10:55 AM

Verizon: Cloud Computing No Longer A Differentiator

A Verizon report finds businesses are moving deeper into the cloud, but the survey also indicates the competitive advantages of cloud technologies are diminishing.

Hybrid Cloud: 7 Ways It's The Best Of Both Worlds
Hybrid Cloud: 7 Ways It's The Best Of Both Worlds
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A Verizon report finds businesses are moving deeper into the cloud, but the survey also indicates the competitive advantages of cloud technologies are diminishing.

More than two-thirds (69%) of enterprise businesses report that cloud computing has enabled them to re-engineer one or more of their business processes, as the technology is increasingly becoming the norm, according to new report from Verizon.

The Verizon report, released Nov. 9, entitled "State of the Market: Enterprise Cloud," is the company's third annual report that looks at and analyzes the effect cloud computing is having on large businesses and enterprises.

The report combines internal Verizon data with insights and analysis from third-party research and analyst firms, including Forrester Consulting, Gartner, and IDC. The complete report is available as a free download from Verizon's website.

The report is based on an October survey of Verizon's enterprise-level cloud customers, but the company doesn't specific how many businesses that includes.

In addition to those businesses that report the cloud is allowing them to re-engineer their businesses processes, 88% of enterprise report the cloud improves responsiveness to business needs, and 65% note the technology improves overall operations.

(Image: 4X-image/iStockphoto)

(Image: 4X-image/iStockphoto)

Around half of companies say that they will be using cloud for at least 75% of their workloads by 2018 and more than a third of organizations have already adapted their business model using cloud technologies. For example, the cloud can allow a business to create new customer experiences or radically change its cost base.

A further fifth are in the process of doing so, according to the report.

The study also found more than half (53%) of enterprises use between two and four cloud service providers, with 84% of companies reporting that their use of cloud technology has grown in the last year.

However, a quarter of respondents reported that they haven't been able to use the cloud to adapt business model -- though they see potential -- and 19% told researchers that the cloud has not helped them to adapt at all.

Overall, only 6% of respondents in the survey report that they think their company would have less than a quarter of workloads in the cloud by 2018.

More than three-quarters (77%) of respondents report that cloud technology gives their businesses competitive advantage, compared with 74% who reported the same the results in the 2014 report. However, the percentage of businesses who think the cloud gives them a "significant" advantage fell to 16% from 30% in 2014.

Those results are not surprising and many IT departments and CIOs believe that cloud is just the way business is done now -- the new norm of IT infrastructure. A report released earlier this year by the Harvard Business Review Analytics Services found that the competitive advantage of moving to the cloud has now eroded.

[Read about the growth in public cloud.]

The Verizon report categorized businesses in three personas according to how they view and use cloud technology: Skeptics at one end, natives at the other, and pragmatists in between.

The report singles out the pragmatists as the true believers -- those companies that are taking a measured approach, striving to create an enterprise-class infrastructure using standard components from cloud providers tied together using application programming interfaces (APIs) and orchestration services.

"Even when faced with an extremely demanding workload with complex requirements, they will work with specialist enterprise service providers to build the infrastructure they need," according to Verizon's report. "This might include sophisticated load-balancing and acceleration, and highly resilient, ultra-high bandwidth connections between systems."

A commissioned study conducted by Forrester on behalf of Verizon in February found 55% of businesses reported that they need to invest in alignment of business and IT strategy to meet their 2015 business priorities, and 68% reported that they need to invest in cloud and software as a service (SaaS) to achieve business priorities.

Nathan Eddy is a freelance writer for InformationWeek. He has written for Popular Mechanics, Sales & Marketing Management Magazine, FierceMarkets, and CRN, among others. In 2012 he made his first documentary film, The Absent Column. He currently lives in Berlin. View Full Bio

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User Rank: Ninja
11/10/2015 | 1:56:22 PM
No surprise here
Having 88% of current cloud users say it has "reengineered" their business about like going to a McDonalds and polling how many people like burgers and fries.

If you went to the cloud, it was for a reason. And the reason isn't cost savings. Most likely you implemented some application like online banking that would change your business.

I'm still not sold on the idea for manufacturing. I can't think of reason to make my shopfloor dependent on a WAN/ISP I have no control over. Although I will admit that is only slightly worse than having a facility connected by private circuit (T1) to your inhouse servers. I've seen construction cut a T1 line and leave you down for days. For most part, a Time Warner or Verizon won't leave you down for days.

But if your servers are in same LAN as your facility, why bring the internet into the equation? Even in article above, cloud users are now working on application exceleration and bandwith throughput instead of upgrading servers. Is that really better? And then throw in the cost of needing very powerful, redundant network connections to make the cloud work, are you really saving over having your own infrastructure?

Cloud certainly doesn't eliminate all IT, someone still has to make things work at the application level. And those are your expensive, hard to find people.

But I'm certainly watching this space and thinking hard about it. We run a local SAN to implement our virtual Windows servers. I'm the only IT person at this unit but have remote help at Corp level. Our division may be sold soon, leaving me without these expert Corp specialists who know SANs. So would I be better off with that SAN in the cloud or finding a local partner to assist if I have SAN issues? That may be a decision I'm facing very soon.
User Rank: Ninja
11/9/2015 | 1:56:56 PM
I remember not that long ago there were many who were concerned about cloud security. I think a lot of those concerns have faded now, and I would agree that cloud computing is simply a way of doing business now. There's still a lot of small businesses that have not yet caught up with the trends, however.

A lot of that has to do with the fact that many smaller organizations simply don't want to spend money on IT. But it's inevitable: IT spending will be necessary for these companies at some point soon. 
2014 Next-Gen WAN Survey
2014 Next-Gen WAN Survey
While 68% say demand for WAN bandwidth will increase, just 15% are in the process of bringing new services or more capacity online now. For 26%, cost is the problem. Enter vendors from Aryaka to Cisco to Pertino, all looking to use cloud to transform how IT delivers wide-area connectivity.
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