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The Explosive Growth of the Cloud

Cloud GrowthThe IT landscape is shifting, and cloud services aren’t just center stage – they’re overwhelming the stage.

The Worldwide Semiannual Public Cloud Services Spending Guide, a publication of market intelligence firm IDC, analyzed Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) spending numbers across various global markets and a range of industries. The findings are clear: with a 2017 spending increase of 24.4% over 2016, cresting $120 million worldwide, cloud growth outstrips all other IT growth by a factor of seven. And the rate of growth is forecasted to remain high — above 20% per year through 2020.

SaaS Domination

Cloud computing is still dominated by SaaS applications, though there’s no guarantee that SaaS will remain the flagship offering of the cloud. SaaS represents about two-thirds of current cloud spending, but its growth is slower than IaaS and PaaS trajectories: through 2020, PaaS is expected to grow at a rate of 30.1% each year, while IaaS outstrips it at 32.2% annually.

Adoption by Industry

Not all industries are seeing equal cloud adoption. Manufacturing, professional services, and finance are forecasted to spend the most on cloud services, accounting for around a third of all cloud spending. The professional services industry also leads the pack in cloud growth, with a spending rate growing by almost 24% per year.

Cloud Spending

Despite the potential expense of moving large organizations (and entrenched infrastructure) to the cloud, companies with over 1,000 employees aren’t shy about migration: they account for over half of all cloud spending, and their spending rate is increasing faster than companies with fewer employees.

Global Cloud

Generating almost two-thirds of all global cloud revenue, the United States is the largest current public cloud market – though the Asia/Pacific region (Japan not included) and Latin America are each growing at faster rates: Asia/Pacific at 28%, and Latin America at 26.6% annually. In fact, globally, the US has one of the slowest cloud growth markets, increasing at a rate just shy of 20% per year.

As the market matures, it’s likely that previously untapped markets will come to regard the cloud as an essential piece of infrastructure. In particular, European markets have been more resistant to cloud adoption than those in the US, but they show healthy growth which is forecasted to continue through the end of the decade.

Domestically and worldwide, for large companies and small, the cloud is growing – and it’s not predicted to stop any time soon.

How to Determine if Cloud or On-site Video Conferencing Is Ideal

Video ConferencingPrior to purchasing video conferencing services, businesses should consider the differences between cloud and on-premises services to determine which type of service is ideal for them. As video conferencing continues to evolve and become increasingly streamlined over time, costs have decreased and these services have become more accessible to the average user.

There are two main ways for businesses to utilize video conferencing. The first is to keep video conferencing operations on-site with everything located within the workspace, while the second is to outsource it to a third party provider that deploys it as Software as a Service (SaaS) via cloud storage.

What Is Included in Video Conferencing Solutions?

Both cloud-based and on-site video conferencing services include many of the same components, but there are some differences between their capabilities.

  • Recording and Streaming – Both on-premises and cloud-based video conference calls can record and stream conferences, but while on-site services keep data within their own network, cloud services store data on third-party servers. Service level agreements (SLAs) can help businesses determine how data is stored and in what locations. Business owners also need to consider the total cost of ownership as it pertains to data storage and network traffic.
  • Multipoint Conferencing/Bridging – The great advantage of multipoint conferencing, or bridging, is the ability to include a large number of sites on a single call. The number of available users will vary from vendor to vendor, but typical on-site multipoint conferencing will allow anywhere from 12 to 120 users on one call, while cloud services often allow 25 to 50 users, with little to no call limits for the latter.
  • Firewall Configuration – One of the limitations of on-premises video conferencing is the need to setup firewalls prior to making calls beyond the business’s network. Configuring a firewall can be complex, requiring users to take multiple factors into account. Cloud-based services can help companies avoid this issue entirely, allowing them to connect nearly anywhere with internet connectivity.
  • Centralized Network Management – Another advantage of cloud-based services is streamlined network management, with the ability to update software and address books and manage problems with the network through an automated process.

When On-Site Video Conferencing Is Appropriate

On-premises video conferencing was a much more popular choice for organizations when it was the only method available. Today, companies utilizing this type of conferencing the most are large organizations that place security as a top priority, such as government agencies or businesses that handle large amounts of confidential client information.

However, on-site video conferencing also requires a lot of resources that many businesses simply don’t have, particularly smaller companies with minimally staffed IT departments. Unless the business has the ability to handle all of the details surrounding on-premises conferencing, this method isn’t ideal.
When to Choose Cloud-Based Video Conferencing

Cloud technology is constantly evolving, and cloud-based services are becoming less expensive over time. They are highly scalable to meet the needs of small to large businesses, with fixed costs available to maximize predictability of expenses. These services also include plenty of automation to reduce the need for a large and consistently attentive IT team.

When choosing between on-site and cloud-based video conferencing services, businesses should consider their unique requirements.

Making the Right Choices in the Cloud

shutterstock_328634297While it may be true that cloud services are not the perfect solution for all business computing needs, almost every business has at least some applications for which cloud is, indeed, the best solution. Premises-based solutions will continue to become less prevalent as time goes on. The focus of cloud services on scalability, efficiency, and flexibility is the primary driver of the move away from premises-based computing.

The biggest problem with traditional solutions is that in order to maintain capacity for peak loads, it’s necessary to maintain a great deal more computing resources than are needed the rest of the time. Overspending becomes a necessity. There is also the onerous process required to upgrade server capacity or other infrastructure.

Cloud solves these problems admirably by placing the onus for hardware purchasing and maintenance on someone else’s shoulders. There are three ways in which cloud services can be deployed, each serving a slightly different set of needs.

SaaS

Software as a Service (SaaS) involves the hosting of individual business applications in the cloud, to be accessed remotely by end users. The business has no control over the environment in which the application ‘lives’ under this model.

PaaS

Platform as a Service (PaaS) provides all the infrastructure, management, development, and deployment tools a business needs to create and maintain their own software applications.

IaaS

Infrastructure as a Service (IaaS) consists of hardware and other components (networking, storage, servers, and software) and gives businesses more control over the system than SaaS.

One of the most difficult aspects of moving to the cloud is not deciding what type of service a business needs, but rather what parts of the business can best utilize the cloud in the first place.

What Not to Move

Business critical applications should certainly not be among the first to transition to a new environment. Nor should any applications where performance is touchy, or that require intensive number crunching. Any system with a high level of complexity and tight integration with multiple apps should also probably wait until the organization has more cloud experience.

What Should be Moved

Non-critical systems are a good first step, including departmental applications where a smaller number of people will be affected by growing pains. Email servers and other well-established and easy to maintain apps are also likely candidates.

Other Considerations

Before making the jump into the cloud, it’s important to consider a few other details:

  • What are the company’s requirements for a service level agreement (SLA)?
  • Is a service provider able to provide the required level of security with the type of cloud model that fits the business’s other needs?
  • Do any of the apps that will be hosted in the cloud have special requirements?

The cloud isn’t more difficult to understand than on-site resources; it’s the same, only different. The differences can, however, complicate individual situations and turn wrong decisions into costly mistakes. Contact us for help simplifying the complicated.