Click here to close now.

Welcome!

Web 2.0 Authors: Plutora Blog, Cloud Best Practices Network, Yakov Fain, Pat Romanski, VictorOps Blog

News Feed Item

Cloud Services Providers Confident Despite Questions Around Cost Savings, Control, And Security

KPMG survey finds providers see cloud revenues comprising significantly larger share of their total revenue due to migration of more sophisticated applications

SANTA CLARA, Calif., Dec. 6, 2012 /PRNewswire/ -- Cloud-based services revenue in two years is expected to comprise nearly twice its current share of provider revenue, even as providers believe that showing evidence of cost savings is the biggest barrier to cloud adoption, according to the 2012 Cloud Providers Global Survey from KPMG International.

Revenue from business users' migration to cloud in the coming two years will be increasingly for data-intensive applications, such as business and data analytics, content management, customer care, and operations and manufacturing, say providers in the survey.  They expect the shift to occur despite users' ongoing concerns over loss of control and data security, which are in addition to the providers' challenges of proving savings and the business case.

Nearly six out of 10 providers say cost reduction is still the chief reason most business users migrate to cloud, yet almost four out of 10 providers say proving cost savings is their biggest challenge.  The challenge is further complicated by the fact that only 39 percent of providers believe that users have realistic expectations for cost savings in the migration to cloud, while 19 percent believe users don't.

Addressing the expectations gap on cost savings is just one of the interrelated customer challenges emerging as users embrace cloud for more strategic reasons. Providers see the top three challenges as: showing stronger evidence of cost savings (38 percent), devising usage-driven pricing (31 percent), and helping clients develop realistic business cases for switching to cloud (27 percent).

"While providers are seeing the challenges of a maturing, yet still relatively young, market, we're at a pivotal point in the evolution of the cloud ecosystem as users become more comfortable with a variety of cloud applications," said Gary Matuszak, partner, global chair and U.S. leader for KPMG's Technology, Media and Telecommunications practice. "Leading cloud providers know they must evolve to provide a new level of scale, capacity and capability."

Prevailing User Concerns
Nearly half of providers say that loss of control is still a business user's biggest difficulty with cloud adoption followed by data loss and privacy risks, according to 39 percent. Fifty-seven percent of providers say they are addressing the data security issue with tighter restrictions on user access and applying more sophisticated data encryption.

Ongoing challenges with cloud adoption may point strongly to the increasing need for more tightly defined parameters on service level agreements (SLAs).

Presently, 59 percent of providers surveyed have service level commitments in their cloud SLAs. Over the next three years, 68 percent say they will have commitment parameters in SLAs, and 82 percent expect data security to be the single-most important SLA parameter. 

The Evolving Cloud Ecosystem
Currently, two-thirds of cloud providers say they are most active in software-as-a-service applications (SaaS) and expect that to continue over the next two years. Platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) activities are projected to have the greatest increase in activity over the same period.   

"The anticipated migration of core systems and critical infrastructure to cloud in the next two years will be complex undertakings; users will be requiring if not demanding strategic direction and guidance from providers across a broad range of areas," said Tom Lamoureux, Global Advisory Leader, KPMG Technology sector.  "The lines are blurring across the various types of cloud services; users need and want to understand cloud's value and immense power much better than they do."

Understanding of Cloud Needs a Boost
While about half of providers say that business users are sufficiently knowledgeable about the marketplace for cloud services, almost a quarter believe that customers need to be educated more on the basic aspects of cloud: security, pricing models, relative costs, and integration with existing infrastructure. Also, nearly a quarter believe that customers need more information about contractual arrangements such as service level agreements (SLAs).

The knowledge gap may explain the interest in outside assistance, as 60 percent of providers say users turn to a third party for help with acquiring or implementing technology. Nearly 40 percent of providers say business users employ third parties for help on the user business strategy. Users also do so, according to providers, for technology implementation (56 percent), business process transformation (45 percent) and information security assistance (41 percent).  

