Welcome!

@CloudExpo Authors: Yeshim Deniz, AppNeta Blog, Raul Valdes-Perez, Kevin Benedict, Liz McMillan

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.

@CloudExpo Stories
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, will posit that disruption is inevitable for c...
SYS-CON Events announced today that Telecom Reseller has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
In recent years, containers have taken the world by storm. Companies of all sizes and industries have realized the massive benefits of containers, such as unprecedented mobility, higher hardware utilization, and increased flexibility and agility; however, many containers today are non-persistent. Containers without persistence miss out on many benefits, and in many cases simply pass the responsibility of persistence onto other infrastructure, adding additional complexity.
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
Pentaho has announced orchestration capabilities that streamline the entire machine learning workflow and enable teams of data scientists, engineers and analysts to train, tune, test and deploy predictive models. Pentaho’s Data Integration and analytics platform ends the ‘gridlock’ associated with machine learning by enabling smooth team collaboration, maximizing limited data science resources and putting predictive models to work on big data faster – regardless of use case, industry, or languag...
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
SYS-CON Events announced today that Addteq will exhibit at SYS-CON's DevOps Summit at Cloud Expo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Addteq specializes in creating innovative solutions to solve business processes through the use of DevOps automation. Addteq was founded on the firm belief that automation is essential for successful software releases. Addteq's products and services are centered around the fundamental approach of understanding the pr...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Peak 10 has announced that it has completed a 20,000 square foot expansion of its Cincinnati-area data center, a 6,000 square foot expansion of its data center campus in Charlotte’s University Research Park, and added a pair of seasoned executives to its leadership team. This further propels the company on its aggressive growth trajectory to meet the rising demand for flexible hybrid IT strategies and solutions across its enterprise customer base. Cincinnati is home to companies like Kroger, Pr...
VeriStor Systems has announced that CRN has named VeriStor to its 2017 Managed Service Provider (MSP) 500 list in the Elite 150 category. This annual list recognizes North American solution providers with cutting-edge approaches to delivering managed services. Their offerings help companies navigate the complex and ever-changing landscape of IT, improve operational efficiencies, and maximize their return on IT investments. In today’s fast-paced business environments, MSPs play an important role...
SYS-CON Events announced today that Infranics will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Since 2000, Infranics has developed SysMaster Suite, which is required for the stable and efficient management of ICT infrastructure. The ICT management solution developed and provided by Infranics continues to add intelligence to the ICT infrastructure through the IMC (Infra Management Cycle) based on mathemat...
Have you ever noticed how some IT people seem to lead successful, rewarding, and satisfying lives and careers, while others struggle? IT author and speaker Don Crawley uncovered the five principles that successful IT people use to build satisfying lives and careers and he shares them in this fast-paced, thought-provoking webinar. You'll learn the importance of striking a balance with technical skills and people skills, challenge your pre-existing ideas about IT customer service, and gain new in...