In conversations today, business and IT leaders tell us they have a transformative objective—they are looking to better use technology to compete, serve customers, and affect margins.
At Pivotal, we believe these efforts will be powered by PaaS (platform as a service). Earlier this week, DZone’s 2014 Cloud Platform Report further substantiated this by indicating that PaaS adoption is finally ahead of IaaS, and we offered insight into why this is happening, and specifically why now.
The continuous momentum of our own Cloud Foundry is further proof, with industry leaders like IBM, Savvis, Piston Cloud, Intel, ActiveState, Stark & Wayne, Canonical, CloudCredo, and Verizon joining the Cloud Foundry PaaS Community Advisory Board. And participation isn’t token. Its real enough that last week we announced we will be working alongside EMC, IBM, HP, Rackspace, SAP, and VMware, plus many others such as ActiveState and CenturyLink, to establish an independent non-profit organization—a Cloud Foundry foundation in order to broaden adoption and advance the platform at a faster pace.
So, if you are a CIO or CTO and embracing PaaS further or on the brink, there are 10 PaaS-related, survey-based statistics that we think every digital business leader can use to help drive PaaS-related teams and projects.
First, Why is PaaS Important to Every Company?
Internet giants like Google, Facebook, and Twitter have created some serious CIO envy. With much of their plumbing derived from open source software, they have created elaborate development platforms that allow them to pump out innovation in a near continuous stream. PaaS is a cornerstone of these modern software development shops, powering their achievements in agile development. Pivotal CEO, Paul Maritz, refers to this agility in a recent Economist article as the “holy cycle” of applications, data, and analytics—build the first, extract the second, apply the third, improve the first, and so forth.
Business leaders know they must improve their ability to deliver software because, more and more, software is embedded within their business, products, and services, helping them compete. To better deliver software to customers, they need to manage software development more like these internet leaders—moving through the holy cycle faster, at greater scale, and at a lower cost.
This means companies must use PaaS to make development teams more productive—where developers don’t have to worry about public, private, or hybrid infrastructure, and they don’t spend as much time deploying, running, or scaling apps and services. With the right PaaS in place, developers can spend virtually all of their time learning about customer needs and developing solutions to advance business goals.
With this in mind, here are the 10 key statistics that support the prioritization of PaaS teams and projects.
1. Lines of Business See the Cloud as More Strategic than IT
IBM’s Center for Applied Insights collaborated with Oxford Economics to survey 802 cloud decision makers and users, creating the report Under Cloud Cover: How Leaders are Accelerating Competitive Differentiation. According to the report, “business leaders of all stripes—Finance, Sales & Marketing, Product Development and more—are becoming increasingly focused on the business value cloud provides. Over the next three years, cloud’s strategic importance to business users is expected to double from 34 percent to 72 percent, even surpassing their IT counterparts at 58 percent.” This is happening because, “More and more business leaders are recognizing its [the cloud’s] profound implications for how enterprises can make money, differentiate, and compete.”
2. Business Lines are Purchasing Cloud-related Technology Outside of Centralized IT Budgets
In every business line, there is a portfolio of people, products, features, services, and processes that advance the ability to generate revenue, increase profit, and compete. According to the 289 responders in the 2014 IT Budget Outlook by InformationWeek, business lines are making decisions to spend money on technology outside of IT to advance their portfolios.
- As far as trends go, 2014 showed 37% of responders seeing an increase in spend outside of central IT, up from 22% in 2013.
- The trend for centralizing IT budgets is almost the complete opposite, going from 38% in 2013 to 21% in 2014.
In addition, the report shared the key types of technology purchases being made outside of centralized IT budgets:
- 39% said Cloud spending and SaaS
- 29% said outsourced web or mobile app development
- 21% said application development staff within a business unit
- 19% said Cloud spending, IaaS, or PaaS
3. CIOs Focus on Business Value, Find A Shortcut to Conquering Data, Improving SLAs
As CIOs embark on their journey to the cloud, it is clear they are not doing it just for their IT budgets and processes. Increasingly they are trying to deliver real value to the business. InfoWorld’s 13th Annual State of the CIO, released on January 17, 2014, surveyed 722 CIOs and found that many of their top goals, below. These could be powered by PaaS and provide shortcuts to business value:
- Improve the use of data and analytics (72% of responses)
- Support business and marketing goals (66% of responses)
- Improve IT project delivery (56% of responses)
- Develop skills for emerging tech and innovation (52% of responses)
- Reorganize/retrain for a focus on business outcomes and innovation (50% of responses)
4. External IT Budgets are Increasing in Cloud and Analytics
Given the CIO’s goals, external budgets are being increased and focused. IDG reported on a Morgan Stanley survey of 150 CIOs from large companies on January 14, 2014. U.S. CIOs expect their external IT budgets to increase 4.8% in 2014 and European CIOs expect 3.7%. The article said, “Projects that will see the largest increase in spending will involve cloud computing and data analysis.”
