Mainstream corporate use of business Cloud applications will more than double in the next 18 months, according to London School of Economics professor Leslie Willcocks.
Presenting interim findings from a survey of 628 organisations at the Business Cloud Summit in London, Willcocks said that more than half the respondents had “strong momentum” towards Cloud business services. Their enthusiasm was driven by speedy deployment and access to best in class applications that were previously beyond their reach, he said.
“Cloud business services are no longer hype, with two-thirds of business and IT executives viewing Cloud enabled services delivery models as driving innovations in their organisations,” he concluded.
Willcocks warned the audience that his glimpse into computing’s future wasn’t about an instant and seamless transition, but a hybrid period during which organisations and their IT departments adapted to the new opportunities and challenges of the Cloud. “The horizon is usually ‘within five years everything is going to change’. That’s not feasible time horizon; 10 years is more likely,” he said.
Willcocks didn’t like the term “Cloud computing” because it focuses too much on IT. “For me what is important is what it means for business. How are we going to use it and how are we going to leverage performance?”
The LSE’s initial findings indicate that what business wants from Cloud computing are cost/rationalisation, agility, innovation and simplicity, he said. “The Cloud offers elasticity and consumerisation. Elasticity is the ability of IT infrastructure to scale and offer things at different speeds and different times, but it’s also on the financial side.”
According to the LSE survey, 16-17% of respondent organisations are utilising Cloud applications, and 29% are evaluating them. “There’s not a massive amount of deployment yet, but at the same time, people are looking to the future and saying they are going to spend money on this: 40% plan to spend 10-30% of their IT budgets on Cloud in the next 18 months, with more investments to be made in the next five years. It’s clearly on the financial radar,” said Willcocks.
Confirming a trend highlighted by annual SiftMedia’s Software Satisfaction Awards survey, financial and ERP applications are the least suitable for cloud enablement, “at least at the moment”, he said.
With his distaste for the phrase Cloud computing, Willcocks was keen to move the discussion on to Cloud business services. The survey results also showed that business executives were keener to embrace web-based applications than their IT colleagues.
“They see powerful value in the Cloud’s ability to drive out cost, increase speed to deployment and facilitate virtual working environments,” he said.
IT executives’ reticence was more to do with concerns over lock-in, data security and other legal issues. Based on their experiences with the previous wave of outsourcing, they are rightly wary of the contractual ramifications of moving to the Cloud.
“The model that we’re being sold about Cloud computing as a slot machine that you get your credit card out and pay for the service is far from what you can do with the Cloud,” said Willcocks. “There’s a lot more you have to contract for.”
RightNow CEO Greg Gianforte backed the LSE survey findings: “What has happened in the past year is there has been a recognition in the market that Cloud is the next generation delivery model for enterprise applications.”