Providers Shore up Expertise
Providers are shoring up deeper expertise to meet the user demands for greater proficiency on cloud and help with the business case. 

Interestingly, more than one-third of providers say they need to train or retrain their sales forces on cloud.  Almost half of providers say they will form a partnership (48 percent) or expand capabilities to provide more strategic services and consulting to business users (47 percent).

Provider differentiation is no doubt higher on the agenda because they believe that increasingly, board-level executives - Chief Information Officers (79 percent) and Chief Technology Officers (77 percent) - are influencing the purchasing decisions on cloud.

About the Survey
The KPMG 2012 Cloud Providers Survey is part of a series of two global KPMG surveys on the business of cloud. The providers report is based on the findings of a web-based survey of 179 executives from cloud providers across more than 10 countries in North America (51 percent), Asia Pacific (29 percent) and Europe, the Middle East and Africa (20 percent). Forty-five percent of those surveyed were C-level executives. In January, KPMG will release the second half of the Cloud Survey series focusing on the cloud business users.

About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International.") KPMG International's member firms have 145,000 people, including more than 8,000 partners, in 152 countries.

About KPMG International
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 152 countries and have 145,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

Contact: Mike Alva
KPMG LLP
(415) 963-5426
[email protected]
On Twitter: @michaelalva

SOURCE KPMG LLP

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Roberto Medrano, Executive Vice President at SOA Software, had reached 30,000 page views on his home page - http://RobertoMedrano.SYS-CON.com/ - on the SYS-CON family of online magazines, which includes Cloud Computing Journal, Internet of Things Journal, Big Data Journal, and SOA World Magazine. He is a recognized executive in the information technology fields of SOA, internet security, governance, and compliance. He has extensive experience with both start-ups and large companies, having been involved at the beginning of four IT industries: EDA, Open Systems, Computer Security and now SOA.
When it comes to the Internet of Things, hooking up will get you only so far. If you want customers to commit, you need to go beyond simply connecting products. You need to use the devices themselves to transform how you engage with every customer and how you manage the entire product lifecycle. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, will show how “product relationship management” can help you leverage your connected devices and the data they generate about customer usage and product performance to deliver extremely compelling and reliabl...
SYS-CON Events announced today that GENBAND, a leading developer of real time communications software solutions, has been named “Silver Sponsor” of SYS-CON's WebRTC Summit, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. The GENBAND team will be on hand to demonstrate their newest product, Kandy. Kandy is a communications Platform-as-a-Service (PaaS) that enables companies to seamlessly integrate more human communications into their Web and mobile applications - creating more engaging experiences for their customers and boosting collaboration and productiv...
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, shared some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder of TeleStax, a...
The industrial software market has treated data with the mentality of “collect everything now, worry about how to use it later.” We now find ourselves buried in data, with the pervasive connectivity of the (Industrial) Internet of Things only piling on more numbers. There’s too much data and not enough information. In his session at @ThingsExpo, Bob Gates, Global Marketing Director, GE’s Intelligent Platforms business, to discuss how realizing the power of IoT, software developers are now focused on understanding how industrial data can create intelligence for industrial operations. Imagine ...
Operational Hadoop and the Lambda Architecture for Streaming Data Apache Hadoop is emerging as a distributed platform for handling large and fast incoming streams of data. Predictive maintenance, supply chain optimization, and Internet-of-Things analysis are examples where Hadoop provides the scalable storage, processing, and analytics platform to gain meaningful insights from granular data that is typically only valuable from a large-scale, aggregate view. One architecture useful for capturing and analyzing streaming data is the Lambda Architecture, representing a model of how to analyze rea...
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - is now accepting submissions to demo smart cars on the Expo Floor. Smart car sponsorship benefits include general brand exposure and increasing engagement with the developer ecosystem.
