Third-party management of private cloud systems, which accounts for 70 percent of the current market, is expected to increase over the next two years, according to “Private Cloud Customer Research,” a report from Technology Business Research. And, according to the report, managed private cloud will dominate as concerns about hybrid integration, complexity and security induce companies to use a systems integrator or private cloud vendor to save time and reduce costs.

“As private cloud matures, growth is entering a different phase that is driven more by the flexibility and ease of management than by just security or cost savings,” said Allan Krans, TBR cloud practice manager and principal analyst. “The skills gap in implementing, migrating and managing private cloud is driving customers to seek vendors that deliver clear end-to-end migration road maps.”

Security, however, remains top of mind for private cloud adopters, according to the report; 59 percent of respondents pegged security as a top concern and/or pain point around adopting cloud, and 19 percent indicated they will hire a third party to help mitigate their security concerns.

The report estimates that the overall $41 billion private cloud market will grow at a 14 percent compound annual growth rate to $69 billion by 2018. TBR surveyed 331 private cloud end-users in the United States, the United Kingdom, Germany, France, India and China.

Vendors also are struggling to adapt to the new cloud paradigm, according to Cassandra Mooshian, a Technology Business Research (TBR) cloud analyst. “Though they top the leaderboards, IBM, Microsoft and HP — vendors with broad cloud portfolios — have lower satisfaction scores than those with more focused portfolios like Cisco,” Mooshian said. “Trying to be all things to all people deters customers that want tailored and specialized solutions; think of Walmart vs. a grocery store.” Mooshian also said vendors with continually advancing security offerings and expertise will find ongoing success in the private cloud space.

Another factor in the push toward the cloud is that companies find it difficult, if not impossible, to keep up with the competition without cloud technology. But pain points are frustrating many adopters. According to a study by Enterprise Management Associates, “Casualties of Cloud Wars: Customers Are Paying the Price,” 88 percent of the 400 global organizations surveyed report at least one challenge with their move to cloud services. These challenges included pricing concerns, hidden fees and problems with performance.

“Stories about successful cloud implementations are captivating, but the reality is that cloud is more complex than many news headlines make it out to be,” Dennis Drogseth, VP of EMA, said. “Unless [companies] have an experienced staff that can manipulate the mass-market systems of the big providers, they should seek cloud vendors that take a different, personalized approach.”

Originally published by Insurance Networking News. Published with permission.

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