15 Facts CIOs Should Know About the Cloud

Today, CIOs are among the most critical C-level executives in an organization’s hierarchy. If you are a CIO, you understand the importance of staying on top of one of the most difficult aspects of an organization’s operation: its data. With the rapid evolution of modern Internet technology, many CIOs find themselves tasked with the challenge of finding ways to store and use large amounts of data in a safe, simple, and cost-effective fashion. You may find that a cloud service provides the ultimate solution to your organization’s needs.

With modern cloud computing and storage systems, you can choose to purchase and deploy an on-premises system, store your data in a local cloud, or you can use the resources of a third-party cloud service provider. Alternatively, you can deploy a hybrid approach that combines aspects of all systems.

There is a lot to know about cloud computing, and it can be hard to digest it all. CIOs understand just how complex and powerful cloud solutions can be, but conveying the utility of these systems to others can be difficult. The first year that the majority of organizational workloads took place in the cloud was 2014, meaning that although its use is growing, the cloud is not yet ubiquitous in the workplace.

What Exactly Is a Cloud Solution?

Before we can discuss what you need to know to promote the use of cloud solutions in your business or other organization, it is important to make sure you know what cloud computing really is. "Cloud computing" refers to the delivery of hosted services over the Internet.

Cloud computing enables end users to store data and use computer resources on remote hardware. This can either be a public service or a private server. In the case of public services, people and organizations consume computer resources like a utility: water, gas, or electricity. They pay for the amount used and do not have to incur the expense of building or maintaining internal infrastructure.

In the case of private services, an organization builds its own private system of storage and computing that its members access either in-house or remotely. These systems are usually more insulated from outsiders, but require considerably more maintenance, investment, and oversight.

Public cloud computing promises several attractive benefits for businesses and end users, which is why it has become a popular choice. A few of the greatest benefits include:

• Self-service provisioning, which enables end users to bring up computing resources on demand

• Elasticity, which allows organizations to scale computing needs to meet demand and avoid unnecessary expense

• Pay per use, which keeps fees in line with actual use

Private cloud services, on the other hand, deliver services from an organization’s in-house data center to internal users. This allows for much of the same versatility and convenience of a public service, but offers greater regulation of cloud management, control, and security. They also require much greater investment and more significant oversight than public services.

A third option is the so-called "hybrid cloud." This is a combination of public cloud services and an on-premises private cloud. The two systems are structured to integrate with one another in order to automate tasks between the two. Companies can run mission-critical workloads or maintain sensitive information on the private cloud, while the public cloud can maintain heavy workloads, the bulk of storage, and scale on-demand to meet whatever needs the local cloud cannot support. Hybrid clouds attempt to take advantage of the benefits of both public and private clouds, while avoiding most of the limitations inherent in each.

Different Services

When discussing cloud computing, the acronyms IaaS, PaaS, and SaaS come up frequently. These acronyms refer to three broad service categories: infrastructure as a service (IaaS), platform as a service (PaaS), and software as service (SaaS).

IaaS supplies a virtual server instance and storage, as well as application program interfaces (APIs). These allow users to migrate their workloads to a virtual machine (VM). Amazon Web Services (AWS) is one of the most well-known examples of an IaaS.

PaaS provides host development tools on their infrastructures. PaaS is typically used for general software development. Common PaaS providers include Salesforce.com’s Force.com, Amazon Elastic Beanstalk, and Google App Engine.

SaaS delivers software applications over the Internet. Users are able to access these applications using a computer or mobile device with Internet access. One of the most popular SaaS solutions is Microsoft Office 365.

15 Facts Regarding Cloud Solutions for Organizations

Now that you know exactly what we are talking about when we refer to cloud solutions, you want to understand where these systems are going and why they are so vital to the future of businesses and other organizations. Thus, below are 15 facts and statistics that every CIO should learn and be able to reference when bringing a cloud proposal to the rest of your executive team.

