The Cloud Industry Forum (CIF) has made a number of predictions for 2013 which we put to members of our Channel Cloud Xchange members to see if they agreed or had their own opinions.
CIF has conducted three research projects over 18 months looking at Cloud adoption in the UK, and as such has a sound basis for making an assessment and evaluation of trends. This is their thinking for the year ahead.
1.First time adoption of Cloud Services will increase by 15 points (25 per cent in real terms) by the end of 2013, meaning that 76 per cent of all businesses in the UK will be formally using at least one Cloud service by that time.
2.There will be little or no block to organisations by either size or sector to participate in the use of Cloud Services. Clarity over the impact of industry regulation and sovereign law will become more transparent and evidential to ease confusion and reduce misinformation.
3.Secondary adoption (i.e. existing users expanding their Cloud Services) will exceed 80 per cent by the end of 2013, meaning 4 out of 5 Cloud users will have increased their expenditure on Cloud Services.
4.Growth by IT discipline will likely be higher for application areas covering collaboration solutions, IaaS/storage, data backup/disaster recovery, data security, IT management and online services (social media, eCommerce and web).
5.Continued rapid convergence of fixed and mobile voice/data communications with IT will be a core enabler of effective Cloud adoption.
6.Key technology innovation around hosted desktop, management and governance of distributed IT estates, BYOD, Big Data and Apps will be the drivers of step change in the workplace and business process.
7.The vast majority of organisations will follow a ‘hybrid’ strategy of both on-premise and hosted/Cloud Services. This will continue a trend of a new spin on the concept of distributed IT. Less than 3 per cent of companies will use an entirely Cloud Services approach to the delivery of IT by the end of 2013.
8.PAYG options will continue to stimulate interest and initial adoption of Cloud Services, however, organisational attitudes will still favour predictability of cost over PAYG metering from a pragmatic planning perspective.
9.Cloud service contracts will become more standardised as model clauses become more prevalent. Key topics covered in agreements will include data sovereignty, data protection, service levels and business continuity options, liability and the data recovery process at contract end.
10.The ability to try-before-you-buy will become the expectation/norm. Service led consultancies and resellers will establish trust with companies moving to the Cloud through on-boarding and management services.
Simon Skellon, Sales Director UK, at Mitel says that research his company carried out with over 650 IT managers who attended VMWorld 2012, supports the Cloud Industry Forum’s predictions on an increase in first time adoption of cloud services and the expansion of cloud services by existing users.
“The survey reveals growing demand for cloud-based telephony and unified communications, with eight out of ten IT managers confirming they are convinced of the benefits of moving unified communications to the cloud. In fact, only 4% of IT managers said they are not considering a cloud-based approach, with cost savings, predictable cost models and easier management cited as the main benefits.
The Forum is predicting the rapid convergence of fixed and mobile voice/data communications with IT and at Mitel we are seeing customers are increasingly looking to the cloud to deliver these IP telephony and unified communication services and applications. In 2013, we believe that cloud and virtualisation will undoubtedly dominate and we’ll be working hard with our channel partners to capitalise on the opportunities it brings and support them if it becomes a larger part of portfolios.
The Mitel Work 3.0 whitepaper, published in 2012, predicts the next generation model for smarter business and we believe there is little doubt that the cloud has a significant role to play in defining a new way of working. As the whitepaper sets out, technology trends such as cloud computing and unified communications present a powerful proposition for a new workplace, driving communication and collaboration across any device and location, for every user.
The Forum predicts a ‘hybrid’ strategy in the cloud approach, with both on-premise and cloud services being used within an organisation. As workplaces evolve, hybrid systems will likely have a key role, but in contrast to the Forum’s predictions, ultimately we believe we could see a fully cloud-based approach being embraced by many businesses. As a leading provider of a both cloud and premises-based unified communications software solutions, Mitel will continue to aim to be ideally placed to help its partners deliver best-in-class, hybrid solutions in 2013.
More Strategic Solutions
Alan Mackie, Head of SIP Services at Gamma believes that some interesting trends are being predicted by the CIF report , and all basically pointing towards more SMEs and Mid-market customers adopting Cloud based services in the next 12 months to drive efficiency and cost savings for the business.
“This is a trend that we are seeing at Gamma with a steep increase in the uptake of our cloud based voice and Ethernet services.
The barriers of poor access that once existed are being resolved by the rollout of high quality / high availability Ethernet and Fibre services within the UK. Gamma provides Converged Ethernet services that allow businesses to access both Public and Private cloud based services, such as hosted voice services with service level guarantees to support those business critical applications with assurance.
We would predict that companies that ‘dipped their toe’ into cloud services using storage and backup solutions for the past few years are now confident to consume more strategic applications via the cloud model and will look to move critical business applications such as voice into the cloud and use the ability to integrate with other hosted services such as CRM to create a resilient infrastructure for their organisation. This is a trend that Gamma has noticed over the past 12-18 months with a large percentage of SIP Trunking and Inbound Routing solutions being delivered to Data Centres , both Public and Private, to support customers’ Unified Communications implementations. An example of this growing trend is the Gamma partnership with Amazon Web Services , supporting users requiring scalable voice connectivity to the Amazon Data Centres.”
