The cloud has seen huge rates of adoption this year, and it will spread even further into entrenched industries over the next year, according to a new report from Forrester Research.
Similarly, according to Verizon Enterprise Solutions’ 2016 State of the Market: Enterprise Cloud report, 84% of businesses surveyed said their cloud use has increased in the past year, and half of enterprises say they will use cloud for at least 75% of their workloads by 2018.
At the same time, the number of cloud providers is shrinking. The industry has seen significant consolidation in the past two years, as legacy technology giants have bought a broad range of smaller providers to build their own cloud infrastructures. Each month, the number of independent cloud infrastructure providers shrinks.
Despite all the consolidation, the cloud vendor landscape is still too crowded, according to the Forrester report, and it will see continuing consolidation in the coming year. Forrester therefore recommends that CIOs work with the major public cloud providers such as Amazon, IBM and Microsoft. Forrester says CIOs and IT leaders should be “wary of small, specialized players due to their narrow focus and the increased risks these companies carry around longevity and security.”
Why bigger may not always be better
Larger businesses interested in straight IaaS may find the big players are indeed the best bet (after all, their economies of scale mean they can offer cloud services at very lost costs). But for businesses in specialized industries, the best choice really depends on which cloud providers can best fit your needs.
Those in specialized industries may find a smaller cloud company that has developed a niche product is the best bet. Smaller cloud services providers can often focus on the needs of a regional or vertical industry rather than trying to be “everything to everyone.”
In addition, to compete with the big guys, smaller cloud providers have to focus on personal service, which can be a huge bonus for companies new to cloud. The smaller providers also tend to be more nimble in adapting to technology changes. And, they have to move fast to keep ahead of the big cloud providers.
Whether your company chooses to go with one of the “big three” or with a niche player, Forrester says the most important thing is that businesses view the cloud as a way to increase flexibility and to improve operations. IT leaders will miss out on the greater purpose of cloud-based solutions if they simply re-host existing applications on the cloud to reduce costs, says Forrester.
Finally, Forrester strongly encourages CIOs to stop using security as an excuse for staying away from cloud. Such concerns “are largely unfounded,” says the firm.