Cloud Computing Gaining Traction in Both Enterprise and Small Business

Both enterprise and smaller businesses are adopting cloud computing apps and services at a higher levels, a couple of new studies suggest. The number of enterprises turning to cloud computing to revamp existing business models will more than double in the next three years, a new study by IBM predicts.

Also, nearly half of the respondents in a recent CIO Economic Impact survey indicated they evaluate cloud options first, over traditional IT approaches, before making any new IT investments.

The survey revealed that while a higher percentage of large organizations (those with revenues
more than $20 billion) are experimenting with cloud,  67 percent of companies with revenues less than $1 billion and 76 percent of those with revenues between $1billiion and 20 billion have adopted cloud at some level.

Those sorts of developments are why some believe the global cloud computing market will
grow 22 percent annually to $241 billion by 2020. That’s a market big enough to be interesting to lots of firms.

The Economist Intelligence Unit surveyed more than 500 business and technology executives worldwide as part of the study.

While 16 percent of the executives surveyed indicate they are already using cloud capabilities, by 2015 35 percent intend to use it to transform their business models. And operating efficiencies will not be driving the move.

While a little more than half of the respondents indicated "improving organizational efficiency" as a top business challenge today, only 31 percent anticipate it will be a top challenge in three years.

Instead the study indicates that their focus is shifting to growth and competitive initiatives. Some 62 percent of survey respondents said increased collaboration with external partners is a key objective for adopting cloud, while
57 percent cited competitive cost advantages through vertical integration as a major motivation.

About 56 percent said the ability to create new delivery channels and markets was an important objective for their cloud initiatives.
Also, small and medium businesses that currently use cloud applications plan to add an average of three new cloud business applications in 2012, according to a survey sponsored by Dell Cloud Business Applications and conducted by Techaisle.

About 70 percent of cloud services as “software as a service” apps and usage of those apps has doubled over the last two years, from an average of two apps to four, with an expectation that a typical user will be running seven apps by the end of 2012.

Customer relationship management has the highest penetration of any cloud application at up to 55 percent, an increase of up to 34 percent from 2010. That is up from 34 percent usage in 2010.

But several other applications were not far behind. Some 54 percent of respondents use cloud-based project management apps. About 49 percent reported using business analytics on a cloud basis.

Some 48 percent use a sales automation tool, the same percentage reporting use of a cloud-based payroll app. Some 43 percent

Dell notes that cloud delivery has lowered costs enough that many smaller organizations now can afford to use CRM apps. Of respondents using CRM, about 25 percent report they are likely to add business intelligence and marketing automation apps within the next 12 months.

Perhaps 50 percent of respondents noted significant challenges in keeping track of different service level agreements, while up to 48 percent complained that explaining their business to each vendor was tedious and time consuming.

As many as 74 percent of respondents use in-house information technology staff to integrate new cloud applications with on-premise technology.

On average, respondents believe they have experienced up to a 38 percent improvement in operational efficiency due to reduced manual processes and up to a 39 percent improvement in employee productivity due to automation of tasks and information.

The survey was conducted with 400 SMBs in the United States that are using at least one cloud-based business application. The survey was conducted online in December 2011 and included both IT and business decision makers.