UK Will Be Second Biggest Cloud Adopter

Financial benefits and ease of deployment makes cloud increasingly attractive says Gartner

UK companies will be among the biggest adopters of cloud services over the next few years as traditionally approaches to IT become less financially sustainable according to analysts.

In a report released this week, analyst Gartner said that worldwide cloud services are set to grow to around £46 billlion ($68.3bn) this year – a 16.6 percent increase on 2009. By 2014 this figure will further expand to around (£100 billion ($148bn) the analyst estimates.

Economic factors are a big reason for the increasing interest in hosted applications and compute power, the analyst group believes. The financial turbulence of the last 18 months has meant every organisation has been scrutinising every expenditure,” said Ben Pring, research vice president at Gartner. “An IT solution that can deliver functionality less expensively and with more agility (remembering that time is money) is hard to ignore against this backdrop.”

Cloud Versus Expensive In-House IT

Attend The Cloud Computing World Forum
Attend The Cloud Computing World Forum

IT managers are attracted by the ability to quickly add services via the cloud without the traditional costs and time issues of deploying infrastructure to consider, the analyst states. “Cloud computing has become more material, because the challenges inherent in managing technology based on the principles of previous eras — complex, custom, expensive solutions managed by large in-house IT teams — have become greater, and the benefits of cloud computing in addressing these challenges have matured to become more appropriate and attractive to all types of organisations,” said Pring.

UK companies will be responsible for about 29 percent of the the market for cloud services by 2014 according to Gartner. The US however will continue to be the major market for the technology with around 50 percent of worldwide cloud services spending. Japan is also expected to be major adopter with around 12 percent of cloud services revenue according to Gartner.

It has also been suggested that developing countries may become significant adopters of cloud technology because of the ease and relative costs of deployment but Gartner did not find any evidence to back up these claims. We have not seen any evidence yet to support the often-touted hypothesis that smaller and/or developing countries will “leapfrog” Western markets — and come to represent a large proportion of the overall worldwide market — through their adoption of the Internet and cloud services,” said Pring.

The new coalition government is predicted to drive a move to the cloud amongst government departments. George Osborne’s budget revealed a cut in departmental budgets which could see public sector IT managers outsourcing more services.

Security, Maturity Still An Issue

But despite the optimistic forecasts for the adoption of the technology, Gartner warned that security as well as availability and maturity are still an issue for many companies when it comes to adopting cloud services.

“Many organisations may be examining cloud computing and cloud services, but are far from convinced that it is appropriate for their requirements,” he said. “We expect that this will be a significant opportunity for existing IT services players to evolve their current offerings — such as outsourcing, system integration and development — to become cloud-enabled and try to combine the best of the two worlds, namely traditional IT services and cloud computing.”

The Cloud Computing World Forum is taking place in London’s Olympia on 29 June to 1 July. It features talks from CIOs at companies including The Telegraph, Rentokil (a big Google Apps user), British Airways and the House of Commons.