Verizon: Cloud Computing No Longer A Differentiator

Hybrid Cloud: 7 Ways It's The Best Of Both Worlds

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.

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.