5. Business Needs are #1 Driver of Cloud Adoption; Hybrid/Private Clouds Growing Most
In early February 2014, TechTarget’s fall 2013 Cloud Pulse survey of 825 IT professionals was announced and found:
- 45% cite “business needs” as their top reason for public clouds. Two years ago, the top reason was cost savings (73%), which was only 29% this year.
- The primary causes of delayed adoption are security, control, and amount already invested in internal IT.
- Hybrid clouds are now used by 38% instead of 29% of last year’s survey responders.
- Private cloud use moved from 31% to 22% since last year.
- Public cloud use remained at 40% year over year.
6. Business Agility is the #1 Driver of Adoption; Hybrid PaaS to Grow Fastest
GigaOM Research and North Bridge Venture Partners released a report in June of 2013 with 855 respondents across various roles. Here are some of the key insights:
- The three main drivers of cloud adoption today are: gaining greater business agility (54.5%), scalability (54.3%) and cost (48%).
- From 2012 to 2016, public cloud use will decline from 39% to 32% and private clouds from 34% to 25% while hybrid clouds expect to rise from 27% to 43%, becoming the most common model.
- 33% have adopted Platform-as-a-Service (PaaS), and it is expected to grow the fastest over the next five years, with 72% of respondents saying they expect to use PaaS in their organizations.
- 45% are using Infrastructure-as-a-Service (IaaS) today, attaining a growth of 29% from last year.
- 63% of those surveyed report Software-as-a-Service (SaaS) is in use in their companies, growing 15% over 2012.
7. Time-to-Value a Top Driver; Private Cloud Large, Growing, & Running Critical Workloads
An IT infrastructure metering company, 6fusion, surveyed 200+ IT decision makers in January of 2013 to uncover many different insights on how companies use PaaS:
- The top benefits cited were cost savings, flexibility, scalability, and faster time-to-value.
- 39% of companies were using private clouds, 31% using public clouds, and 28% using hybrid.
- 28% of responders plan to increase private cloud spending by more than 20% and 29.7% plan on increasing public cloud spending by more than 20%. No respondents plan to decrease.
- 20% of responders deploy mission critical workloads in the public cloud and 44% deploy mission critical workloads in the private cloud.
8. Internal, Private Cloud is Top Investment
TheInfoPro, a service of 451 Research, released a cloud computing study in September of 2013 with several interesting insights based on interviews with 100 IT professionals:
- The top four cloud computing-related projects enterprises are working on right now are: Internal Private Cloud (35%), Cloud Provider Assessments/Strategy Planning (33%), Infrastructure-as-a-Service (IaaS) (31%) and Software-as-a-Service (30%). Cloud Provider Assessments/Strategy Planning have seen the largest increase, attributable to more enterprises looking to better support strategic plans with more agile, efficient IT organizations.
- The median enterprise cloud computing budget, including capex and opex, is $675,000 and the mean enterprise cloud computing budget is $8,234,438. The study found the largest enterprise cloud computing budget at $125M.
9. Private Cloud Expects 29% Increase in Workloads
On November 12, 2013, Technology Business Research Inc. announced The Private Cloud Customer Report and associated webcast. Based on a survey of 650 cloud end users, they found that “Private cloud adoption was spurred by customers’ need to fill gaps in public cloud solutions; however, its versatility is shifting the perception of, and ultimately demand for, private cloud by providing flexible solutions that address the requirements of maturing customers. This shift will lead to a 29% year-to-year increase of workloads run on private cloud solutions, from an average of four in 2013 to 10 in 2014.”
10. Private Cloud Growing 50%, Leading to Hybrid Model
Last November, TechTarget published an article quoting Forrester, “Hybrid is indeed the cloud architecture that will dominate,” said Dave Bartoletti, analyst with Forrester Research Inc. in Cambridge, Mass. “We’re seeing over 50% of enterprises prioritizing private cloud in 2013 to 2014, and there will likely be very few private clouds that don’t have a public [hybrid] component.”
We hope these statistics help you and your teams, please feel free to link to other, related stats in the comments below.
To learn more about Pivotal’s PaaS (Platform as a Service):
- More of Pivotal’s Blog Posts on PaaS and Cloud Foundry
- Articles from the Cloud Foundry Blog
- Pivotal CF Product Overview, Datasheet, Documentation, and Downloads
- Cloud Foundry Community documentation, blog, wiki, and more
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