SYS-CON Events announced today that Vitria Technology, Inc. will exhibit at SYS-CON’s @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Vitria will showcase the company’s new IoT Analytics Platform through live demonstrations at booth #330. Vitria’s IoT Analytics Platform, fully integrated and powered by an operational intelligence engine, enables customers to rapidly build and operationalize advanced analytics to deliver timely business outcomes for use cases across the industrial, enterprise, and consumer segments.
When it comes to the Internet of Things, hooking up will get you only so far. If you want customers to commit, you need to go beyond simply connecting products. You need to use the devices themselves to transform how you engage with every customer and how you manage the entire product lifecycle. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, will show how “product relationship management” can help you leverage your connected devices and the data they generate about customer usage and product performance to deliver extremely compelling and reliabl...
SYS-CON Events announced today that SoftLayer, an IBM company, has been named “Gold Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place June 9-11, 2015 at the Javits Center in New York City, NY, and the 17th International Cloud Expo®, which will take place November 3–5, 2015 at the Santa Clara Convention Center in Santa Clara, CA. SoftLayer operates a global cloud infrastructure platform built for Internet scale. With a global footprint of data centers and network points of presence, SoftLayer provides infrastructure as a service to leading-edge customers ranging from ...
The explosion of connected devices / sensors is creating an ever-expanding set of new and valuable data. In parallel the emerging capability of Big Data technologies to store, access, analyze, and react to this data is producing changes in business models under the umbrella of the Internet of Things (IoT). In particular within the Insurance industry, IoT appears positioned to enable deep changes by altering relationships between insurers, distributors, and the insured. In his session at @ThingsExpo, Michael Sick, a Senior Manager and Big Data Architect within Ernst and Young's Financial Servi...
SYS-CON Events announced today that Open Data Centers (ODC), a carrier-neutral colocation provider, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Open Data Centers is a carrier-neutral data center operator in New Jersey and New York City offering alternative connectivity options for carriers, service providers and enterprise customers.
The IoT market is projected to be $1.9 trillion tidal wave that’s bigger than the combined market for smartphones, tablets and PCs. While IoT is widely discussed, what not being talked about are the monetization opportunities that are created from ubiquitous connectivity and the ensuing avalanche of data. While we cannot foresee every service that the IoT will enable, we should future-proof operations by preparing to monetize them with extremely agile systems.
There’s Big Data, then there’s really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. Learn about IoT, Big Data and deployments processing massive data volumes from wearables, utilities and other machines.
SYS-CON Events announced today that CodeFutures, a leading supplier of database performance tools, has been named a “Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. CodeFutures is an independent software vendor focused on providing tools that deliver database performance tools that increase productivity during database development and increase database performance and scalability during production.
The explosion of connected devices / sensors is creating an ever-expanding set of new and valuable data. In parallel the emerging capability of Big Data technologies to store, access, analyze, and react to this data is producing changes in business models under the umbrella of the Internet of Things (IoT). In particular within the Insurance industry, IoT appears positioned to enable deep changes by altering relationships between insurers, distributors, and the insured. In his session at @ThingsExpo, Michael Sick, a Senior Manager and Big Data Architect within Ernst and Young's Financial Servi...
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Intelligent Systems Services will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Established in 1994, Intelligent Systems Services Inc. is located near Washington, DC, with representatives and partners nationwide. ISS’s well-established track record is based on the continuous pursuit of excellence in designing, implementing and supporting nationwide clients’ mission-critical systems. ISS has completed many successful projects in Healthcare, Commercial, Manufacturing, ...
PubNub on Monday has announced that it is partnering with IBM to bring its sophisticated real-time data streaming and messaging capabilities to Bluemix, IBM’s cloud development platform. “Today’s app and connected devices require an always-on connection, but building a secure, scalable solution from the ground up is time consuming, resource intensive, and error-prone,” said Todd Greene, CEO of PubNub. “PubNub enables web, mobile and IoT developers building apps on IBM Bluemix to quickly add scalable realtime functionality with minimal effort and cost.”