Customer Cloud Adoption: From Development

A Custom Technology Adoption Profile Commissioned By Dell
Customer Cloud Adoption: From Development To The Data
Center
September 2013
Introduction
Where are customers today on their cloud journeys, and where are they headed? Dell commissioned Forrester
Consulting, in this Technology Adoption Profile, to examine customers’ drivers, concerns, and plans for cloud
infrastructure computing; to profile customers’ expectations of cloud service providers; and to chart customers’
cloud road maps in terms of public, private, and hybrid cloud computing and multicloud management.
Public cloud solutions, particularly commercial software-as-a-service products, have raised users’ awareness and
expectations of their IT systems for increased adaptability, speed, and variable-cost alignment. And IT
organizations are responding in kind. As early kinks and trust factors in cloud computing solutions — having
largely to do with architecture, security, and management — get worked out, customers’ adoption and utilization of
cloud computing as a strategic IT infrastructure resource continue to gain momentum. While the majority of earlyadopter customers are expanding their initial cloud infrastructures, even more are planning net new cloud
investments.
And as technology is maturing, so is customers’ understanding of and planning for cloud. The vast majority of
customers feel that they have a strong grasp of cloud computing — more than three-quarters of customers say that
they have a clear understanding of the value of cloud computing to their businesses and of where cloud is being
utilized in their organizations today (see Figure 1).
Figure 1
Respondents Have A Solid Understanding Of Cloud Computing
Base: 103 IT decision-makers in North America and Europe
Source: A commissioned study conducted by Forrester Consulting on behalf of Dell, June 2013
Forrester Consulting
Customer Cloud Adoption: From Development To The Data Center
Private Cloud Dominates Today, But Multicloud Environments Are The Future
Customers favor internal private clouds today. The biggest cloud infrastructure form factor being adopted by
customers is private cloud: More customers have implemented internal private clouds (41%) than have
implemented hosted private cloud and public cloud infrastructure solutions (30% and 21%, respectively). It’s
important to keep in mind that that these numbers reflect IT decision-makers’ awareness, and don’t include the
sizable number of cloud decisions and purchases coming directly from the business, outside of the IT organization’s
purview (i.e., shadow IT). The numbers behind customers’ cloud infrastructure growth plans also favor internal
private clouds, although not by much — just slightly more customers are expanding, piloting, or planning (in the
next 12 months) to implement net new internal private cloud deployments (39%) than hosted private cloud (30%),
with public cloud solutions garnering a bit less attention (22%) (see Figure 2). Why the skew toward private cloud?
• Customers are still in an experimentation stage. Although cloud infrastructure adoption is burgeoning,
most customers still consider their cloud deployments to be serving as test beds. As long as IT organizations
are getting their cloud legs, they want to maintain control over as many management variables as they can.
• Customers can leverage their IT operations management skills. One thing most customers’ IT
organizations are adept at is operations management. With internal private clouds, they can continue to
leverage that expertise. Even if customers’ IT organizations are resource-constrained, they can (and do)
deploy internal private clouds, taking advantage of cloud providers’ management tools and managed services.
• Security remains an issue. Security concerns around public cloud continue to factor into customers’ cloud
thinking. Although security concerns are abating, fewer than half of customers feel that their data is more
secure in the cloud than in in-house systems (i.e., internal private clouds).1
While private cloud models rule the roost today, customers anticipate that they will ultimately be operating hybrid
clouds in a multicloud environment — 62% of organizations Forrester surveyed on behalf of Dell expect to adopt
more than one type of cloud platform (see Figure 5).
Figure 2
All Cloud Deployment Forms Are Growing, But The Internal Private Cloud Footprint Is The Largest
Base: 711 North American and European IT decision-makers at firms with 500+ employees
Source: Forrsights Hardware Survey, Q3 2013, Forrester Research, Inc.
