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How Fast Are Enterprises Moving to the Cloud?

June 5th, 2017

By now, cloud computing has gone well beyond being a simple buzzword or a flash in the pan — it’s now a mainstream, full-fledged solution that’s fundamentally altering the ways that companies do business. According to cloud computing provider RightScale, 93 percent of organizations now use cloud technologies in some form or fashion.

Of course, this single figure doesn’t reveal much about how enterprises are moving to the cloud. For one, cloud computing is better suited to certain businesses, and different companies face differing barriers to adoption.

As always, the data tells the true story here. In order to clear the air around the cloud, let’s delve into IDG’s 2016 Enterprise Cloud Computing Survey and the Economist’s 2016 “Ascending Cloud” report.

What Services Are Most Popular as Cloud Deployments?

It probably comes as little surprise that email and other messaging services are by far the most popular choice for cloud technology. According to the IDG survey, 47 percent of companies have already moved their messages into the cloud.

Although not every business has a need for specialized functionalities such as marketing automation or product lifecycle management, practically everyone sends emails at some point or another. What’s more, two of cloud computing’s greatest benefits are its security and ability to back up data — exactly what you want from an email system.

What might be more interesting are the top areas where companies plan to move to the cloud in the near future: data storage and analytics. According to the survey, while 29 percent of companies are currently using cloud storage, an additional 43 percent plan to migrate at least part of their storage to the cloud in the next few years.

The good news, of course, is that they’ll have plenty of options. Already, a number of tech titans are offering storage solutions, such as Google Drive and Microsoft OneDrive, not to mention dedicated cloud storage companies, such as Box and Dropbox.

Which Industries Are Moving to the Cloud?

Surprisingly, although cloud computing has made great inroads so far, it still has a number of barriers to overcome before it sees widespread adoption.

Of the five industries surveyed in the Economist report, banking and retail were the only ones where the majority of experts thought that cloud computing was already a “pervasive” or “significant” factor. This growth is in part thanks to digital businesses such as e-commerce stores and FinTech (financial technology) startups that use cloud technology to compete with physical banks and retailers.

At 39 percent, health care was the sector where the cloud has had the least impact. The lack of adoption here is likely related to regulations such as HIPAA that make health care companies wary of sending their data to a third party. However, new innovations such as telemedicine and cloud storage of medical studies almost guarantee that the health care industry will continue to take up the cloud in the years to come.

How Much Are Companies Spending on the Cloud?

Enterprises both large and small are making serious investments in the cloud. Although companies reported that they planned to spend an average of $1.56 million on cloud services in the next year, individual amounts varied wildly from this single figure.

For businesses with fewer than 1,000 employees, a plurality — 43 percent — said they were budgeting under $50,000 for cloud computing expenses, roughly the average salary of a single employee. On the other hand, 40 percent of businesses with more than 1,000 employees said that they’d be spending a cool million dollars or more.

Final Thoughts

When distilled into these separate questions, the story of companies’ cloud migrations becomes a lot less about the hype and buzzwords and a lot more about the reasoning behind the trend. That’s the power of data visualization:¬†allowing people to view information in new ways that let them explore and come to their own conclusions.

By Alex Hsi

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