New survey reveals a surge in cloud-first adoption strategies

Slide from 2016 Future of Cloud survey

If there are any remaining doubts that the cloud has gone mainstream, new research by a consortium of 53 companies led by North Bridge Growth Equity and Venture Partners and the research firm Wikibon should put them to rest.

The sixth annual Future of Cloud Computing survey of 1,351 organizations across the globe finds that 90 percent have some form of cloud strategy already in place and 42 percent are driving at least half of their business through cloud-based applications. Four out of five companies report that they are getting at least some revenue from the cloud. Only 9 percent of respondents say they don’t use the cloud at all.

The principal reasons organizations use the cloud is to enjoy the benefits of scalability (51 percent), business agility (46 percent) and cost (43 percent). Mobile and open source applications grew strongly as cloud drivers compared to last year’s study.

Consistent with other research, the survey found that the hybrid cloud model is dominant, with 47 percent of respondents pursuing that strategy. Thirty percent primarily use public cloud and 23 percent opt for private cloud. “Cloud environments will remain predominantly hybrid in the coming years, enhancing the importance of a clearly defined cloud governance and orchestration strategy to optimize for security, self-service and agility, while minimizing costs,” said Holly Maloney McConnell, principal at North Bridge.

Cloud-first approach nears tipping point

Organizations are increasingly adopting a cloud-first strategy, with 42 percent of respondents saying that is their direction, while 49 percent use cloud selectively. “The continued growth in the cloud-first enterprise is forcing traditional IT vendors to accelerate pace of acquisition to fortify their cloud platform strategies,” McConnell said.

Software-as-a-service is the top choice for cloud deployment; while seven in 10 companies indicate they are using SaaS, the likely figure is much higher, since many common online tasks are now performed by web applications that users may not define as cloud.

Infrastructure-as-a-service is close behind, with 58 percent of respondents using it for at least some computing task and 53 percent for storage. Platform-as-a-service has the lowest adoption rate (45 percent) but is expected to grow the fastest, with planned usage increasing by 19 percent over the next two years on top of 33 percent growth in just the past year.

“This year’s survey showed a strong move toward a more strategic and nuanced view of hybrid cloud,” said said Stuart Miniman, senior analyst at Wikibon, a sister company of SiliconANGLE. “Broad SaaS adoption, deep analytics, and emerging areas such as IoT and AI highlight that the value of data is a large consideration when building a cloud strategy. As the cloud ecosystem matures, users are turning to a broad spectrum of technology and integration companies to help unlock the potential of cloud.”

The top inhibitors to cloud adoption changed markedly over last year’s survey, with a surge in concern about vendor lock-in, bandwidth and pricing. Respondents worry most about security (38.6 percent), vendor lock-in (30 percent), privacy (28.7 percent), complexity (24.4 percent) and regulatory/compliance (24.3 percent). Security concerns have fallen significantly in the past year, but security is still a top issue. Paradoxically, half of respondents see security as a benefit of the cloud while the other half see it as a barrier to adoption.  

Cloud applications are clearly clustering around distinct functions and industries. Analytics, containers and internet of things are top technology priorities, while marketing, business analytics and customer service are the most popular use cases.

Webcast to explore findings

Wikibon and North Bridge will reveal more findings and discuss the research in detail in a webcast to be held on Tuesday, Dec. 13 at 1PM EST. Participants include Miniman, McConnell and Paul Gillin, enterprise editor of SiliconANGLE. Register here and follow @futureofcloud and #FutureofCloud on Twitter.

An archive of previous studies is here. The full 2016 presentation is also available on SlideShare.