Saugatuck’s latest global survey on Cloud adoption and use projects a significant increase in the use of Cloud-based applications and workloads over the next two years. Follow-up interviews with senior business and IT leaders reveals a rapidly-increasing pervasiveness of Cloud usage that Saugatuck sees as stemming from broader, more impactful reasons than simply more customers acquiring Cloud-based solutions. This includes an accelerating pace of traditional on premise workload migrations. This Research Alert offers Saugatuck’s insights into this more pervasive use of Cloud-based offerings and infrastructure, and identifies functional capabilities that are required to enable that use.

Why is it Happening?

Earlier this year, Saugatuck conducted a worldwide survey focused on the adoption and use of Cloud-based offerings, publishing the in-depth results in a variety of forums.  [Ongoing premium research subscribers can access Research Report 1258SSR, published 29Aug 2013, here: “Saugatuck’s 2013 Global Cloud IT Adoption, Use, and Benefits Survey: Summary Data & Analysis Report for Clients” – non-subscribers can access a summary blog post here].

Since then, we have provided additional analyses focused on key concerns related to the deployment of Cloud-based solutions (1244MKT, “Beneath the Surface of User Concerns”, 25July2013). In addition, we projected how user concerns will evolve (1255MKT, “A Strategy for Anticipating, and Managing, Cloud Concerns”, 23Aug2013). Out of eleven possible concerns identified in the research, the one ranked as seventh most important was “Dependable Delivery of High Availability / Performance.” We subsequently projected that the dependable delivery of required service levels will rise significantly in importance – and could possibly become the most important concern by YE2015.

Our rationale for this projection is quite simple. Common wisdom has suggested that Cloud investments will continue to heavily focus around the deployment of new workload requirements – either in the form of SaaS solutions, or new Cloud-based custom development (as has been the case for the past five + years). This premise is based on the widely held belief that most existing workloads have attributes suggesting that they should hosted right where they currently are, as the financial benefit / payback related to migrating them just wouldn’t warrant the time, effort and expense related to the migration. Common wisdom suggests that there wouldn’t be sufficient cost saving by moving beyond infrastructure virtualization to the dynamic resource allocation delivered by a Cloud infrastructure.

However, recent discussions with business software providers, system integrators, platform providers and business / IT users suggest that this perspective might be outdated. Saugatuck now projects that over the next 12 to 18 months there will be a significant acceleration in the movement of traditional on-premises workloads to Cloud-based infrastructure, predominantly in the following two forms. A recent buyer demand study by Virtustream supports these conclusions.

Vendor Provided Cloud Infrastructures: Some workloads will be re-platformed so that they can run on Cloud infrastructures provided by vendors for various reasons such as: infrastructure cost reductions, service level improvements, or data transmission costs/latency (i.e., attain proximity for inter-dependent workloads).

In-house Cloud Infrastructures: By YE2016, Saugatuck anticipates that 20 percent more of existing on-premise workloads will be moved to private Cloud infrastructures (established within in-house facilities), or to public Clouds. The objectives for such workload movements will be similar to those in the first form, above. In this case, the underlying influence will be the ongoing effort to continually seek efficiencies and minimize infrastructure costs.

Saugatuck views one key factor behind both forms of workload migration is the need to integrate new technologies (e.g., mobile, social, analytics) with traditional workloads and workflow – a key for any organization transforming to become a Boundary-free Enterprise™. With an expanding set of inputs / outputs, and a shift toward a more unpredictable set of transactions, many traditional workloads are no longer consistent in their resource requirements. For example, consider how an inventory system can transition from a simple batch workload to support a “real time” and “always on” business process, such as when a world-wide sales staff is given the competitive advantage of being able to commit delivery dates during sales calls.

Similar to the application modernization example noted above, many traditional workloads will need to be re-architected to work within a services framework, so as to enable them to be successful candidates for migration.

This morphing of traditional “well defined” workloads into supporting “unpredictable” business processes will have a major impact on those workloads, making them candidates for migration from conventional dedicated or virtualized infrastructures to Cloud infrastructures.

But the migration of workloads to Cloud infrastructures will not be universal. For candidate workloads that may get migrated, new and critically important challenges remain. Specifically, both new workloads and migrations of existing workloads to Cloud infrastructures will soon spotlight four key requirements to manage Cloud-based workloads.

  1. Performance Monitoring – Tools for tracking workload performance in both IT metrics (e.g., average data base access time) and in business user metrics (e.g., average transaction response time).
  2. Resource Utilization Measurements – Tools for tracking utilization of infrastructure resources including servers, communication lines, etc.
  3. Resource Cost Monitoring – Tools for tracking costs incurred for resources consumed.
  4. Cost Modeling – Tools for projecting potential costs if different resources were allocated. Example: potential savings from utilizing a different server configuration.

Note that items 1 through 3, above, should include the capability of establishing user defined thresholds.
Click here to read the market impact.

This blog was originally published at Saugatuck's Lens360 blog on October 24, 2013. Published with permission.

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