There have been numerous reports over the years on how cloud computing has developed, how businesses are taking to it, and how it is being used in the home. However, little enough research has been done to assess what vendors think about it. A new report aims to remedy that.

Produced by IT Channel Insight, The Cloud Leaders’ Report 2012 pulls together the results of a number of interviews done with some of the players that are currently shaping the cloud computing industry.

Those that were consulted for this report include: Asigra, Axcient, CA Technologies, Citrix, Dell, Google, HP, IBM, Microsoft, Rackspace, Red Hat, Salesforce, Shoretel, StorageCraft, Symantec and VMware.

In fact, just about anyone who is anyone in a computing space that Gartner estimates will be worth US$ 206 billion in spending in 2016, up 41% from current levels.

Cloud Computing Market

So what does the report say? The first thing of note is that the market is currently made up of a mix of start-ups and large vendors that are currently shifting some of their business to cloud computing. Nothing new in that, but what is surprising is that the vast majority (81%) of vendors interviewed recommended hybrid deployments consisting of a mixture of on-premises and cloud solutions. Enterprises, they say, should not move everything to the cloud.

From this, the report authors conclude that vendors see the cloud as an addition to their on-premises portfolios, rather than a replacement for it.

Another interpretation of that, however, is that the cloud has still to be really tested and until such a point as it has, it would be risky for enterprises to put everything in the cloud, a strategy that most enterprises appear to be adopting anyway. And while there are a number of advantages in moving from on-premises solutions to cloud solutions for enterprises, there are also advantages for vendors too.

By moving from selling on-premises to cloud services vendors receive a smaller recompense initially, but over the course of a contract lifetime, it is generally accepted that long term contracts with cloud vendors cost more than the price of on-premises applications. They also offer the distinct advantage of offering guaranteed revenue over the lifetime of a contract with predictable revenue streams that make financial projections a lot easier.

A final advantage for vendors is that the barrier for entry is much lower. By that it means that the financial entry point for clients to buy into cloud products is much lower than it is for on-premises vendors, giving the vendor access to a much wider customer base.

Cloud Computing Today

According to the report, we are at a key point in the history of cloud computing. There are there main shifts in business and cloud computing that are dovetailing at the moment:

  • Business are changing in ways that fit well with cloud computing
  • Cloud computing, while still developing, has reached maturity
  • Cloud computing is now driving business innovation

Vendors are using the functional, financial and operational and efficiency advantages to see into where businesses are the moment, and shaping them to target particular needs of clients. In particular, they are enabling businesses to become leaner by: