Despite concerns about data security and loss of control, cloud-based service providers are highly confident about the growth of the industry through to 2014.
The confidence stems from cost savings for customers; a KPMG International survey released today found that technology companies can expect the portion of revenue they generate from cloud services to double in the next two years.
The survey found demand for cloud services is “even stronger than we expected,” Tom Lamoureux, global leader for KPMG’s technology advisory team, told the Wall Street Journal.
Cloud providers revealed that revenue generated from the migration to cloud will be from data-intensive applications, such as business and data analytics, content management, customer care, and operations and manufacturing.
The survey’s participants expect the shift to occur despite ongoing concerns over loss of control of data and security as well as the challenge of providing consistent cost-savings.
“While providers are seeing the challenges of a maturing yet still relatively young market, we’re at a pivotal point in the evolution of the cloud ecosystem as users become more comfortable with a variety of cloud applications,” said Gary Matuszak, a partner, global chair, and U.S. leader for KPMG’s technology, media, and telecommunications practice in a release. “Leading cloud providers know they must evolve to provide a new level of scale, capacity and capability.”
The survey found evidence of a disconnect between real and expected cost-savings from cloud-based services. Four out of 10 survey participants said that proving cost savings was the biggest challenge in selling cloud services, and that most IT buyers are unrealistic about the amount they can save by switching to the cloud.
Indeed, cloud providers will need to work hard to continue winning over customers. Nearly half of providers say that loss of control is one of the biggest hurdles to deciding to purchase a cloud service to perform critical business functions, and 60 percent of service providers say they need to retrain their sales forces to effectively sell cloud services.
“The lines are blurring across the various types of cloud services; users need and want to understand cloud’s value and immense power much better than they do,” said Lamoureaux.
KPMG, the global provider of audit and advisory services, surveyed 179 cloud companies in North America, Asia Pacific, Europe, the Middle East and Africa.