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Hostway’s Cloud Forecast for 2014

The pace of cloud growth and adoption remains inextricably linked to the pace of cloud education

The pace of cloud growth and adoption remains inextricably linked to the pace of cloud education. Whether it's due to security concerns being allayed or cloud definition confusion being reduced, the small- and medium-business space seems ripe for education-based growth. Add in the continued cost-efficiency-based adoption of public cloud by SMBs that are priced out of significant infrastructure capital expenditures, and the growth trend is reinforced. With this overall trend in mind, here are additional predictions for 2014 in the cloud marketplace:

  1. Cloud providers will increase cloud security education. Gartner's Predicts 2014 document notes that "while cloud is becoming part of the fabric of IT, confusion is still rampant, and longstanding beliefs about security and operations continue to ‘cloud' opinions and approaches." Cloud companies will serve themselves by fostering understanding of cloud in the SMB space. And education always focuses on security concerns. The basic perception of cloud, for many people, inherently bears a stain of unregulated information access. This nebulous term must be better defined for people to adjust to the idea of a secure, compliant cloud.
  2. SaaS will continue to make significant headway. Multiple analyst projections place cloud growth in the coming five years at approximately 25 percent. One must note, however, that much of that increase is in Software-as-a-Service (SaaS) applications, and not infrastructure virtualization. While every company has its own specific needs, SaaS packages address many of those needs, and the simplicity of SaaS drives its adoption. Including SaaS in the definition of cloud further strengthens the SMB portion of cloud space growth but lends itself more heavily to the S of SMB.
  3. Windows Server 2012 R2 will level the virtualization playing field. Windows Server 2012 R2 should draw more Microsoft-based businesses into the virtualization space. The new MS release closes the gap significantly between Microsoft and VMware, and with the portion of SMBs running windows, this robust virtualization offering should make a real difference in terms of cloud adoption.
  4. BCDR adoption will be a top leader in virtualization adoption. The decreasing expense of legitimate disaster recovery plans will help replication technology adoption outpace growth of other virtualization technologies. While many businesses lack in their DR plans, the urgency of the message - combined with the growing financial accessibility and the regulatory demands in several industries - is driving accelerated adoption. For any decision-maker aware of the business impacts associated with a disaster, the idea of getting up and running within minutes after a catastrophe will yield traction.
  5. Healthcare and financial sectors will face the biggest decisions around migrating to the cloud. The medical and financial sectors remain significant growth areas due to regulatory issues. Electronic Health Records mandates are generating an amount of data - and a term of storage - that lends itself to cloud usage, and prohibitive capital expenditures on infrastructure force companies to the cloud. Similarly, SEC and IRS regulations regarding records maintenance simply guide many financial businesses to cloud by necessity.
  6. IT knowledge will be the biggest hurdle for virtualization technologies. For many other virtualization technologies, the remaining adoption hurdle for SMBs is lack of IT savvy. True virtualization requires true competency, and paying for true cloud competency isn't within reach of some businesses, especially those that have only one true IT professional. This feeds back into the education idea in general: With so many companies popping up offering cloud, and defining cloud in so many different ways, the concept gets muddled in the mind of the average corporate decision-maker, who must figure out which solution fixes his or her unique problem.
  7. Desktop-as-a Service will make its mark toward the end of 2014. The largest unknown in this equation is Desktop-as-a-Service, an option that has received a great deal of lip service in the previous four or five years as the next big wave, but has yet to fully materialize. Many companies have sprung up for this portion of the market, and this service remains the biggest pain point for the IT staffs of many SMBs, especially medium-sized businesses. The adoption surge for Desktop-as-a-Service should finally come towards the end of 2014.

Finally, because of the nature of the business, revenue growth remains predicated on customer experience - and as the industry's competence grows, customer satisfaction should follow suit. Customer retention, especially in a service-driven industry, is essential to keep cloud companies afloat. Better education in customers can mean higher expectations of their service - and that service can become a true differentiator in cloud company success.

More Stories By Jim Potter

Jim Potter is Vice President of Product Management at Hostway. He leads the product management and product marketing activities for the cloud hosting service provider.

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