Verizon recently released its State of the Market: Enterprise Cloud 2016 report, detailing enterprise cloud adoption and trends. Here are the highlights.
For years there has been talk of the growing spread of the cloud in the enterprise, but now it's reached a tipping point.
Early on, organizations only trusted the cloud with generic, non-crucial workloads. However, more and more companies are trusting the cloud with their key workloads. According to Verizon's recently released State of the Market: Enterprise Cloud 2016 report, 87% of enterprises are trusting the cloud with at least one mission critical workloads, up from the 60% in 2013 and 71% in 2014.
In addition to the growth of cloud used for critical workloads, it is growing for general use as well. Of those surveyed for the report, 84% said their cloud use had increased over the past year. Also, around half of the companies said they'll be using cloud for 75% of their workloads, or more, by 2018.
Going even further, the report said: "In just a couple of years, we believe that over half of all workloads--across organizations of all kinds--will be running in the cloud."
"These statistics shows the change in perception amongst enterprise as a few years ago, it was considered risky to transform businesses via cloud, whereas now where it tends to be riskier for people who do nothing because they end up getting left behind," said Ryan Shuttleworth, cloud CTO for Verizon Enterprise Solutions.
So, what did it take to get to this point of trust between the cloud and the enterprise? For starters, attitudes around cloud security have begun to change. In fact, some have even argued that cloud-based security offerings trump their on-premise counterparts.
Respondents for this report seem to agree: 80% of those surveyed said they believed their cloud environment was as secure, or more secure than their on premise infrastructure.
Another shift has been in perceived reliability of the clouds. According to the report, 87% said that the cloud was as reliable and available as on-premise offerings, if not more so.
Now that it's gotten to this point, the question becomes why these enterprises have moved their mission critical workloads to the cloud and what are they hoping to accomplish. Responses broke down the following way:
- Improving responsiveness to business needs - 88%
- Improving operations - 65%
- Saving money - 41%
- Keeping pace/responding to competition - 35%
- Addressing lack of internal skills - 29%
- Simplifying regulatory compliance - 18%
- Improving security - 18%
The top four responses are fairly common reasons for moving to the cloud, but the bottom three are significantly more interesting. "Addressing lack of internal skills" means that enterprises are looking to cloud providers, or private cloud capabilities, to fill the gaps in their workforce. "Simplifying regulatory compliance" and "Improving security" are equally as important because they point to a shift taking place in that, for some organizations, the cloud is eliminating more work than it is creating.
In terms of how they're implementing the cloud, 53% use between two and four cloud providers. Additionally, 69% said they are reengineering their business processes with the help of cloud technology.
Private cloud is becoming increasingly more common. The report cited lower barriers to entry and a lower cost difference as the main reason why. More respondents said they're currently using private rather than public, and a larger number have firm plans to implement private than public.
"In the past, the approach taken by many companies roughly followed a similar model: public for non-sensitive workloads; private cloud for more sensitive stuff; and traditional on-premises for difficult-to-move and highly sensitive workloads. Because the cost of private cloud is falling, it now makes sense for many companies to move more of their workloads to private cloud," the report said.
However, the report author did note that Verizon believes there will always be a need for public cloud, especially when elasticity is an issue.
Hybrid cloud seems to be growing, too. About half of the respondents said they either now use hybrid cloud or can readily move the workloads between multiple clouds. The Verizon report also cited a recent survey by cloud financial management company Cloud Cruiser, where 75% of companies said that they "planned to include hybrid cloud as part of their strategy."
Cloud users were broken down into three categories: Skeptics, natives, and pragmatists. Skeptics are those who are not fully convinced of the value the cloud holds for their industry. Natives are those who are considered cloud-first, or cloud-only businesses. In between those extremes are the pragmatists--organizations that take a more measured approach to their cloud strategy.
This growth in cloud means that the playing field is leveled. Only 16% of respondents said the cloud is a "significant advantage," which is a number down from 30% who said the same thing last year. However, 77% believed it's at least a "competitive advantage," but it seems cloud itself is getting closer and closer to becoming table stakes in the enterprise.
And, as more companies fully embrace the cloud, Shuttleworth said, the emphasis on the network will be greater.
"Connectivity is critical to the success of cloud projects," Shuttleworth said. "Some organizations have already switched to dedicated cloud connection services but, through 2015, at least 50% of cloud deployments will suffer from business-impacting performance issues, requiring extensive network redesign to address them."
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