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Friday, December 05, 2014

Exploring the Demand for Cloud Professional Services

The early-adopters of cloud services already know what they want to achieve from each new deployment, and are somewhat confident that they're able to plan, implement and manage their own projects. In contrast, the typical CIO or IT manager in the majority of enterprises still need the help and wisdom of experienced practitioners -- people who have been there, done that.

That's why business decision makers are seeking cloud professional services guidance at twice the rate of private and public cloud vendors, according to the latest worldwide market study by Technology Business Research (TBR).

Today, these consulting engagements are a pivotal point of the mainstream buyer's journey, as more executives make the decision to migrate to a cloud services model and consultants provide advice and education to prospective cloud customers.

Public, private and hybrid cloud integration guidance demand will follow basic cloud professional services growth in coming years, once adoption rates have increased. TBR expects the private cloud adoption rate to reach 85 percent by 2018.

TBR believes there has been an evolution in the type of private clouds adopted -- with 65 percent of third-party-delivered private clouds, compared to 35 percent of self-built private clouds. They estimate the 2014 private cloud market reached $41 billion, and is forecast to grow at a 15 percent CAGR to $72 billion in 2018.

Private cloud budgets, however, declined year-to-year in dollar value and as a percentage of cloud spend in the second half of 2014 -- due mainly to the proliferation of open-source public cloud offerings.

"Expectations around the benefits of private cloud adoption are becoming more realistic as the market matures. Cloud buying behavior has become less collaborative over the past six months, with IT regaining control of cloud decisions, leading to an influx of infrastructure workload adoption," said Cassandra Mooshian, cloud practice analyst at TBR.

Their study also found that security is the top customer-perceived barrier to private cloud adoption, followed by integration for third-party-delivered private cloud customers and usage monitoring for self-built private cloud customers.

TBR's current assessment indicates that 22 percent of the large enterprise market has already integrated cloud across their IT environments, creating a $7 billion hybrid integration market in 2014. Demand for integration will increase over the next four to five years as the enterprise market purchases cloud, and then integrates it to optimize efficiency, productivity and cost.

Beyond the near-term efficiency objectives is the greater market opportunity for cloud professional services. The Line of Business (LoB) leaders that have procured cloud services tend to focus more on commercial effectiveness. Today’s savvy executive buyers of cloud services are interested in applications that are instrumental in attaining strategic business outcomes.

Cloud adoption is viewed as a means to that end objective by the senior executives that approve the budget to procure associated IT infrastructure and related services. The "outcomes" are achieved by the agile development, delivery and execution of digital business service innovation that results in a substantive competitive advantage within the marketplace.

The relatively few multifaceted consultants that know how to achieve business-centric goals and objectives via cloud deployments tend to have very different skills and experience than the more common systems-centric technical consultants. Today, there is clearly an apparent shortage of this highly-skilled consulting talent.