Top investment bank predicts drive toward the clouds is inevitable
A recent report by Goldman Sachs detailing their predictions in their technology and software report reaffirms what IT analyst such as Gartner have been saying for a while, the shift toward on -demand IT cloud services is now inevitable.
The report asserted that the recent economic downturn has lead to a substantial increase in the adoption of software - as - a - service or cloud based services and applications, especially amongst the SMB market.
The report indicated that SMB’s are particularly being drawn to adopting cloud technology as they are forced to look for cheaper sources for business critical applications.
Forty percent of respondents to the survey indicated that they were more likely to adopt a SaaS solution in times of a weak economic climate, chiefly due to the cost saving benefits available.
The report also found:
- An 'SaaS first' policy is being enacted in the majority of small and midsize businesses. Goldman's survey highlights that 58 percent of respondents always consider an SaaS option when making an application purchase decision. At total of 39 percent prefer an SaaS option, if available.
- Web conferencing and sales force automation continue to rank as the most utilized SaaS applications; accounting and billing shows significant improvement, underscoring broad acceptance in all application areas.
- Accounting and billing, call centre automation, and eRecruiting were the largest gainers, with 20 percent, 18 percent, and 17 percent increases, respectively, from April 2009.
- Data warehousing, supply chain management, and product life cycle management require more customization, or are more embedded within the core of a company than cloud applications. They are also utilized by a smaller group of individuals, which could impact the time to, or volume of, deployments.
- Amazon.com is used by 67 percent of the survey respondents. It is clearly the out-in-front leader, despite being a 'newcomer' to enterprise IT. For internal clouds, VMware's leadership remains pronounced, with 83 percent of respondents using its virtualization technology.
- Platform-as-a-service layers are gaining momentum, dominated by Amazon's Elastic Compute Cloud, or EC2, service, with 77 percent of respondents choosing EC2 as a preferred partner, well ahead of Google
- Forty percent of respondents indicated that they would be more likely to use SaaS solutions in a weaker economy, due to perceived total cost of ownership (TCO) benefits
Most people with a vested interest in technology would agree that the cloud phenomenon will continue to grow at a exponential rate. What will be interesting is the perceived future migration of companies from public cloud solutions, to private ones which walk the thin line between the corporate firewall and the internet.
Source Goldman Sachs - “Techtonics: Unstoppable shift toward SaaS continues”
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