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Public Cloud Spending To Exceed $107 Billion In 2017

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Cloud Computing Is Entering "Phase Two" Adoption Trends

As the IT landscape progresses and evolves, decision-makers are increasingly pressured to adapt and innovate if they want their organizations to stay competitive with rival firms that continue to adopt next-generation technologies. Fortunately, office phone systems, storage architectures and general IT infrastructure environments are constantly transforming and becoming more innovative platforms that can be utilized by forward-thinking executives.

Cloud computing is one of the business world's most disruptive IT services, as it has the ability to transform virtually every existing and emerging technology in the workplace. This means enterprises can use the cloud to replace old phone systems, augment outdated collaborative strategies and even embrace the big data phenomenon with fewer concerns. For these reasons, among others, analysts believe the cloud market will continue to expand, regardless of initial concerns regarding security, availability and overall performance.

A recent report by analysts at market research firm IDC highlighted the growing enthusiasm in the public cloud, noting that worldwide spending on the services is expected to exceed $47 billion by the end of this year and grow to more than $107 billion in 2017, representing a compound annual growth rate of 23.5 percent within the forecast period. Although the public cloud was originally looked down upon because of its inherent privacy and security obstacles, decision-makers are beginning to overlook these concerns as the solutions become more sophisticated and enterprises themselves become familiar with how to properly use the technology to their advantage.

The Dawn of a New Cloud Era

As the use of the cloud in the workplace grows, analysts believe the trend will usher in a "chapter two" phase of the technology. This era will be when the cloud and other third platform solutions, including mobile and social services, become even more abundant in the enterprise as decision-makers pursue new strategies to improve operations and innovate. These driving forces are different than they were in the past.

"The first wave of cloud services adoption was focused on improving the efficiency of the IT department. Over the next several years, the primary driver for cloud adoption will shift from economics to innovation as leading-edge companies invest in cloud services as the foundation for new competitive offerings. The emergence of cloud as the core for new 'business as a service' offerings will accelerate cloud adoption and dramatically raise the cloud model's strategic value beyond CIOs to CXOs of all types," said Frank Gens, senior vice president and chief analyst at IDC.

Analysts highlighted how the growth of the cloud will push an inevitable consolidation of the market as a whole. This means that providers will be forced to optimize their offerings and scale their solutions "up and out" in order to reach the largest number of customers and keep users engaged. This expansion of cloud tools, yet overall consolidation of the market, will mean that cloud VoIP and other technologies that are beginning to emerge will be required to adapt if they are to meet the needs of enterprise-level clients.

"In this second phase of cloud development, it will be essential for cloud services providers to reexamine their cloud strategies, preparing for a marketplace focused intensely on business innovation, industry transformation and increasingly pressured pricing and operating models," Gens asserted.

The Clouds of Tomorrow

There is no doubt that the evolving cloud landscape will include a wider range of solutions for businesses in the future, as this will be required of vendors if they want to survive an increasingly crowded and competitive marketplace. As a result, enterprises will be able to leverage more sophisticated solutions in a broader range of operations, enabling a stronger and more efficient workplace than ever before.

One of the most common reasons for implementing the cloud is to support a remote workforce, as this meets the needs of employees without jeopardizing productivity and the ability to meet long-term objectives. The advent of mobile technologies has been a particularly strong motivator behind the cloud's proliferation. A recent Cisco report highlighted similar thoughts, noting that business processes, not necessarily technology in itself, drive the use of the cloud. This means that the next-generation workspace, which includes areas outside of the conventional office, and other transformations will encourage firms to implement the cloud.

Cisco also noted that most collaborative tools are now using the cloud in some way or another, which suggests that the communication landscape as a whole will likely make its way to the outsourcing market. As this trend happens, it will be important that executives plan ahead and work with experienced providers that have a history of offering sophisticated and efficient technologies.

In the coming years, cloud computing will continue to influence business operations, encouraging decision-makers to assess internal processes and recognize where and how the cloud can be incorporated to optimize performance.