Alan MackieWorking Smarter
Reacting to the CIF predictions, Richard Thompson of TalkTalk Business, says, “In early 2012, a Channel Cloud Xchange survey commissioned by TalkTalk Business found that 70 per cent of resellers predicted cloud technology would experience the greatest growth in demand from end users over the year. Attitude to the cloud has slowly transformed over this time, and it is of little surprise that market predictions point towards it continuing to do so in the year ahead.
The promise that cloud computing will enable businesses to work smarter is one based in reality - and for end users to turn to the technology with confidence as part of their telecoms strategy, the opportunity for resellers is to identify how the right applications can help end users streamline their processes, facilitate remote working and achieve great value for money.
For Britain to be truly competitive, all companies should be able to access the technology that will enable them to communicate with their markets and influencers. As a business one of our key objectives is to help remove the barriers that many SMEs face to getting online, and simplicity in the surrounding dialogue is an essential step forward to making digital inclusion a reality.”
Commenting on the rise of secondary services adoption Thompson says, “As referenced in the TalkTalk Business Cloud Light Read white paper, more than 8 out of 10 businesses have at least some of their infrastructure already in the cloud and a further 75 per cent have moved up to half of their existing IT infrastructure in to the hosted space. Some of the drivers behind the growing movement towards hosted solutions are market-wide and, indeed global by nature; for example, the financial downturn and the growth of consumerisation.
Coupled with these trends, at an enterprise level, the business case for deploying applications in the cloud has been justified on the basis of: reduced run time, quicker response time, lower physical infrastructure risk, minimal cost of entry increased pace of innovation.
Maturing Markets.
David Dadds, Managing Director of VanillaIP, agrees with CIP that first time adoption of cloud based services is rapidly rising.
“We have reached a point in the market where we are encountering a classic case of an application maturing beyond the early adopters. Our experience of the market is one where we see users looking for unified solutions that they can simply ‘consume’. Likewise we see no sector or industry barriers to adoption of these applications – OPEX is the easiest deployment model for organisations that wish to grow their business. It is highly scalable both up and down and reduces the need for expensive in-house IT staff. In that respect the market is now less divided by size of user and with application provisioning tools such as our own UBOSS, it is far easier for resellers and their users to add further cloud based services.”
Dave DaddsWith regards to hot application areas Dadds says that these are more diverse than the CIF predictions and that cloud based service providers need to have a wide range of products and services available for their customers rather than a mere few.
“The more services you can layer together the greater their chance of adoption – as I said earlier, we have to make it as easy as possible for the user to consume these products. This is a key success factor for resellers. They should be looking to provide that Holy Trinity of services, IT, telephony and mobility, for each of their users.
CIF point to BOYD and Apps being more easily deployed via the cloud and we agree. Ultimately the cloud is an on-demand and shared service whereas CPE is not. We believe that today the only real driver for CPE solutions is habit and vendors who hope that CPE has longevity in the market. If they don’t believe that themselves then they don’t really have a business long term.
What business today has a really clear vision of what they will be doing in five years’ time? Therefore, a blend of models and applications will suit most users. For example, for a fixed service cost of say £500 a month the user can access a range of applications. It’s worth remembering that users prefer being ‘locked in’ by great service that 36 month supply contracts!”
Concluding, Dadds says, “The CIF prediction that try-before-you-buy will become more standardised as a model is here now as the services are supplied on-demand. Now there’s something you just can’t do with CPE solutions.”
Ed Says…
According to the February 2013 Analysys Mason report, the worldwide market for enterprise cloud-based services will grow from USD18.3 billion in 2012 to USD31.9 billion in 2017. The year-on-year growth rate will be 17% in 2013, but will decrease during the next five years as the size of the cloud services market increases overall. Software-as-a-service (SaaS) accounted for 66% of revenue in 2012, while 33% was related to infrastructure-as-a-service (IaaS). This revenue split will change during the next five years, as the share of revenue from IaaS increases to 43% by 2017.
Who will be providing these services to users? Well according to the same report Communications service providers (CSPs) will account for an increasing share of enterprise cloud services sales as they bundle more offerings with core connectivity. CSPs will become more adept at offering a high-quality cloud solution with network- and application-level SLAs, which will drive more enterprises to adopt cloud services. CSPs will be responsible for 18% of total worldwide enterprise cloud services revenue by 2017. CSPs will account for 12% of worldwide revenue from enterprise cloud services in 2012, down from 14% in our previous forecast, as CSPs continue to position themselves as ICT providers rather than communications providers to large enterprises and small and medium-sized enterprises (SMEs). It’s all to play for then.