Cloud computing has become too popular a term for its own good. As Oracle chief Larry Ellison pointed out recently, so many tech marketers are using the term "cloud computing" in so many contexts that it can almost mean anything-and thus often means nothing. Still, a new CIO survey of IT and business leaders shows that Ellison's dismissal of cloud as a disruptive force in the technology industry is premature. Among our survey respondents, 58 percent say cloud computing will cause a radical shift in IT and 47 percent say they're already using it or actively researching it.
Just 18 percent of our survey respondents call cloud computing a "passing fad."
CIO surveyed 173 IT and business leaders in August, 2008 to get first-hand feedback on what enterprises really think about cloud computing, and how, when and why they plan to deploy it in their enterprises. (Among our respondents, 54 percent are the head of IT at their company or business unit; 74 percent work at companies headquartered in the United States.)
For the purposes of the survey, we used a broad definition of cloud computing from market research firm Gartner: "a style of computing where massively scalable IT-related capabilities are provided 'as a service' using Internet technologies to multiple external customers". Cloud computing offerings are often described in terms such as "on-demand services", "cloud services", "Software-as-a-Service (SaaS)", etc."
One sentiment came through loud and clear in our survey: IT wants the flexibility and cost savings that cloud computing promises-the same kind of flexibility you've won from virtualization, which is a key enabling technology for the cloud. But you will not rush with regards to implementing use of the cloud. 54 percent of our respondents say that cloud computing is an evolving concept that will take years to mature. That's right in line with what CIOs told us earlier this year in our look at early cloud adopters.
Unsurprisingly, the number one factor stopping IT leaders from tapping into the cloud right away is security worries. A whopping 59 percent of our survey respondents say vendors have not adequately addressed security concerns related to on-demand offerings.
Read on for the details on what you and your peers say about cloud computing and how you are using it or planning to do so.
Cloud Computing: No Passing Fad
As David Cearley recently commented to attendees at Gartner's Symposium ITxpo, "You can't swing a dead cat without hitting somebody that's talking about cloud computing these days." The hype level has been extreme, and IT pros know it. Many of you say current offerings are still not quite baked or appealing enough to roll out in production environments.
The Cloud: Your View
| 58% |
| 54% |
| 36% |
| 18% |
But you have not written off cloud computing. More than half of you believe cloud computing will radically change the way enterprise IT looks in a few years.
And research firm IDC (a sister company to CXO Media) believes the current U.S. economic woes will only drive more enterprises to consider and adopt cloud offerings. IDC predicts that spending on IT cloud services will hit US$42 billion by 2012. "The cloud model offers a much cheaper way for businesses to acquire and use IT-in an economic downturn, the appeal of that cost advantage will be greatly magnified," noted Frank Gens, senior VP and chief analyst at IDC.
Still, some of you refuse to even think of cloud computing as a technology, per se. "We view it as another sourcing option," wrote one respondent to our survey.
Is Cloud Computing On Your Organization's Tech Roadmap?
| 30% |
| 29% |
| 17% |
| 10% |
| 5% |
| 5% |
| 2% |
A big question about cloud computing: When will IT departments stop talking about it and start actually using it? According to our survey results, IT's comfort with using cloud options in the near term is split. Almost half of you (47 percent) say you're either currently using or implementing or actively researching cloud options.
But a notable 29 percent say you have not placed cloud computing on your technology roadmap yet.
And breaking down these responses by those people who say they head IT in their company reveals more skepticism among IT chiefs than IT staffers: 38 percent of respondents calling themselves IT heads say cloud computing is not on their technology roadmap.
Consider this survey respondent's verbatim comment as to why cloud is not on his roadmap: "We're waiting for reality to strike, vendor solutions/pricing to mature and the hype to be replaced by honest to goodness experience." The lack of case studies and customer references is a real stumbling block now, according to our survey respondents.
What You Hope to Gain From the Cloud
What's even more precious to IT than cost savings? Agility. The big win with virtualization, to date, has been the ability to deliver to the business on IT requests in a lightning fast way, as compared to the old one-app-one-server days. Virtualization has helped many IT departments change from "no" people to "yes" people.
Primary Reasons You're Using or Plan to Use Cloud
| 50% |
| 38% |
| 35% |
| 28% |
| 19% |
| 16% |
| 11% |
| 10% |
| 5% |
Similarly, you already see the ability to deliver more flexibility to the business via cloud offerings: In fact, you named this as your top desire from cloud computing, followed by reduced hardware and staffing costs.
Cloud computing "allows the IT organization to focus on differentiating IT capabilities and not on infrastructure," one respondent to our survey wrote, explaining why he thinks the cloud will change his IT department-and his company. "It also allows the business to pursue an opportunity that has unclear ROI without significant capital expenditures on infrastructure."
What You're Already Doing in the Cloud
Cloud computing offerings that fall under what most people think of as software on demand or SaaS, in the style of Salesforce.com, have been around for years now.
