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Cloud no longer just a ‘nice to have’: Ovum

Investment in cloud services has now moved from a ‘nice to have’ component of corporate IT systems to a strategic necessity, according to analyst firm Ovum’s 2014 Trends to Watch: Cloud Services report.

John Madden, the report’s author and Ovum’s IT Services Practice leader, said, “The rate of cloud adoption is quickly accelerating; cloud breaks through in virtually every customer conversation. This accelerated activity applies not only to private or virtual private cloud models which remain the dominant method of deployment, but increasingly public and hybrid cloud management models as well.”

Viewing cloud as a way to simply reduce cost will be a missed opportunity for corporate customers, with successful cloud investments to be instead built on “a solid bedrock of business values”, according to Ovum. This transformation is also occurring alongside changes in how enterprise customers are engaging with IT services providers, and seek to consolidate the number of strategic suppliers they work with.

The report highlighted four key trends impacting cloud services on 2014:

  • While price will remain to be an important catalyst in cloud services adoption, business value and transformation will outweigh the cost-driven factors of new cloud service investments.
  • Customers will place increasing value on vendor support during cloud deployments, and this will be an important decision-making factor.
  • Customers who have lagged in terms of having well defined and clear tactical plans for cloud management, governance, and compliance procedures will need to update their existing cloud models and make further investments to avoid failing to meet business expectations. 
  • Hybrid cloud management and service integration will surface as key differentiators for both IT services and third-party outsourcing vendors.

2014 will also be a year of  partnerships, acquisitions, and alliances among traditional IT service providers and major outsourcing firms.

“When it comes to differentiation, outsourcers and providers want to demonstrate innovative thinking and prove that they have the intellectual property (IP) that can deliver cost and business benefits by leveraging cloud. To that end, we expect more investments and acquisitions from outsourcers in mobility, analytics and social, increased commitment to ecosystems and standards such as OpenStack and an increased emphasis from vendors on how customers should improve cloud security, governance and compliance procedures,” Madden said.

 

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