UPDATED 18:55 EDT / JUNE 25 2013

Cloud Adoption Growing Fast and Not Just in Enterprises

Cloud adoption is growing at greater than 25% CAGR says Jane Munn, cloud business line executive for IBM’s Systems & Technology Group. And that growth is not confined to online services & large enterprises. SMBs are a definite growth market that IBM is working with its partners to tap.

Implementation strategies are highly individualistic, however, Munn said in an interview with SiliconAngle at IBM Edge 2013 in Las Vegas. Most large companies run their own private clouds and tend to start with one or two workloads and then add more in a carefully phased approach. The hybrid versus private approach varies widely depending on the kind of workload and company security needs. Highly predictable workloads often work well in private environments, while those with seasonal or unpredictable wide variations in demand work best in hybrid environments that allow bursting into the public cloud — for IBM clients often the IBM SmartCloud — to cover demand peaks.

IBM’s cloud software runs on PureFlex systems. However, IBM can provide considerable flexibility in the precise hardware, not only in sizing it to fit the anticipated workload demand but also to match what the client wants. “Some clients may have an operations staff that’s trained on a specific IBM system, say a Power 770 or whatever the model happens to be,” she says “They want to do a cloud, but they want to do it with that hardware because they know it.” IBM has flexible deployment models that let it accommodate that kind of request. One major attraction cloud offers to customers and IBM business partners is simplicity. It is a way to simplify IT operations as well as end-user access to IT resources, and part of that is delivering the system on hardware that the customer is comfortable with. “Our strategy is choice,” she says.

One growth market for cloud inside large enterprises, she says, are CMOs. Several sources have reported that in many large companies over the next few years the marketing departments are going to spend more on IT than the IT organization, in part because they have the budget and in part because some of the most compelling early use cases for cloud have been in marketing, so they understand the value they can derive from it. “We are seeing the CMOs in LOBs who want to put up their own clouds,” she says. In large enterprises they may work outside the ITO, but they do not want to put most workloads on public cloud services. Smaller companies, on the other hand, are definitely moving to SaaS and IaaS and replacing their internal computing infrastructures.

Some IBM MSPs and business process outsourcers are building their own private clouds and marketing cloud services to their SMB customers who don’t want to build their own internal clouds but don’t want to put their core systems on a public IaaS or SaaS system. IBM actively partners with these MSPs both in both building these MPS clouds and marketing the services.

Some of these are regional service providers. Many companies prefer to work with providers located in their country or region. These providers speak their language and better understand local conditions including regulatory environments as well as political and cultural issues.

For SMBs that want internal clouds but lack the staff to run them, IBM offers services that will implement a cloud system for the customer and then run it through a remote cloud management service. This can be a popular option for startups. New companies today don’t build IT departments. Instead they look to the public cloud, either IaaS or SaaS or a combination, and basically charge their IT on a credit card. As they grow, however, they often reach a point where they need an internal cloud. For some it is a purely economic issue — as workloads grow it becomes more economical to bring them in-house. For others it may be a control or security issue. But they still do not want the expense and distraction of hiring even a small IT staff. And while these companies may be small in numbers of employees, they may have large amounts of data and a need for real horsepower in their cloud. Multimedia companies, for instance, work with very large files that they need to be able to access, edit, manipulate, and deliver to their customers rapidly.

A private cloud structure can also facilitate data-level integration among multiple applications. Some companies create a storage cloud for all their data and share that among their applications, making data from transactional systems such as ERP available for decision support and Big Data analysis secondary applications. Other companies, again, choose not to do that for various reasons, including security and privacy concerns in regulated industries.

ROI is very different for private/hybrid cloud than for virtualization, Munn says. Cloud presupposes a virtualized (or mainframe) environment. It can provide some additional cost saving, for instance by using low demand times for primary applications to run secondary or tertiary applications.

However the real justification for cloud, she says, is to support innovation. Cloud is an integral part of the group of new technologies that are impacting IT, business, and the way we live, including Big Data, mobile, etc. These forces must be seen as a unified environment for the new IT and the radical new society that is being built on it. Each drives the others, and combined they drive intense innovation. Cloud computing is a vital part of that for companies, whether for supporting the increasing population of mobile systems used by both employees and customers or as the basis for totally new kinds of businesses and business strategies that could not even be envisioned a decade ago. That is the real driver behind the spectacular growth in cloud computing and the private/hybrid cloud market and the reason that one way or another in a very few years almost everything will live in the cloud.


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