How Is Your Organization Currently Using Cloud Offerings
| 51% |
| 37% |
| 24% |
| 19% |
| 8% |
Thus some IT departments are not only comfortable with the cloud but also banking on it for operational savings and flexibility. Not surprisingly, SaaS offerings are the top way you're already using the cloud, followed by storage on demand. Only 19 percent of respondents say they're tapping into extra computing power on demand right now, though that's perhaps the most exciting flavor of cloud computing for the future.
Clearly, the size of your enterprise is a factor with regards to your comfort with cloud offerings. As Forrester Research analyst James Staten notes, for example, it's simpler today for startups or smaller companies to use Amazon's EC2 and S3 cloud services, as opposed to large enterprises. Staten believes large enterprises may inch their way into the cloud for the ability to do quick and cheap experimentation. Also, end users could use cloud services to bypass IT for some needs or projects, Staten predicts.
Applications That Call Out for Cloud Options
What specific applications are leading you to use or actively research cloud offerings? Collaboration apps rank as early winners, according to our survey results. A significant portion of you are also trying to figure out the server and storage on demand equations now. And a surprising 54 percent of respondents mentioned ERP as on the radar or in use-notable since ERP apps often represent the most mission-critical and expensive applications to the business.
"Like every other technology, it (cloud computing) has its place," wrote one respondent to our survey. "Mobile access, non-mission-critical capabilities, and general support functions (provisioning, e-mail, etc.) are easy targets."
Describe Your Plans/Usage of the Following Cloud Offerings
 | On the radar/actively researching | Currently using or implementing | Planning to use next year | Planning to use one to three years | Planning to use three to five years | No plans to use |
| 27% | 34% | 4% | 3% | 2% | 30% |
| 17% | 50% | 8% | 4% | 4% | 17% |
| 19% | 35% | 4% | 5% | 3% | 34% |
| 22% | 23% | 4% | 4% | 4% | 43% |
| 21% | 33% | 5% | 7% | 2% | 32% |
| 16% | 27% | 4% | 5% | 2% | 45% |
| 18% | 32% | 4% | 5% | 2% | 39% |
| 22% | 31% | 6% | 4% | 7% | 30% |
A whopping 45 percent of you cite security as the top concern surrounding cloud computing at your enterprise. And you've been through blockbuster tech waves like the ERP revolution, so it's not surprising that you're already worrying about integration issues with existing systems and cloud computing.
Greatest Concerns Surrounding Cloud Adoption at Your Company
| 45% |
| 26% |
| 26% |
| 25% |
| 24% |
| 19% |
| 19% |
| 12% |
| 11% |
| 11% |
| 11% |
| 7% |
| 6% |
As we've recently reported, cloud computing will rely on virtualization to quite an extent. The economics demand it for cloud vendors to succeed. Yet such basic issues as moving virtual machines between physical servers with processors from differing vendors (AMD and Intel) have yet to be resolved by the industry. And when you start talking about making customer data easily portable between different cloud service providers, even industry vets give wishy-washy answers right now. Microsoft has its own vision for solving the problem, a vision heavily dependent on client OS power. VMware has another vision. Bottom line: It's early and the integration questions are real.
As has been the case with SaaS offerings from the start, availability and performance worries still register, with almost a quarter of you citing them in our survey.
Show Me the Security
"I believe cloud computing places too many variables out of our control," wrote one respondent in the verbatim comments to our security questions. That opinion is not uncommon among IT vets, according to our research.
How will IT leaders get their heads around the security issues with cloud computing? After all, many IT leaders just got comfortable with virtual servers: now they're being asked to work off virtual servers in cloud providers' physical locations-where their precious data will be further from reach, and co-located with many other customers' data.
Is Cloud Security Strong Enough Yet?
| 59% |
Consider this, the CEO of a cloud infrastructure company recently told me: Each day, IT departments hand reams of paper to an Iron Mountain representative and trust that he will shred and destroy it or otherwise deal with it according to instructions. Do you see the rep do it? No, you trust the vendor. Cloud vendors, he said, must get to that kind of trust with IT, before cloud computing can take off in a mainstream way.
Based on our survey results, vendors have a long road ahead before they earn that kind of trust.
Understanding the Cloud and Trusting It Are Very Different
Despite the amount of marketing hype in the marketplace right now, your core understanding of cloud computing is not the problem, according to our survey results. A full 78 percent of you call yourselves very or somewhat knowledgeable about the cloud.
How Knowledgeable Are You About Cloud Computing?
| 51% |
| 27% |
| 13% |
| 7% |
| 2% |
It's just early in the game and your security and integration concerns are real.
SURVEY METHODOLOGY NOTE: The margin of error on a sample size of 173 is plus or minus 7.5 per cent. Percents on questions where a respondent could only select one answer may not sum to 100 due to rounding. Not all respondents answered all questions.
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.