The march to the cloud gained considerable steam in the last two weeks with major announcements from leading software and communications providers. First off, we had Oracle at this year's OpenWorld introduce its cloud Infrastructure-as-a-Service platform (IaaS) to compete directly with the likes of Amazon, Google, IBM, and Microsoft. Oracle CTO Larry Ellison and CEO Mark Hurd laid out a vision of seamlessly integrated services offering application, platform, and infrastructure in the cloud -- secure, highly available, and with distributed global data centers that allow customers to support requirements for in-country data storage and retention. Hurd predicted that by 2025, 80% of IT budgets would be spent on cloud-based services.
Microsoft echoed Oracle's cloud push at its annual Ignite conference for enterprise IT. Microsoft, too, delivered a slew of announcements to enable its customers to move to pure or hybrid cloud environments, integrating on-premises and cloud security and management. The company stressed the geographic breadth and processing power of Azure, its IaaS offering, even positioning it as a global supercomputer capable of supporting emerging artificial intelligence and machine learning applications. Microsoft also announced a strategic partnership with Adobe, integrating Azure and Microsoft Dynamics CRM with Adobe's Marketing, Creative, and Document clouds.
Oracle and Microsoft were not alone. Last week, Cisco and Salesforce announced a partnership to integrate Salesforce's cloud platform with Cisco Spark, its cloud-based team collaboration service (see "Cisco, Salesforce Form Strategic Alliance"). The partnership enables customer communication directly through Salesforce and includes the integration of Cisco's IoT technologies into Salesforce.
Taken all together, these announcements underscore the rapid shift to cloud. According to Nemertes' latest research, more than 40% of organizations are now using or planning to use UCaaS. Fully 94% of companies are increasing spend on PaaS and IaaS. A key trend driving the move to cloud is a change in the way enterprise IT leaders view cloud security; 44% say that cloud services are "more secure" than on-premises, while just 19% say they are less secure. With an ever increasing percentage of IT budgets being eaten up by security-related spending, IT shops increasingly see cloud services as a cost-effective means to meet rising security challenges.
The road to cloud is not without speed bumps. Nemertes finds that just 35% of businesses have a centralized structure in place to manage their cloud service providers. Only 41% have a cloud roadmap and strategy. IT leaders are struggling to find the right mix of cloud, including determining how to support hybrid models that integrate cloud and on-premises services, how to manage application performance, and how to evolve wide area networks to support traffic flows that are changing from data center to end-user, to user-to-cloud -- from desktop and mobile devices.
Nemertes is seeing widespread adoption of WAN services that optimize connectivity to cloud services: 27% are currently using SD-WAN, while another 36% are evaluating it for future deployment. Twenty percent of those using/planning to use SD-WAN will drop MPLS in favor of SD-WAN optimized public Internet services in order to better align with their adoption of cloud-based applications and platforms. Similar numbers are investing in cloud exchange services from carriers like AT&T, Level 3, and Verizon, or direct cloud connectivity services from SaaS providers like RingCentral's recently announced CloudConnect (see "RingCentral Adds Direct-to-Cloud Access Ramp").
Cloud exchanges enable organizations to federate their wide area networks with cloud services through either their WAN service provider or via connectivity through a carrier hotel or shared data center. Cloud exchange services eliminate the variability of Internet as a WAN and are typically offered as a managed service that provides application performance management, resiliency, and security guarantees. Nemertes notes a strong correlation between direct cloud connectivity and cloud success, with 75% of organizations that rate their cloud strategies as "highly successful" using such services.
As IT rises into the cloud, significant challenges remain. IT organizations must create a coherent strategy for success, aligning network, security, and application plans with the shift to cloud. Success comes from shifting the entire IT operational viewpoint to a cloud-centric paradigm, not just simply shifting individual applications in an inconsistent manner to a variety of cloud services with little attention paid to cloud network connectivity, management, and security.
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