Welcome!

Containers Expo Blog Authors: Elizabeth White, Liz McMillan, Pat Romanski, Gregor Petri, Flint Brenton

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
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
SYS-CON Events has announced today that Roger Strukhoff has been named conference chair of Cloud Expo and @ThingsExpo 2016 Silicon Valley. The 19th Cloud Expo and 6th @ThingsExpo will take place on November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. "The Internet of Things brings trillions of dollars of opportunity to developers and enterprise IT, no matter how you measure it," stated Roger Strukhoff. "More importantly, it leverages the power of devices and the Interne...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lea...
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.
Businesses are struggling to manage the information flow and interactions between all of these new devices and things jumping on their network, and the apps and IT systems they control. The data businesses gather is only helpful if they can do something with it. In his session at @ThingsExpo, Chris Witeck, Principal Technology Strategist at Citrix, will discuss how different the impact of IoT will be for large businesses, expanding how IoT will allow large organizations to make their legacy ap...
Video experiences should be unique and exciting! But that doesn’t mean you need to patch all the pieces yourself. Users demand rich and engaging experiences and new ways to connect with you. But creating robust video applications at scale can be complicated, time-consuming and expensive. In his session at @ThingsExpo, Zohar Babin, Vice President of Platform, Ecosystem and Community at Kaltura, will discuss how VPaaS enables you to move fast, creating scalable video experiences that reach your...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
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.
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
One of biggest questions about Big Data is “How do we harness all that information for business use quickly and effectively?” Geographic Information Systems (GIS) or spatial technology is about more than making maps, but adding critical context and meaning to data of all types, coming from all different channels – even sensors. In his session at @ThingsExpo, William (Bill) Meehan, director of utility solutions for Esri, will take a closer look at the current state of spatial technology and ar...
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
What are the new priorities for the connected business? First: businesses need to think differently about the types of connections they will need to make – these span well beyond the traditional app to app into more modern forms of integration including SaaS integrations, mobile integrations, APIs, device integration and Big Data integration. It’s important these are unified together vs. doing them all piecemeal. Second, these types of connections need to be simple to design, adapt and configure...
“We're a global managed hosting provider. Our core customer set is a U.S.-based customer that is looking to go global,” explained Adam Rogers, Managing Director at ANEXIA, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...