Firms go private in near-term cloud spend

IT organizations globally will spend more on private cloud services over next three years, while waiting for more mature public cloud services, according to Gartner.
Written by Liau Yun Qing, Journalist on

Despite the economies of scale public cloud providers can offer, IT organizations are spending more on private cloud services through to 2012 as they wait for public clouds to mature, reported Gartner.

In a statement Tuesday, the research firm noted private cloud services will be a "stepping stone" to future public cloud services and will over time span both private and public cloud resources in a hybrid fashion. It added that large enterprises will require private cloud services for "perhaps decades" as public cloud infrastructure matures.

"Many of the investments in private cloud computing will prepare the enterprise for public cloud computing in not just technology changes but also process, cultural and business interface changes," Tom Bittman, vice president and distinguished analyst at Gartner, said in the release. "Making these changes sooner rather than later will help enterprises take better cloud sourcing decisions and potentially make for an easier transition to public cloud computing."

Gartner defines cloud computing as a style of computing service that has "scalable and elastic IT-enabled capabilities" and is delivered as a service via Internet technologies. Public cloud computing is delivered to external customers while private clouds deliver services to enterprises within a firewall or private network.

According to Gartner, enterprises need to understand that some IT services are "destined" for cloud computing while others are meant for purposes such as "integration and intimacy with the business". Once an enterprise has decided that a particular service is appropriate for cloud computing, it should then choose whether to develop private cloud services or wait for a mature public cloud service to be made available.

"Each cloud service will have a different roadmap for the future--some should be focused on tighter integration, intimacy customization and differentiation for the business," Bittman explained. "Others should be focused on independence, easy interfaces, standardization and eliminated customization and are therefore potential cloud service candidates."

To better arrive at such choices, large organizations need to create dynamic sourcing teams that will make day-to-day decisions about how the provision of services, he added. Smaller businesses that are unlikely to have the skills to orchestrate cloud effectively would have to rely on "service brokers".

Bittman also highlighted a three-point action plan for enterprises contemplating the future of cloud in their organizations.

1. Present

  • Experiment with the cloud and discover where it is already taking place in the enterprise
  • Lead a cross-organization cloud initiative

2. Next 90 days

  • Use virtualization as a catalyst to drive IT modernization
  • Portfolio services
  • Develop strategies for services and private cloud
  • Identify new opportunities for the enterprise that are emerging due to cloud computing

3. Next 12 months

  • Develop an overall cloud computing strategy
  • Build a dynamic sourcing organization


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