Multinationals Push Key Services Into The Cloud

Cloud services are gaining momentum among large organisations, marking an expansion from the traditional user base of small and medium-size businesses (SMBs), according to new research.

Adoption of cloud services within multinational corporations (MNCs) is up 61 percent from April 2010, with 45 percent of these companies now outsourcing at least some of their key IT services to the cloud. The research was carried out by analyst firm Ovum, on behalf of Cable & Wireless Worldwide, and surveyed more than 100 MNCs across Europe, North America and Asia Pacific.

Cloud aspirations

While Europe showed stronger interest in using cloud services for networking and data management, North American companies were more interested in putting their corporate IT systems, communications and applications software in the cloud using Software as a Service (SaaS).

MNCs based in the Asia Pacific region showed by far the greatest interest across all cloud service categories, although Ovum analysts warned that companies in this region are prone to exaggerate their use of new technologies. “They tend to confuse aspiration with reality,” said Evan Kirchheimer, practice leader of enterprise services at Ovum.

Meanwhile, specific market sectors are selecting different applications to place in cloud environments. For example, 50 percent of professional services companies said customer relationship management (CRM) was particularly suited to the cloud, while half of the finance and insurance companies surveyed singled out document management.

Kirchheimer explained that the majority of MNCs are currently between ‘early’ and ‘adolescent’ adoption phases of cloud-based services, in that they have got the ball rolling, and are beginning to develop standards and implement solution on a wider scale, but are yet to establish a complex cloud ecosystem, where cloud is incorporated within corporate IT governance strategies.

“Greater adoption is dependent on the resolution of security, governance and reliability and once these concerns are addressed through standardised, tested offers from service providers, more large enterprises will feel comfortable positioning cloud as a preferred procurement option,” said  Kirchheimer.

Telcos offer flexible cloud models

Cable & Wireless Worldwide, which offers its own ‘Flexible Computing‘ cloud product, was keen to emphasise that telecoms providers are particularly well placed to tap into this burgeoning market, because cloud technology is largely based on propositions telcos already offer, such as managed hosting and data services.

According to Matt Key, managing director of enterprise at Cable & Wireless Worldwide, the most important thing for MNCs in almost every sector is that their cloud solutions are flexible and scalable, allowing them to adjust capacity according to fluctuating demand. This is particularly important in sectors where demand is cyclical, such as retail and education.

“Flexible computing is delivered across our next-generation network, essentially placing it within the enterprise’s own wide area network. This gives enterprises full control and complete confidence over all their applications and data,” said Key. “We believe we are ideally positioned to meet a growing demand for cloud services given our network and strong managed hosting capabilities.”

The news follows a survey from virtualisation giant VMware, which found only that 48 percent of British SMBs had begun using cloud solutions, compared to a European average of 60 percent. An earlier report back in December from the Centre for Economics and Business Research suggested that the cloud uptake in the UK was hindered by slow Internetaccess speeds.