks off, history tells us it’s unlikely to be as explosive as hoped by some.
The problem lies in the unexpected sluggish progress of the corporate market. At first glance it seems perverse. The technological capability for full-scale cloud adoption is there in truckloads. The business case for organisational implementation of off the shelf yet customisable, utility-maximising processes is hard to argue with. And you would be hard pushed to go through an IT or innovation planning session without being able to shout ‘House!’ on your ‘Cloud bingo’ card.
However, delve deeper and you can see the speed bumps that are preventing full speed ahead. A big one is the battleground between internalisation and outsourcing. Cloud and its compatriots, mobile and apps, are at the forefront of this dynamic. The barriers to adoption of the ‘as a service’ model include common structural issues of slow economic growth, reduced IT budgets and the snails pace development of cloud standards that make organisations more risk adverse and more likely to look at internal optimisation rather than external IT investment.
Another barrier, not to be understated, is internal culture. Pride and image is a key one. For some companies, particularly the large industry shapers, going outside their own IT departments for the provision of major infrastructure requirements could look like an admission of internal technical failure or ambition.
Concerns over control and security are also prominent. These claims are perfectly legitimate when operational performance and data confidentiality are business critical. The fact that many cloud services, particularly private manifestations, can be as secure and possibly more reliable than in-house systems is not the point. Culture and trust are the sticking points. For some companies, outsourcing the security of your business systems just feels like too much of a risk. Part of the reason for this may lie in the private-public dialectic that the cloud straddles. It is a term just as pervasive in the world of consumer apps and mobiles as in corporate IT. For some it’s a consumer market oriented answer to a business issue. That must not sit well in all IT departments.
However, on the flipside, the consumerisation of cloud computing is the very thing accelerating its uptake within organisations. As employees take their experience and knowledge of cloud based apps from their ‘personal’ life into their work life so they intuitively discover quicker, cheaper and more enjoyable ways of doing things via the cloud, outside of their internal systems. Of course the opportunities to do so are limited by company policy and firewalls but however modest the use of it is, we are seeing corporate cloud adoption encouraged from the bottom up. This is filtering through to IT departments as part of a classic ‘ if you can’t beat them join them’ approach where it is much better to influence the direction of an inevitable trend from within rather than remain a powerless on-looker.
Where does this leave our predictions for the corporate cloud market in 2013? Well you may need to look no further than the trends in the consumer cloud market in 2011/12: adoption of cloud technologies being driven by the development and uptake of cloud-based apps and devices and the creation of a more mature market which rationalises and focuses on where the cloud can really add value. If this happens, as it has in the consumer market thanks to significant penetration of the mobile and tablet devices, then 2013 may well be the real year of the cloud for corporates.
And so, as the cloud goes so will information services. Well, maybe it’s not quite that simple but a technological and cultural shift by organisations to cloud based innovations can only be a good thing for the growth of data–led services running in the cloud – including Personal Information Management Services. The two are in fact likely to be self-perpetuating; realisation of the value in one will drive adoption of the other, and vice versa, and both markets will grow.
If 2012 was a tipping point for personal data (see our recent blog post here) then the future of 2013 could well be written in the cloud.
The next post in this series will look at the forthcoming opportunities in commercialising corporate data as one of the real growth areas in corporate cloud adoption. How is the market realising the opportunities through cloud technologies and how can the obstacles be overcome?