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Customer Cloud Adoption: From Development To The Data Center
Going Cloud: Many Drivers, Fewer Concerns, And More Realized Value
Year over year, cloud service providers and tech vendors are mitigating customers’ concerns, and customers are
seeing more value from cloud computing — to the point now where customers’ realized benefits far outweigh their
concerns. But of their remaining concerns, security remains dominant (see Figure 3). Among hesitations to
implement cloud, customers cite security concerns (43%) as their No. 1 concern. Other concerns include:
• Vendor lock-in. Concerns over vendor lock-in reflect customers’ desire for a variety of choices —
particularly if the initially selected vendor winds up limiting the customer’s cloud road map (e.g., from
private cloud to hybrid multicloud).
• Compliance requirements. Compliance issues remain relatively high, particularly for hosted private cloud
and public cloud, for customers in verticals with stringent data management and auditing requirements (e.g.,
healthcare) and for those in countries with regulatory environments that dictate customer data privacy and
cross-border data movement. For example, financial services companies rate compliance as their No. 2
concern (23% cite unmet compliance requirements as a concern) — unaware of the fact that a few more
advanced cloud vendors/providers have accounted for compliance requirements in designing their cloud
offerings.
• Total cost of ownership (TCO). Some customers believe that their total costs of maintaining a traditional
data center are less than those represented by integrating cloud. However, ironically, those customers
considering and having implemented cloud solutions cite cost savings as a key expectation and benefit,
respectively (see Figure 4 and see Figure 5).
Figure 3
Concerns With Cloud
Base: 711 North American and European IT decision-makers at firms with 500+ employees
(multiple responses accepted)
Source: Forrsights Hardware Survey, Q3 2013, Forrester Research, Inc.
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Forrester Consulting
Customer Cloud Adoption: From Development To The Data Center
Customers have clear value expectations when embarking on the cloud journey (see Figure 4). Topping their list is
improved IT systems manageability (82% of customers cited it as very important or important), as well as improved
disaster recovery and business continuity (78%), capacity and scalability immediacy (on demand) (78%), and lower
TCO (77%).
The bottom line? Value expectations are being realized (see Figure 5). In particular, customers have found in their
cloud solutions:
• The scalability to operate their businesses more effectively. Seventy-two percent of customers identify with
realizing greater IT systems scalability.
• Cost savings. Two-thirds of customers are able to quantify cost savings directly associated with their cloud
platform investments. Applied appropriately, cloud computing is driving lower TCO for these firms.
• An innovation effect. Sixty-four percent of customers credit cloud computing with helping them innovate
and reach new markets, due to the adaptability afforded to IT organizations for reacting more quickly to user
demands and market opportunities.
Figure 4
Drivers Of Cloud Adoption
Base: 555 North American and European IT decision-makers at firms with 500+ employees who are planning to or have already
implemented IaaS
Source: Forrsights Hardware Survey, Q3 2013, Forrester Research, Inc.
Note: “Don’t know” responses were not included.
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Customer Cloud Adoption: From Development To The Data Center
Looking For Cloud Provider Fit
Customers want one cloud vendor/service provider but expect to have to work with many. Seventy-one percent of
customers would prefer to have one vendor to work with on their infrastructure from end to end. This implies that
tech vendors whose portfolios encompass data center, private cloud, and public cloud solutions have an edge. But a
majority of customers also expect to adopt multiple cloud platforms, expecting that one platform will not meet all
of their needs. And thus a similar number say that they will leverage more than one cloud vendor — despite their
desire to single-source their infrastructure solutions, involving both internal data center and cloud-provisioned
infrastructure (see Figure 5).
Figure 5
Benefits Of Cloud
Base: 103 IT decision-makers in North America and Europe
Source: A commissioned study conducted by Forrester Consulting on behalf of Dell, June, 2013
Whether customers decide (or have the luxury) to go with one vendor/service provider or several, customers expect
them to meet a high operations performance bar. They essentially use their own internal, honed IT operations
capabilities as a gauge to scrutinize cloud service providers. Besides price, which is always an important provider
selection criterion, customers look discerningly for cloud solutions with proven capabilities in (see Figure 6):
• Security. Two-thirds of customers call out cloud security as one of their top five criteria, which is reflective of
the main concern of those customers hesitant to cloud.
