The recent Frost & Sullivan end-user study results reveal that although there is much speculation around Cloud Computing as yet another 'vaporware', most of the companies surveyed have either initiated discussions or have already started using the technology.
Mayank Kapoor, Research Analyst at Frost & Sullivan says that, "A growing number of enterprises in Malaysia are looking to move their applications and infrastructure into the Cloud. This is primarily being driven by their increasing awareness of the advantages of using 'IT as a Service' – the lower total cost of ownership, predictable costs and the ability to scale up or down depending on business needs."
Some of the up-front benefits of cloud computing are cost-savings, on-demand usage, ubiquitous access and resource pooling along with, pay-per-use – like the utility based consumption model. The existing infrastructure in most enterprises is ridden with inefficiencies due to the low utilization rate of resources such as computing and storage. Customers have invested in excess capacity, keeping peak demand in mind, and are now plagued with higher spends than their usage levels.
The Frost & Sullivan survey conducted in Malaysia (with senior IT decision makers) indicates that close to 30 percent of enterprises use some form of cloud computing. More than 64 percent of the survey respondents believe that Cloud Computing technology in any delivery form can help businesses reduce their infrastructure cost and lower capital expenditure investment compared to traditional IT management.
With the buzz surrounding Cloud Computing, Enterprises are curious to test out these services. This is the prime reason behind the high level of IaaS and PaaS adoption in the country with most users looking for a one-time experience or using it to meet peak demands, as in the case of IaaS.
In terms of a change in Cloud Computing budget for 2011, 41 percent of respondents are likely to increase it in 2011. This is primarily because Malaysian Enterprises that currently do not have a dedicated budget are looking to assign a specific budget for the Cloud. The CXOs are the key decision makers when it comes to cloud initiatives, followed by the IT Department. Some of the key factors determining the selection of cloud provider are security & privacy standards, quality of SLAs (Service level agreements) and pricing.
The adoption rate of Cloud has improved from previous years, though there are still many businesses that are concerned about the technological investment or perceive it as yet another technology fad.
"Challenges for adopting Cloud Computing are regulatory compliance, invisibility over data storage & access, SLAs, reliability of clouds and ownership of legal liability. However, there is no such thing as 'zero' risk. Businesses need to realize that with proper planning, risks can be mitigated, " comments Kapoor.
Frost & Sullivan analysis from the survey concludes that in order to fully understand Cloud Computing, vendors and service providers need to understand that the solution is first built for the customer's business needs and it is always about the business rather than the technology. In order to drive adoption of Cloud by business owners, vendors also need to be more liberal with their trial periods to fully accommodate clients request to explore various opportunities that Cloud has to offer. Also, the SLAs must be clearly specified and move beyond availability issues to include factors such as disaster recovery and incident handling. Regular assessment by third parties will help instill customer and enterprise trust.
Cloud Computing offers significant promise for enterprises saddled with inefficient IT infrastructures. It offers the critical promise of aligning IT with business needs and creating a truly agile business environment.
"Cloud Computing is a powerful tool that can shape the businesses of tomorrow and it is no longer just hype. It's real," says Kapoor.
• Frost & Sullivan conducted this survey with 330 senior IT decision makers in Asia Pacific, 55 of which were from Malaysia. Analysis per-country was made along with the overall trend in Cloud Computing across Asia Pacific.
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