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December 3, 2012

Cloud services to be regular sourcing option for CIOs and LOB managers: report

Cloud Service Providers to control the rising share of IT infrastructure spending by 2016

By CBR Staff Writer

The rapid evolution of cloud services along with growing awareness about their benefits has led to deployments by business managers as well as IT managers during 2012, according to a new report from IDC.

The evolution is further anticipated to accelerate and business buyers to test the potentials of the existing services and their CIOs to distribute them, the report reveals.

According to IDC’s projections, by 2016, cloud services will turn out to be a regular sourcing option for the CIO and LOB manager, strengthening transformations on the infrastructure vendors, business IP owners and the users of cloud services and technologies.

IDC APeJ cloud services lead analyst Chris Morris said that the CIOs’ choices for cloud deployment will change over the next 24 months.

"Hosted private cloud will become the enterprise preference for cloud deployments by 2015," Morris said.

The report said that a blend of market trends has been pushing medium and large enterprise to the latest preference as a source to deliver flexible business services in a cost efficient manner.

Further, the firm forecasts that by 2016, Cloud Service Providers will be controlling the rising share of IT infrastructure spending.

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"Economies of scale are a hallmark of the cloud marketplace, demonstrated by the growing concentration of physical IT infrastructure spending into a narrower group of service providers," Morris said.

"IDC predicts that by 2016, in the mature markets of APeJ, over 50% of enterprises will have more than half of all their IT assets located in third-party datacenters.

"And by 2016, over 60% of enterprise-class storage will ship to cloud service providers. By 2017, almost 30% of all high end datacenter space (tier 3 and 4) will be in service providers’ datacenters."

By 2015, cloud is anticipated to be a regular delivery model within new commercial terms for delivery of business and IT services, which could make the Cloud marketing label only as a descriptor for as-a-service delivery models with partial value as a differentiatorfor products and services by 2016.

"To retain relevance in the market as LOB spending on as-a-service offerings exceeds that of the IT department, both technology and as-a-service providers must rapidly adapt their ecosystems to include more value-add partners which have expertise in relevant business verticals and processes," Morris said.

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