As we continue our blog series on the Global Hybrid Cloud Market in preparation for the IEEE Cloud 2014 event, we turn our focus to IT professionals and cloud service providers.
With the Hybrid Cloud Market experiencing tremendous growth, you would think that all IT professionals and cloud service providers would be jumping on the hybrid band wagon, considering the many benefits that adopting hybrid cloud solutions brings to the IT table.
However, when TechNavio analysts surveyed 100 IT professionals and cloud service providers, they found that not everyone was sure that hybrid cloud solutions are the way to go.
Why would an IT department pass on hybrid cloud solutions?
When we asked survey respondents what some of the reasons their IT department would be for not using hybrid cloud solutions, the most common answers were:
- Lack of talented employees.
- Benefits from Cloud are not recognized due to regulations preventing total cloud adoption.
- Lack of knowledge and capability to deploy cloud.
One respondent believes that:
“IT professionals will have to take up additional training on cloud and hybrid cloud, and IT providers need to undergo huge changes in their IT infrastructure to provide and support their customers that are interested in cloud services.”
Another big reason is security concerns. 62 percent of survey respondents believe that hybrid cloud is not as secure as traditional cloud solutions, which could lead to vulnerability of information, especially if the information is stored on the public side of hybid cloud.
In addition, 26 percent of respondents felt that hybrid cloud solutions wouldn’t meet the requirements needed by their company. This most likely goes for industries that store mostly confidential information, like companies in BFSI or Healthcare sectors. This also brings into question how data allocation on a hybrid cloud platform would be subjected to government regulations.
Why would cloud service providers not offer hybrid cloud solutions?
One word: Cost.
The initial cost to design a hybrid cloud platform, market it to end-users and hire the IT professionals to manage the software is considerably high.
When we asked respondents if service providers will require more trained professionals in order to provide a hybrid cloud, 44 percent said that they would, meaning allocating time and money into developing a team capable of managing their hybrid solutions. 30 percent also believed that providers would need to provide their current team with specialized training on hybrid cloud technology.
One survey respondent believes that:
“Many IT service providers will need to hire cloud specialists and may have to lay off their existing infrastructure guys or invest money in training existing infrastructure guys.”
Another factor leading service providers away from adopting hybrid cloud is the potential loss in profit margins, especially in offering hybrid cloud SaaS. When we asked survey respondents what they thought of the potential profit decline, 20 percent believed that service providers would experience a loss and 18 percent that the loss would only be an initial one. However, 41 percent of respondents felt that it was too early to judge, as the hybrid cloud market is still in its nascent stage.
What are some of the potential implications for a cloud service provider not offering hybrid cloud?
Since 38 percent cloud professionals surveyed believe that service providers will suffer a profit drop, at least initially, we wondered what some of the consequences were in not offering hybrid cloud solutions.
By not offering a service that the competition does, 42 percent of respondents felt that this would lead to the loss of potential and existing customers, and with it a large portion of the would-be revenue, had the company offered the service.
In addition, as the Hybrid Cloud Market is still in its infancy stage, there is a lot of room for service providers to capitalize on market shares and gain an edge over the competitions. Not offering hybrid solutions would mean missing out on this potentially huge money-maker.
