Not Surprising: Businesses Focus on the Private Cloud as Public Cloud Not Viable

Whatever reason you cite, Security, Stability, Privacy, Redundancy, Availability, or NSA, the Public Cloud is proving to be an unviable solution for businesses. A recent report from Technology Business Research, Inc. (TBR) shows that adoption of the Private Cloud will soar in the next 5 years, with an estimated $69 billion of revenue generated by 2018.

In my dealings with customers and community members, the belief in a Public Cloud offering is much different than the vendors offering the solutions. Companies tend to like how a Public Cloud works but would much rather house the same technologies and processes internally, ensuring control over cost, data, and resources. Technologies like Windows Azure continue to improve and it won't be long before what Microsoft offers in the Cloud will mirror exactly what is maintained in a company datacenter, but there's still a long way to go to build confidence and change perception. Microsoft is still building their Cloud solutions as if SLA is a marketing term instead of a goal. In Build the Cloud Like a Bad Guy I talk to this and discuss why Cloud Providers are developing their solutions using the wrong criteria.

The press release below contains more information about TBR's research, but more importantly, they are hosting a webinar called How the Rise of Private Cloud Is Reshuffling the Cloud Landscape that kicks off at 11am EST on November 14^th. I'll be in attendance as this sounds like an interesting topic that should produce some valuable information. If you happen to miss it, I'll keep an eye out for the on-demand replay.

Press Release 

Private cloud adoption will result in $69 billion in revenue by 2018

HAMPTON, N.H. (Nov. 12, 2013) —Technology Business Research Inc.’s (TBR) Private Cloud Customer Report estimates adoption of private cloud solutions will generate $69 billion in revenue by 2018. The report, which is the first of three customer-facing research initiatives in TBR’s cloud customer portfolio, surveyed 650 cloud end users across North America, Europe and Asia to map vendor opportunity, customers and competitive landscapes. The data and analysis in the report details customers’ perceptions of competing vendors, predicts buyer behavior, and highlights the barriers and drivers of adoption, which will shape the competitive strategies of private cloud vendors over the next five years.

TBR research shows that initially 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. Despite this growth rate, customers that opt to move to a private cloud still struggle with proving a business case for the next set of increasingly complex workloads. This disjointed adoption road map signals opportunity for vendors to help customers move “low-hanging fruit” workloads such as CRM, HR, systems management and storage; however, the move is a more difficult path for functions such as ERP and BI.

“We looked at complexity and security criteria, and the ability for the workload to perform on a managed private cloud,” said a survey respondent from a billion-dollar engineering firm. “We started with the low-hanging fruit: the simple applications with minimal security constraints.”

“Private cloud has truly come into its own as a delivery mechanism that customers understand and are using to achieve the benefits of cloud where public options are either not available or viable,” Lead Cloud Practice Analyst Allan Krans said. “It’s an interesting space because the vendor landscape is so diverse and should evolve tremendously as offerings, regulations and open standards play out over the coming years.”

Krans will review high-level findings from the Private Cloud Customer Report during the webinar “How the Rise of Private Cloud Is Reshuffling the Cloud Landscape” on Nov. 14 at 11 a.m. EST. Interested participants can register for this webinar at https://tbrevents.webex.com/.

Two reports outlining customer adoption of hybrid cloud and professional cloud services, respectively, will follow the Private Cloud Customer Report over the next two weeks.

For more information about the Private Cloud Customer Report or to purchase the report, please contact please contact Alison Crawford, senior marketing manager, at 603.758.1838 or [email protected], or James McIlroy, vice president of sales, at 603.758.1813 or [email protected].

ABOUT TBR

Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and accurate market research and business intelligence in a format that is uniquely tailored to clients’ needs. TBR analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis.

TBR has been empowering corporate decision makers since 1996. For more information please visit http://tbri.com/.