7 Reasons for Mid Market Cloud AdoptionAuthor : Karan Kirpalani Date : October 10,2014 Category : Cloud Computing
Mid-market organizations today are increasingly adopting cloud technologies to stay ahead of the competition. What could have led to an exponential increase in embracing cloud technology by mid-market organizations?
According to research firm IDC, the cloud computing trend is driven by three major factors – complexity, speed and scale. The research firm predicts cloud computing to be USD 117 billion industry by 2017, a shoot up from USD 47.4 billion in 2013. In the next two to three years, IDC findings reveal that 3 in 10 midsize firms will implement public cloud solutions and 2 in 10 will opt for private cloud solutions. The SMB investment in cloud solutions is expected to grow at a rate of 20 percent in the next five years.
Also explosion in the mobile sphere has ramped up the need for cloud computing services. The major models enabling seamless integration and functioning of cloud computing services are – Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS). The SaaS holds largest share of cloud computing spending, which approximates to two-thirds of the total spends increasing annually at 18 percent every year.
Why Should Mid-Market Companies Adopt Cloud?
- Cloud technologies boost the speed at which IT projects get implemented, thus saving on costs, time and the line of business resources deployed on a particular project. Typical cloud solutions can be customized to customer requirements within a matter of days or weeks. Sometimes impressive payback solutions can be created within a short time span with little or no impact on internal resources.
- The cloud solutions are typically paid on monthly or “pay as you go” plan, which is entirely dependent on your consumption patterns and preferences. With a much smaller resource commitment, the cloud solutions keep strategic investment budgets really low with reduced dependency on availability of infrastructure and support resources.
- Most cloud service providers offer 99.9% uptime with clearly specified time for windows updates and system maintenance. They also clearly state the financial penalties imposed in case of failure of any of these commitments, which further helps the end user derive returns on investments in the cloud.
- Customers on cloud can dramatically reduce their internal support requirements and focus on more strategic aspects of the business. Internal resources no longer need to be assigned to install patches, modifying systems, planning and installing upgrades for ever-changing business needs. It is the cloud service provider’s responsibility once mid-market organizations migrate to the cloud.
- Cloud computing at its core is not about moving capital expense (CAPEX) to an operating expense. Leveraging the benefits on cloud can offer near-term payback, improve organization’s agility and reduce the need for capital budget dollars.
- Cloud technology helps improve business agility by quickly providing for new applications using PaaS development platform integrated with IaaS.
- Cloud facilitates metered use of expensive resources and provide for increased reliability to enable quick recovery from unplanned outages. The cloud and virtualization platforms today are endowed with capabilities for fault tolerance, live migration, high availability and distributed resource scheduling.
Types Of Cloud Environments: Public, Private And Hybrid
The public cloud seems to generate maximum interest among the SMBs for it facilitates economies of scale with easily implementable solutions. However, for growing companies private cloud environments are preferred choices for it helps them acquire complete control of their data.
For example, a midsize bank with regulatory constraints can work well in a private cloud environment, which will also secure and safeguard customer information. However, at times a hybrid approach of public and private cloud environment is the feasible option for few companies as the scale of cloud implementation will be guided by capabilities, budgets and requirements.
Getting into the depth of each of these three different cloud environments, mid-market organizations will now be able to understand their requirements and choose an appropriate cloud business model to support growth initiatives.
Public Cloud Model
Most typically chosen, easily adopted and implemented by most mid-sized organizations when they foray into cloud. These mid-sized companies choose public cloud computing environment over the private as resources are available in plenty to a large set of users who share the same capabilities on the internet. Automatic upgrades are made available to the entire user base and basic support is provided as a part of the company’s subscription. Public clouds are managed by a third-party service provider with servers, network storage and applications shared among subscribers. The free public cloud offerings usually supported by ad revenues are also available.
Private Cloud Model
The private cloud computing is specifically designed for single enterprise with multiple sites and data centers. For example, Google and Salesforce could improve their delivery performance when private cloud was applied to facilitate better coordinate of data centers. While private cloud users do not enjoy the scale and reach as public cloud environments, but enhanced security is assured to every user on the cloud. The IT chores of updating company software and adding new users can be well accomplished by the internal team on a private cloud environment.
Hybrid Cloud Approach
Practically, growing companies opt for hybrid cloud computing model, such that they can choose and allow different levels of control over company data. This environment facilitates phased deployment, starting from basics and scaling up the rung of requirements to offer value packed services. With enhanced flexibility and customization options, the hybrid cloud model helps standardization of IT procedures across the length and breadth of a mid-size organization with reduced costs and faster deployment. Hybrid clouds are owned and managed by both the internal IT staff and third-party service providers.
How To Select Cloud Environments?
When it comes to choosing an appropriate cloud environment for mid-sized business, the most important step is to understand and analyze your business requirements. Let’s say for sentiment analysis and corporate performance management, public cloud is the undisputable choice. However, if you’re upgrading company financials with resources and capabilities being more of an issue, then upgrading to private cloud is the best option.
When workload is critical in nature to businesses, they can also opt for a hybrid cloud model to exert better control over solution customization, optimization of resources, reduce costs, save time and enable configuration upgrades better. Business significance is of paramount importance when deciding on the best suited cloud alternative.
Also in cases, wherein data needs to be highly secured and is confidential in nature, then additional safeguards can be added on the private cloud platform. The public cloud solutions can also help mid-sized businesses with the transaction volumes especially when they are high during specific times of the year. A most relevant example is the e-commerce requirements that scale up during the holiday season. The public cloud solutions enable cost-effective scale up during peak periods of the businesses.
While cloud computing integration with IT might seem like a compelling way for mid-size businesses to reduce costs, acquire flexibility and agility to thrive in the competitive business space. For smooth functioning, it is required that you determine the cloud environment alternative that best suits your business demands and requirements, and is in sync with company’s strategy to manage workload, optimize performance and enhance security needs.
Cloud technologies provide mid-sized business with the much-needed flexibility, agility and speed to sustain the growth momentum during tough economic times. Reduced cost advantage offered by cloud, gives businesses a competitive edge and unprecedented ability to seize new market opportunities, diversify and foray into new markets.
Karan represents a new generation of Product Marketing Managers that can cover core product development & management activities as well as product marketing activities. To his customers & colleagues, he is the Go-to-guy for consultations.