Cloud-based services revenues in two years are expected to comprise nearly twice its current share of provider revenue, according to the 2012 Cloud Providers Global Survey from KPMG International.
The study notes that business users’ migration to cloud in the coming two years will be increasingly for data-intensive applications, such as business and data analytics, content management, customer care, and operations and manufacturing, say providers in the survey. They expect the shift to occur despite users’ ongoing concerns over loss of control and data security, which are in addition to the providers’ challenges of proving savings and the business case.
Nearly six out of 10 providers say cost reduction is still the chief reason most business users migrate to cloud, yet almost four out of 10 providers say proving cost savings is their biggest challenge. The challenge is further complicated by the fact that only 39% of providers believe that users have realistic expectations for cost savings in the migration to cloud, while 19% believe users do not.
Addressing the expectations gap on cost savings is just one of the interrelated customer challenges emerging as users embrace cloud for more strategic reasons. Providers see the top three challenges as: showing stronger evidence of cost savings (38%), devising usage-driven pricing (31%) and helping clients develop realistic business cases for switching to cloud (27%).
“While providers are seeing the challenges of a maturing, yet still relatively young, market, we are at a pivotal point in the evolution of the cloud ecosystem as users become more comfortable with a variety of cloud applications,” said Gary Matuszak, partner, global chair and US leader for KPMG’s Technology, Media and Telecommunications practice.
“Leading cloud providers know they must evolve to provide a new level of scale, capacity, and capability. The anticipated migration of core systems and critical infrastructure to cloud in the next two years will be complex undertakings; users will be requiring, if not demanding, strategic direction and guidance from providers across a broad range of areas,” added Tom Lamoureux, global advisory leader, KPMG Technology sector.
“The lines are blurring across the various types of cloud services; users need and want to understand cloud’s value and immense power much better than they do.”
