The use of cloud-based storage has increased 90 percent from January 2012 to June of this year, according to “The 2013 State of the Enterprise Cloud Report” from Verizon, and the use of cloud-based memory has doubled, driven by the shift of business-critical applications to the cloud.

Nearly half of respondents to a survey by the Economist Intelligence Unit, which included insurers, said they evaluate cloud options before traditional models when considering new investments, Verizon said in the report. Drivers include the ease of managing expenses related to reserving and dedicating capacity; provisioning; regulatory compliance and industry standards with Payment Card Industry (PCI) and Good Anything Practice (GxP); reducing the time, cost and risks of managing inhouse IT; increased performance of web-based and other applications; and accessibility, as the users are able to work from most anywhere with most any device.

Highlights from the report:

  • The number of virtual machines (VMs) being deployed is slowing as a result and have increased by 35 percent over the same period
  • The growing number of VMs indicates enterprises are moving more workloads to the cloud
  • Companies are now using cloud to run external-facing and critical business applications, which account for 60 percent of cloud usage, rather than just testing
  • Spending on cloud has increased 45 percent
  • Enterprises that adopt cloud significantly increase their investments over time
  • The adoption of big data is driving demand for volumes associated with data management and analysis
  • Security and compliance requirements require increased focus on cloud providers’ data centers

As companies move more workload to cloud, they are getting better at optimizing cloud resources, Verizon says, and they can deploy the equivalent of three or four physical servers to one VM and increase performance by a factor of three. “This growing skill at managing cloud-based workloads makes it possible to deploy more applications, requiring more memory and storage requirements, without needing to deploy VMs in an equal ratio,” Verizon said.
Sixty percent of cloud applications are web-based and Internet-facing, Verizon said, but cloud security and reliability has improved and companies now are deploying back-office applications, such as manufacturing and resource planning, which now account for 23 percent of cloud usage. Such applications have high storage requirements and fluctuating usage patterns. Back-office applications also need enterprise-grade cloud services with high levels of availability, security, and industry specific requirements, Verizon said, which makes them ideal for cloud.

The availability of cloud is changing who purchases IT services, Verizon said, with a shift toward line-of-business managers and heads of enterprise business units now purchasing cloud, driven by the desire to increase innovation and speed to market and the perception that IT is failing to support them.

This story was originally published by Insurance Networking News. Published with permission.

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