Demand for Cloud Services Among Government Agencies

While much of the market attention on cloud services adoption tends to be focused on private enterprise applications, government agencies potentially have a lot to gain from its widespread use.

The cost-savings and scalability advantages of the cloud have been clear to those savvy IT leaders that are informed, but government adoption has been hampered by some unique challenges -- and the absence of a compelling mandate. That is, progress was slow until the "Cloud First" initiative was launched.

IDC has released a status update that details the growing demand for cloud services and enterprise architecture resources among U.S. government agencies. Their latest market study focuses on the results of an IDC Government Insights survey, which measured the progress of cloud solutions at government agencies -- while also examining the related architecture needs.

The results of the comprehensive survey revealed that despite the growing demand for cloud services, many IT managers are unsure of their organization's overall cloud strategy and the resources available to purchase and implement cloud services.

The Strategic Imperative for Cloud Services

The IDC report of the market study findings also highlighted that government employees now realize cloud solutions are becoming important for IT strategy. However, apparently many decision makers are still evaluating what cloud solutions will specifically mean to them and their organization.

In addition, in spite of the fact that managed cloud service offerings have been made available to government agencies for some time now, more than a third of the survey respondents lacked knowledge of cloud services budgeting.

IDC Government Insights finds that extensive government employee outreach is necessary to boost the comprehension or understanding of cloud migration strategies and related budgetary requirements.

Other findings from the latest IDC report include:

• Across all levels of government 90 percent anticipate cloud services will have impact on computing infrastructure.
• Local government participants were the least optimistic about cloud, with 14.7 percent saying cloud wasn't at all important.
• Despite the fact that CFOs are often the people who drive their group's transition to cloud (due to potential cost savings) 60 percent of chief financial officers are only somewhat familiar with their organization's cloud strategy.
• Indicating the presence of some progressive thinking, 15.2 percent of respondents said they would dedicate between 1 and 10 percent of their agency's IT budget to cloud services.
• When it comes to cloud providers, there is a clear preference across all levels of government for large IT vendors versus smaller, specialty providers.

"Survey data indicates that significant progress already has been made for cloud services, but overall progress will only accelerate once several important issues have been addressed," said Shawn McCarthy, research director at IDC Government Insights.

IDC believes that these outstanding issues include lack of knowledge by some participants on the level of funding available to spend on cloud solutions -- as well as the needed IT architecture changes that can help agencies move more aggressively into cloud.

Furthermore, by focusing on greater outreach efforts to bring all IT employees in line with enterprise cloud plans, government agencies can begin to benefit from the readily available cloud computing services.

The IDC survey was conducted in the late spring of 2012 and measured the responses of more than 400 government information technology employees at various levels of the U.S. government. About half of the participants work for the federal government, with the remainder working in either state or local government.

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Western European Private Cloud Infrastructure Growth

The detractors of cloud computing benefits will state that the typical adoption is still limited at most enterprises -- they're deploying cloud services to a few early-adopters. That being said, some leading markets are confidently moving ahead with mainstream deployments, regardless of the caution. While others, such as western Europe, are apparently in transition.

The western European private cloud market will grow at a CAGR of 23.2 percent for the next five years to reach $7.9 billion in 2016, according to the latest market study by International Data Corporation (IDC).

IDC has been looking in-depth at the private cloud marketplace -- from a hardware, software, services and networking points of view.

"The growth of private cloud is even more impressive in the context of the current economic situation," said Mette Ahorlu, research director, IDC European Services.

According to IDC's assessment, demand in the region is being driven by the need for cost savings and efficiency and with a longer perspective of creating increased flexibility, and is across the board -- from hardware, to software, to management, networking and services.

Creating a private cloud has an impact on all aspects of IT infrastructure.

Key findings from the market study include:

• Most enterprises are still in early phases of cloud adoption, typically testing out cloud and perhaps rolling out one or a few cloud services to the full range of relevant users, but not deploying cloud on a really large scale.
• There is growing interest in pre-packaged private clouds, pre-configured with servers, storage, network and management that speed up implementation and reduce need for services.
• The cloud computing approach is to become a critical part of the IT strategy for the majority of EMEA organizations in the next two to three years.
• While security, compliance and data location are barriers to public cloud they become drivers for the adoption of the private cloud.
• Partnering between technology companies and service companies is important to help create transparency in a complex market where clients think there are too many moving parts.
• Hosted private cloud is not nearly as popular as clouds on customers' premises, but hosted private cloud will grow even faster and revenue will exceed on-premises clouds by 2016.
• While the market is serviced by traditional IT providers and outsourcing companies, telecom service providers have also seen it as a great opportunity to expand their businesses.

IDC believes that managed cloud services is fundamentally a network-based offering. It's becoming an established commodity, scales to a mass market customer base, and builds on the kind of support or billing relationships that telecom service providers are capable of offering.

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Enterprise Mobile Benchmark Study Offers Guidance

A comprehensive enterprise mobile device and application strategy, if executed correctly, can become a significant competitive advantage. But, there's a growing need for answers to the questions troubling many IT executives -- with regard to their mobile device policies, the adoption of media tablets, and mobile application development costs and practices.

According to the latest market study by International Data Corporation (IDC), corporate-liable devices still prevail with 77 percent of survey respondent organizations providing smartphones to their employees and 49 percent providing media tablets in 2011.

Of these corporate-liable devices, 70 percent were purchased by the organization and issued to the employees while only 7 percent were purchased by the employee with full or partial reimbursement.

The goal of the study, based on responses from CIOs and IT professionals in the U.S. and Europe, is to provide IT organizations with insight into how their peers have addressed similar mobility issues.

Highlights from the IDC Mobile Benchmark Study include:

• Employees in executive, sales, IT, and marketing job functions are more often issued a smartphone over other functions within an organization.
• For corporate-liable smartphones, most organizations (73 percent) pay the entire mobile service bill (voice and data) directly to the mobile service provider. Similarly, 71 percent of organizations pay the entire mobile service plan for corporate-liable tablets.
• To mitigate risk and support costs of letting employees bring their own devices, 45 percent of the respondents provide limited IT help desk support for business applications on individual-liable smartphones, while 42 percent report they provide limited IT help desk support for business applications on individual-liable tablets.
• In both cases, hardware issues are relayed back to the mobile service provider. In 33 percent of the organizations surveyed, no support is provided for individual-liable smartphones and 44 percent of respondents reported no support for individual-liable tablets.
• Surprisingly, a high percent of respondents reported they expect tablets will be a second device to the traditional laptop/desktop PC.
• The notion that tablets would be treated as second devices to laptops -- and refreshed every 2.5 years -- will be costly for IT organizations in the long run. IDC estimates it will cost the average large organization an additional 1 percent of their IT budget every year just to refresh these media tablets.

"Many IT organizations are currently working through their mobile device strategy and policy issues. To be successful, IDC recommends that IT executives establish a governance committee including finance, HR, and Legal to outline a comprehensive Bring Your Own Device (BYOD) strategy, including use policies and cost allocation methods," said Meredith Whalen, senior vice president, IT Executive & Industry Research, IDC.

Most importantly, IDC recommends that IT executives identify the costs associated with developing and supporting multiple mobile platforms, and apply a governance strategy to mobile application development efforts to ensure projects are prioritized based on the highest value add to the enterprise.

IDC's Mobile Benchmark Study was designed to address the biggest questions IT executives are facing around their mobile device policies, including tablet adoption and mobile application development costs and practices.

The study surveyed 52 CIOs and senior IT professionals in the U.S. and Europe during the months of September 2011 and November 2011. Ms. Whalen provides a summary the study findings in the following brief video presentation.

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