Cloud computing technology becomes the norm in UK business

Cloud SaaS

by Duncan MacRae| 04 July 2014

Hybrid IT is fast becoming the principal technology within business, according to Microsoft.

Cloud computing has achieved mainstream deployment in the UK, with 78% of organisations formally adopting at least one cloud-based service.

Research from the Cloud Industry Forum (CIF), conducted in June 2014, polling 250 senior IT and business decision-makers, indicated a nine-point increase or 15% growth over the last research project conducted in September 2013.

This suggests an annualised growth rate of nearer 20% by the end of September 2014. Since the first research was conducted in 2010, UK Cloud adoption has grown by 61.5%.

Large private enterprises show the highest rates of adoption at just over 80%, while the sub 200 employee organisations are standing at around 75% and the public sector is still lagging at around 68%.

The research also recognises that the majority of organisations (85%) operate on-premise servers or data centres. The existence of on-site technology is also a direct influence on the evolution of IT strategy based on historical investment. The co-existence of on-premise and Cloud services by nature leads to a Hybrid IT environment for the majority of organisations.

Alex Hilton, CEO of CIF, stated: "We have now conducted five research projects over 48 months looking at Cloud adoption in the UK and, as such, have a sound basis for assessment and evaluation of trends.

"Over the next year we can say with some confidence that first time Cloud adoption will increase by 12 points - or 15% in real terms. This means that 90% of all businesses in the UK will be formally using at least one Cloud service by the end of 2015. In the near term adopting will be driven in part by the end of support for Windows Server 2003 that concludes in July 2015.

"We can also predict that 10% of businesses will likely report a primary Cloud-based IT strategy, 10% will remain entirely on-premise and 80% will have a Hybrid IT environment. This means that nine out of ten companies will continue to invest in on-premise IT alongside and integrated with Cloud solutions. In other words we are in fact seeing the normalisation of Cloud in the Hybrid IT market."

Clare Barclay, GM, Microsoft UK, Small, Mid-Market Solutions & Partner Group and a CIF Member, said: "What is clear is that Hybrid IT is fast becoming the principal technology within business. The research has confirmed that the role of IT is now firmly established as an enabler of services, business agility and transformation rather than just a cost centre to deliver services and devices."

Nick East, CEO of Bath-based Zynstra, a pioneer in cloud-managed server appliances for SMBs, said: "SMBs are vital to the wellbeing of the economy and make up the majority of businesses in the UK. This research showed that over half of SMBs are running IT systems that are close to the end of their supported life. SMBs are turning to Cloud, with 69% stating they consider an infrastructure refresh to be an opportunity to adopt a managed Cloud solution.

"With this in mind SMBs need to consider which Cloud solutions are going to be the best fit for them in the future. Leaving it until the end-of-support date has passed is going to cause a major IT headache."

Key findings of the report include:

- Of those using Cloud services, 45% use only one Cloud service formally, 28% use two Cloud services, 13% use three and the remaining 14% use four or more.

- 79% of organisations now formally consider Cloud as a part of their IT strategy.

- 72% of organisations make new IT deployment model decisions based around infrastructure refresh.

- 61% of organisations reported running Windows Server 2003, which formally goes end of support in July 2015 and will drive a new wave of opportunity for Cloud services adoption over the next year.

- 78% of organisations run IT predominantly with in-house personnel and 22% use a managed service provider. MSPs have greatest penetration in the sub 20 employee organisation, where 38% claim to rely on an MSP.

- Web hosting, email, CRM, data back-up and disaster recovery continue to be the most pervasive Cloud services used. This is followed close behind by video conferencing, collaboration solutions, HR apps and data storage.

- Looking into the drivers for first time Cloud adoption, flexibility of Cloud as a delivery model continues to be cited as the primary reason for adoption among private sector companies (17%), while operational cost savings dominates the public sector (21%).

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