Big companies used to be unsure about the security of cloud. In 2015, there was a noticeable shift as enterprises became increasingly convinced that the safeguards of cloud providers trumped those of their own in-house datacenters.
- From Worried to Confident
- Changing Perception Fueling Rapid Cloud Growth
- Cloud in a Single Step
The affordability and easiness of cloud computing have really never been in question. That’s made it hugely popular among startups and other SMBs, while enterprises have been skeptical about the risk of moving more of their data and systems off-site.
However, times have changed, after big companies began to realize they were falling behind and making their market position vulnerable through their aversion to cloud. Enterprise cloud started to really gain steam in 2015, according to Kevin Kelleher of Time.
From Worried to Confident
Cloud computing has essentially been around since 2004, when Salesforce first launched. Startups started to dabble in cloud as Workday and other software-as-a-service (SaaS) brands joined Salesforce on the front lines, but the sea change was the emergence of infrastructure-as-a-service (IaaS). By giving new companies incredibly simple, immediate, and resource-efficient computing through remote datacenters, firms were able to get high-grade systems without having to fund their own on-premises hardware – in other words, making it easier to set up computing as an OPEX (operating expense) rather than a CAPEX (capital expense).
Enterprises, meanwhile, have been unsure about cloud both because they have been skeptical about security and because of potential integration challenges with long-established legacy architecture.
However, the consumer cloud (YouTube, Spotify, etc.) has been enormously helpful as a sort of guinea pig for the enterprises. “Companies came to see that tens of millions of consumers weren’t wrong,” notes Kelleher. “They saw the lower costs that come when a reliable utility can offer economies of scale.” Plus, they realized that it would make it much faster for them to deploy software if they didn’t need to design and host their own system to back it.
Additionally, cloud hosting providers began to cater more to the concerns of enterprises. They started making it easier for firms to create hybrid clouds that allowed them to place whatever data they wanted to keep on-site within their own private clouds while still being able to leverage the public cloud for its affordability and ease.
Finally, contrary to the whole security conversation about cloud that dominated headlines for the last few years, companies started to understand that it was actually safer to have their data with these external hosting specialists. Consider the fact that huge hacks over the last few years such as Home Depot, Target, and Sony have been assaults on systems that were maintained in-house. It certainly doesn’t speak well for the do-it-yourself model.
Cloud is, in fact, an opportunity to get more features but also to enhance your security, notes Andreeson Horowitz Board Partner Steven Sinofsky. “The most substantial development in 2015 will be enterprises defaulting to multi-tenant, public-cloud solutions recognizing that the perceived risks or performance and scale challenges are far less than any existing on-prem or hosted solution or upgrade of the same,” he said in 2014. “The biggest drivers will prove to be the need for primarily mobile access, cross-enterprise collaboration and even security.”
Changing Perception Fueling Rapid Cloud Growth
Firms that used to be unsure about cloud started investing more in the technology in 2015. The thing about enterprise adoption is, all it takes is a little shift in sentiment for a technology to explode. Now, the projections have become mind-boggling. According to Cisco, 3 out of every 4 enterprise processes (78%) will be cloud-hosted by 2018.
How are each of the different layers of cloud doing?
- SaaS: estimated portion of 2015 IT budgets was 15%.
- PaaS/IaaS: projected to rise from 5% to 11% of spending between 2014 and 2018.
Beyond the pubic options, “a company can build a private cloud on its own premises, or ask another company to build and host their private cloud,” notes Kelleher, “where they can use a public cloud… that share resources with others.”
As cloud companies have increasingly reorganized their plans to better meet the needs of the enterprise, enterprises have in turn become more open to using the cloud. That has meant that it is no longer considered a “starter” technology that is only used by companies just entering a market. It’s taken seriously – and adopted increasingly – by the biggest, most recognizable brands in business.
Now that enterprises have become more comfortable with the idea, cloud has effectively become the new standard for computing in both consumer and business contexts.
Cloud in a Single Step
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