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Turn of the Tide: Interview with Tyson Hartman

 

I studied numerous surveys, reports and white papers over the course of writing my book. One really stood out from the pack, and I want to share its findings with you.

Published in June 2011 by Avanade, its title is “Global Survey: Has Cloud Computing Matured?” and the content is based on a March 2011 survey of 573 C-level executives, business unit leaders and IT decision-makers in 18 countries.

 

Avanade, as many of you know, was launched as a joint venture in 2000 by Accenture and Microsoft. It provides technology services across multiple sectors including telecommunications, financial services, public sector, multi-national retailing, manufacturing and entertainment.

The report is the third in an annual series, and it reveals some interesting trends in the way technology executives look at the cloud. Here are some nuggets from the report:

Looking to the year ahead, 55 percent of companies report their IT budgets will grow, and for the first time in several years, companies are able to shift from a “do more with less” to a “do more with more” IT operation. Companies are adopting new technologies to deliver new services and in some cases, to cut ongoing costs with more efficient systems.

When asked about their primary IT focus areas for the next 12 months, cloud computing, security, and IT consolidation topped the charts. Of the 573 business leaders in 18 countries, 60 percent report cloud computing, 58 percent report security, and 31 percent report IT consolidation as the three highest priorities.

While 60 percent of companies worldwide said cloud computing is a top IT priority for the next year, the sentiment is even higher in the C-suite with three out of four C-level executives reporting cloud computing as top of mind.

According to the survey, 74 percent of enterprises are using some form of cloud services. This represents a 25 percent growth since Avanade’s September 2009 survey. Further, the gap between cloud adopters and those who have no plans to implement cloud computing has shrunk dramatically – 54 percent since 2009. For the organizations that have yet to implement cloud, three-quarters say it’s on the horizon.

In terms of their overall IT budget, 74 percent report they have allocated up to 30 percent to cloud computing annually. For 10 percent of companies, this means spending $2 million or more on cloud computing each year.  Companies are investing in their employees too. In fact, most companies report their IT spend on cloud services is between $100 and $499 per user (38 percent).

In 2011, additional investments in cloud services were matched by significant spending on security and training for new cloud deployments.

Tyson Hartman is Avanade’s Chief Technology Officer. He’s responsible for Avanade’s technology vision, solutions and R&D investments. As CTO, he leads the incubation and engineering teams that deliver differentiated solutions across the complete enterprise IT lifecycle. I spoke with Tyson about the survey and its implications. Here’s a summary of his observations:

There has been a significant turn of the tide. We’re definitely past the ‘what and if’ phase and getting into the ‘where and when’ phase. That’s especially true of SaaS, where people can perceive the value of moving email, collaboration and CRM services into the cloud. With SaaS, you get a predictable cost advantage. You know exactly how much per seat your tools are costing you. That’s an attractive combination – speed to market and predictable costs.

Avanade’s research also shows that a strong preference is emerging for private cloud deployments, especially in areas of competitive differentiation. Here’s what the report says:

Previously, companies relied on third-party public cloud providers for the majority of their cloud infrastructure. Yet today, nearly half of all companies (43 percent) report they utilize private clouds. Further, another 34 percent say they will begin to do so in the next 12 months.

Overall, 63 percent say they are ready for private cloud and the majority says it plays a role in their cloud strategy. In the C-suite, perceptions are higher with more than 70 percent saying their company is ready for private clouds. In preparation for this, companies are investing in everything from security (48 percent) to their networks (47 percent) and staff (35 percent).

While opinions vary, most see private clouds as more secure and easier to control.

I think that many of us had a gut feeling about this, and it’s great to see the survey numbers supporting our instinctive sense that many companies will see private clouds as a better strategic fit than public clouds – at least for now.

 

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