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Take up of software as a service accelerates as second wave of cloud starts to build

Wed 25 Jun 2014

Over the last four years there has been a five-fold increase in software as a service (SaaS) adoption to 74% of businesses and a nearly six-fold increase in platform as a service (PaaS) adoption to 41%, according to the fourth Future Cloud Computing survey.

Carried out by investment firm North Bridge Venture Partners and market analysts, Gigaom Research, the survey revealed that 49% of respondents are now using the cloud to fuel revenue generation or new product creation and that 45% are already, or are planning to, run their company from the cloud. “This shows how integral cloud is to business,” said Michael Skok, founder of the Future of Cloud program and a partner at North Bridge.

Describing the current phase of growth as the “first wave of cloud,” Skok said: “Even though it’s largely just a transition of existing apps, the first cloud front has rolled in confidently each year as existing applications transition to the cloud and are adopted as SaaS solutions.”

David Card, vice president of Gigaom Research, said it was “good news” for IT executives. “If they can offload tedious but necessary cost-centre functions, and refocus resources on cloud-driven new business, they might be able to retake their seat at the C-table,” he said.

The second wave, according to Skok will be “transformative”. He said: “With over 11,000 cloud services/APIs, and developer adoption of IaaS (infrastructure as a service) at 56% and PaaS at 46% respectively, we are going to begin seeing the birth of new, re-imagined, cloud-native applications.”

He added: “These applications, which are only possible in the cloud, will result in an order of magnitude greater value creation than the first cloud front. This second cloud front will be transformative.”

However, the survey found security continues to be a strong inhibitor to organisations transferring to the cloud with nearly half expressing concern about how secure their data would be. Nearly a third also cited privacy concerns “as increased tension manifested itself between the desire for anonymity and the convenience and utility of personalization”.

But interoperability as an inhibitor saw a significant decrease from 27% last year to 17% in 2014 reflecting, says the authors, greater attention being paid to issues like data portability. Fear of vendor lock-in remained at 29%.

For more details of the research please click here.

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