• Reliability. Reliability — uptime and high performance — ranks No. 2 in customers’ cloud service provider
wish list. Again, just as their own internal IT operations service levels are expected to meet certain metrics, so
are those of external cloud service providers. On a related note, customers also consider cloud service
providers’ service-level agreements (i.e., what type of remuneration they can get if the service provider fails to
meet service-level guarantees).
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Forrester Consulting
Customer Cloud Adoption: From Development To The Data Center
• Vendor/provider stability. Customers are investing in cloud service solutions knowing that they are a
critical element to their data center infrastructure and that they represent long-term
investments/relationships. Thus, customers are keen to engage with service providers with a proven track
record and long-term viability.
Figure 6
Vendor/Service Provider Expectations
Base: 103 IT decision-makers in North America and Europe
Source: A commissioned study conducted by Forrester Consulting on behalf of Dell, June 2013
Tooling For Cloud Management
Customers have very clear positions for management tooling on their cloud road maps. Nearly all customers
acknowledge the importance of cloud management tools as a part of their cloud solution. And whether those tools
are deployed on-premises or on-demand, the more integrated the tool set, the better (see Figure 7):
• Customers want integrated cloud management . . . Customers show strong, near-equal preference for
internal administration and subscription-based cloud management platforms (CMPs). More than 80% either
are considering or strongly prefer a fully integrated set of cloud management tools.
• . . . in order to reduce complexity. Preference drops considerably for piecemeal solutions and independent
cloud service brokers. With respect to managing their cloud environments, most customers believe that they
will receive a higher-quality experience if they avoid piecing together multiple software components to form a
management solution. Customers aim to reduce complexity with cloud services and believe that cloud
vendors/service providers that concentrate on offering a complete suite will best meet their cloud
management requirements.
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Customer Cloud Adoption: From Development To The Data Center
Figure 7
Cloud Management Preferences
Base: 103 IT decision-makers in North America and Europe
Source: A commissioned study conducted by Forrester Consulting on behalf of Dell, June 2013
Conclusions
Customers see their cloud infrastructure investments as paying off, in terms of not only cost savings but also
strategic business advantages — i.e., offering the elastic scalability to quickly respond to unanticipated IT operations
needs and the adaptability to quickly take advantage of innovation opportunities. IT customers are expanding their
cloud lenses beyond development and testing to more production systems, advancing their cloud road map
requirements, and scrutinizing the capabilities of cloud vendors/service providers and their offerings to enable and
support those increasingly rigorous requirements. For example, customers are demanding more from their
providers in the form of robust security and warranties; regulatory compliance functionality; and end-to-end IT
infrastructure solutions portfolio and services support, from internal data centers to hybrid multicloud
environments and from professional services for assessment and migration to management tooling.
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Customer Cloud Adoption: From Development To The Data Center
Methodology
This Technology Adoption Profile was commissioned by Dell. To create this profile, Forrester leveraged its
Forrsights Hardware Survey, Q3 2012, Forrester Research, Inc. Forrester Consulting supplemented this data with
custom survey questions asked of 103 IT decision-makers at mid-market and enterprise-size organizations (500+
employees) in the US, Canada, the UK, France, and Germany. Respondents were from organizations that had
implemented IaaS solutions and were familiar with the cloud services decision-making process. Survey respondents
were asked survey questions related to current IaaS use and needs as well as their plans to manage their cloud
environment. The auxiliary custom survey was conducted in June 2013. For more information on Forrester’s data
panel and Tech Industry Consulting services, visit www.forrester.com.
Endnotes
1
Forty-seven percent of respondents (103 IT decision-makers in North America and Europe) in the custom survey
agreed to the following statement: “My firm feels our data is more secure in the cloud than on a system that we
could afford to build in-house.” Source: A commissioned study conducted by Forrester Consulting on behalf of
Dell, June 2013.
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