  1. By the end of 2015, end-user spending on cloud services should top more than $180 billion worldwide. It was just $78.2 billion in 2011.
  2. By 2018, businesses will have spent $79.1 billion on hardware for cloud solutions. This includes both on-premises cloud solutions and tools for interfacing with public cloud solutions, such as high speed routers, cloud-connected printers, and hybrid cloud storage and backup solutions. Most companies spent zero on such hardware in 2011.
  3. By the end of 2015, businesses around the world will spend more than $30 billion on cloud computing and managed hosting services. Such spending was just $13 billion at the end of 2014.
  4. Public cloud solutions will vastly outpace so-called "private" or "on-premises" clouds over the next five years. Predictions estimate that public clouds will grow by 44 percent per year, while private clouds will only grow by 8.9 percent. However, hybrid approaches will likely remain quite prevalent, with storage handled in public services and computing handled locally.
  5. Eighty two percent of companies that switched to a cloud solution reported saving money by making the move. Fourteen percent of companies that made the switch were also able to downsize their IT departments after the transition. However, reports indicate that shifting to the cloud does not eliminate jobs or IT departments; instead, it simply reshuffles them.
  6. Eighty percent of companies that transitioned to cloud systems experienced improvements to their operations within six months. These included heightened security, enhanced uptimes, added functionality, and other benefits.
  7. Cloud storage will reach eight zetabytes of data stored globally in 2015. A zetabyte equals one billion terrabytes or one trillion gigabytes, so eight zetabytes of data is the equivalent of eight billion terrabytes.
  8. According to Cisco, maker of much of the hardware used in cloud storage infrastructure, global data center traffic will triple from 2012 to 2017. That represents a 25 percent compound annual growth rate (CAGR). Meanwhile, global cloud traffic will grow 4.5 times (a 35 percent CAGR), data center workloads will grow 2.3 times, and cloud workloads will grow 3.7 times over the same period.
  9. The first year in which the majority of workloads shifted to the cloud—2014—an estimated 51 percent of operations were processed in the cloud versus 49 percent in the traditional IT space.
  10. Also as of 2014, the average organization utilized 545 cloud services.
  11. Fifty nine percent of all new spending on cloud computing services comes from organizations in North America, and this trend is expected to accelerate in the coming years.
  12. Eighty three percent of organizations attempting to deploy to the cloud experience internal roadblocks, with 68 percent of those roadblocks created by people, processes, politics, and other non-IT related factors. While technical hurdles made up a portion of the resistance to cloud transitions, lack of understanding, distrust of working in the cloud, and fears over budgetary concerns made up the majority of the issues facing IT professionals.
  13. Moving to the cloud generally improves an organization’s uptime by 35 percent. A wise CIO may consider going through critical systems and developing a plan to move them to the cloud to improve continuity, prioritizing systems by their need for high-availability.
  14. Ninety four percent of IT managers report that their business security improved after adopting cloud applications. Of course, cloud solutions simply create a new type of security concern, so CIOs must employ ongoing vigilance and new security protocols to maintain these gains in security.
  15. Microsoft allocated 90 percent of its research and development budget for 2015 to projects used to improve cloud technology and security services.

These Facts Represent the Tip of the Cloud Computing Iceberg

Clearly, these statistics are not exhaustive, and can only illustrate a small portion of the change the cloud has made on enterprise computing and data-sharing. Cloud solutions clearly represent the trend for future business computing and data storage. Cloud computing offers solutions that most companies benefit from almost immediately, including scalability, infrastructure savings, and enhanced security and accessibility. As a CIO, the next time you approach the issue of cloud computing with your executive team, take these facts and figures with you to support your proposition, and your organization can step into the future well-informed and ready to make the right decision.

Works Referenced

"20 Cloud Computing Facts for 2015," iCorps.com, January 28, 2015.

Columbus, Louis, "Gartner Predicts Infrastructure Services Will Accelerate Cloud Computing Growth," Forbes, February 19, 2013.

Cox, Ryan, "Infographic : Cloud’s Growing Footprint in Storage," SiliconAngle, June 27, 2013.

Deutscher, Maria, "When Will the World Reach 8 Zetabytes of Stored Data?" SiliconAngle, May 21, 2012.

Flood, Gary, "Gartner Tells Outsourcers: Embrace Cloud or Die," InformationWeek, July 31, 2013.

Garlinghouse, Katy, "Industry’s First Cloud Adoption and Risk Report Reveals Organizations Are Flying Blind as They Embrace Cloud Services," Yahoo! Finance, September 25, 2013.

Kelly, Sue, "IBM: Cloud Computing to Contribute $7 Billion in Revenue By 2015," MyITView, March 10, 2011.

McCafferty, Dennis, "11 Facts You Need to Know About the Cloud," CIO Insight, November 13, 2014.

Ray, Tiernan, "Salesforce, Google, Amazon Cloud Winners, Says Piper; Microsoft Straddles the Line," Barron’s, October 17, 2013.

Santacaterina, Maria, "7 Statistics You Didn’t Know About Cloud Computing," NSK Inc., August 27, 2013.

Vaughn-Nichols, Steven J., "Cisco projects data center-cloud traffic to triple by 2017," ZDNet, October 15, 2013.