Cloud Computing: Big Companies To Step Up Migration To The Cloud

Though security remains a concern, a silicon valley analyst group predicts a major shift to cloud computing among major enterprises in the next three years.

McKinsey & Co.’s IT-as-a-Service Cloud and Enterprise Cloud Infrastructure survey indicates the transition to a hybrid cloud infrastructure is being prompted by cost concerns.

Cloud computing involves a network of remote servers hosted on the internet to store, manage and process data rather than working locally off a computer’s hard drive — in some respects a throwback to the old days of dumb terminals that lacked local storage and connected to a mainframe.

Cloud computing generated $100 billion in 2012. That is expected to grow to $127 billion next year and to $500 billion by 2020.

The McKinsey survey queried 800 chief information officers and information technology executives in a variety of industries around the world. The companies ranged in size from small to Fortune 100.

“Enterprises plan to reduce the number of workloads housed in on-premise traditional and virtualized environments, while dedicated private cloud, virtual private cloud, and public infrastructure as a service are expected to see substantially higher rates of adoption. Interestingly, on-premise private cloud environments, which have been adopted by nearly half of enterprises, are likely to stay nearly flat,” the survey found.

The survey said the greatest shift was expected among large companies and it is expected to happen more quickly than in the past.

Since medium-size enterprises already have been making the shift, the addition of large companies is going to have a severe impact on companies that provide on-premises IT services. Currently, less than 20 percent of work has migrated to the cloud. The survey found large enterprises plan to double their adoption of private cloud services by 2018, reducing shipments of on-site servers by as much as 5 percent.

The survey found the most likely beneficiaries of this cloud migration are Amazon, Google and Microsoft, which have the largest capacity. Nearly half of those surveyed said they already have handed off some work to such “hyperscale” providers. A like percentage said they plan to use smaller providers like Rackspace as well.

IBM was once the biggest name in computer hardware. Big Blue cloud chief Robert LeBlanc said IBM’s approach now involves focus on higher-value cloud capabilities like Watson’s cognitive computing and the internet of things, tailoring its approach to specific vertical industries, Neworkworld reported.